Updated US NAFTA Objectives Include Measures for Administrative Review, Import/Export License Transparency
The Office of the U.S. Trade Representative late on the afternoon of Nov. 17 released an updated list of NAFTA negotiating objectives, including new language on objectives to “increase transparency” in import and export licensing processes among the parties and to reinforce commitments to continue practices to review and correct countries’ final administrative actions, “if warranted.” The updated list continues most of the language of the original negotiating objectives released in July (see 1707180022), including all of the same customs proposals, consisting of positions to raise Canada’s and Mexico’s de minimis thresholds to $800, reduce customs documents and procedural formalities, and provisions to provide for automation for import, export and transit processes.
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In written testimony submitted for a Nov. 20 Senate Finance International Trade Subcommittee hearing in San Antonio, Border Trade Alliance (BTA) Chairwoman Paola Avila called for the raising of Canadian and Mexican de minimis levels to the U.S.’s level, and for implementation of a North American single-window system for all import and export transactions between the countries, in an updated NAFTA. Avila also pressed for a three-nation Commercial Customs Operations Advisory Committee, to provide the private sector a “central forum” for discussing emergent NAFTA challenges and to present recommendations to all three member governments. “A three-nation COAC could provide a forum for identifying industries that have left North America, industries whose businesses models are radically changing, and emerging industries that North American leaders should work together to attract and retain through regulatory reforms,” she wrote. During the hearing, Avila added that BTA believes NAFTA provides an opportunity to provide for more secure border inspections than are conducted currently.
Amid outcry from the business community about a reported USTR proposal to make the pact’s investor-state dispute settlement system voluntary (see 1710100025) and U.S. Trade Representative Robert Lighthizer’s hard-line language on free trade agreement ISDS provisions (see 1710260026), the updated negotiating objectives include several more details on an envisioned future mechanism. That includes ensuring that arbitrators act “impartially and independently,” allowing them to expeditiously “review and dismiss frivolous claims,” and providing countries with more tools to ensure “coherence and correctness” of investment rule interpretations.
The updated language also calls for an updated agreement to provide “a mechanism for ensuring that the Parties assess the benefits of the Agreement on a periodic basis.” Reuters reported Nov. 19 that this language could indicate a loosening of previous U.S. demands for a provision to automatically “sunset” the agreement after five years unless all three countries affirmatively agree to renew it (see 1710170056), as Mexico is expected to propose a counter offer that would provide for periodic reviews of the pact’s effectiveness without an automatic expiration.
“I’m not sure exactly what proposals we might see from the other side,” USTR General Counsel Stephen Vaughn said during the hearing in response to a question from subcommittee Chairman John Cornyn, R-Texas, about whether there may be ways outside of a sunset provision to assess the effectiveness of the pact. “But I would say that from our perspective, we are hopeful that the new agreement will be successful, and that it will be popular, and that it will be approved, and then hopefully when we come to the time to review the agreement and see how it’s performed, there will be a widespread understanding that the agreement is working, and maybe we need to update this thing or that thing. That would be the hope, and that would be the goal.”
The release of the updated objectives also will open the door for USTR nominees to be cleared by the Finance Committee, after ranking member Ron Wyden, D-Ore., recently said he wouldn’t support advancing any additional trade nominees from the committee due to NAFTA transparency concerns (see 1710240033). “The American people should not have to rely on anonymous leaks to the media in order to know what their government is purportedly seeking on its behalf, so I am glad the U.S. Trade Representative’s office has finally updated its public summary of its objectives for the NAFTA renegotiation,” Wyden said in a statement. “These public summaries are critical to provide a window into the process so that the public -- and their representatives in Congress -- can provide relevant input into the talks.”