Canadian Foreign Affairs Minister Chrystia Freeland complained of U.S. negotiating positions during the ongoing NAFTA renegotiation, some of which she said violate World Trade Organization rules, during an Oct. 17 press conference. U.S. Trade Representative Robert Lighthizer shot back later by saying he is “surprised and disappointed” that both U.S. partners are resisting a U.S. call to help reduce its trade deficit. During a closing trilateral ministerial press conference at the conclusion of the fourth round of the NAFTA renegotiation in Washington, Freeland said that a formal U.S. proposal during this round to create a 50 percent U.S. content requirement for automobiles would “severely disrupt” North American supply chains and make U.S. car producers less competitive, relative to imports from outside the region.
US Trade Representative (USTR)
A U.S. Cabinet level position which serves as the President's primary representative, negotiator, and spokesperson regarding U.S. trade policy. The USTR heads the Office of the United States Trade Representative which develops and coordinates U.S. policy for international trade, commodities, and direct investments, as well as overseeing trade negotiations with other countries.
Despite some progress on customs, small business and competition policy within NAFTA renegotiations, the U.S. has put forth “several poison pill proposals still on the table that could doom the entire deal,” U.S. Chamber of Commerce CEO Tom Donohue said in remarks set for an Oct. 10 speech at the U.S.-Mexico CEO Dialogue in Mexico City. Those pitches include five-year sunset provisions, tightened rules of origin, an optional investor-state dispute settlement (ISDS) mechanism, and a “dollar for dollar” opening of North American procurement markets, he said.
Former U.S. Trade Representative Robert Zoellick said Oct. 5 there’s a 50 percent or greater chance that President Donald Trump pulls out of NAFTA within a year or so. Congress should “assert its constitutional power” and delay “self-defeating actions” the U.S. could pursue to make the agreement more protectionist or to withdraw, said Zoellick, who is now non-executive chairman of AllianceBernstein and senior fellow at Harvard's Belfer Center for Science and International Affairs. “This is a message for the business community, the farm community, everybody that cares about this relationship,” Zoellick said during an event at the Atlantic Council. “You have to press” Congress.
The Office of the U.S. Trade Representative is accepting comments on the implementation of the environmental chapter of the U.S.-Singapore Free Trade Agreement through Oct. 2, USTR said. The U.S. and Singapore will hold a public session on implementation of the environmental chapter, Chapter 18, on Oct. 4 in Singapore, USTR said.
U.S. Trade Representative Robert Lighthizer and Malaysian Trade and Industry Minister Mustapa Mohamed met in Washington on Sept. 11, and directed their staffs to ramp up cooperation on intellectual property, agriculture, “goods,” labor and the environment under the countries’ Trade and Investment Framework Agreement, the Office of the U.S. Trade Representative said. Lighthizer and Mohamed will “stay in close touch” over the next months to evaluate progress in resolving “outstanding issues” and engage on ways to enhance economic ties and promote “more balanced trade” between the U.S. and Malaysia, USTR said. The agency also pointed to the $24.8 billion goods trade deficit the U.S. had with Malaysia in 2016, and to the fact that the Malaysia was the U.S.'s 18th largest goods trading partner last year, with $48.5 billion in bilateral goods trade.
Mexico and Canada are resisting a U.S. push to raise their de minimis levels to the U.S.’s $800 threshold, and the U.S. faces time pressures on other NAFTA issues, including dispute settlement and rules of origin, unofficial advisers involved in NAFTA negotiations said in recent interviews. The U.S. and Mexico, in particular, are hoping to conclude NAFTA renegotiations by the end of 2017, with three weeks between rounds, a comparatively short timeline for trade agreement talks that also demands negotiators act more quickly than in past U.S. negotiations, the advisers said. The three NAFTA parties are undertaking the second round of renegotiations in Mexico City Sept. 1-5.
The Office of the U.S. Trade Representative’s initiation of a Section 301 investigation into reportedly unfair Chinese forced technology transfers and intellectual property policies could “severely” undermine the U.S.-China bilateral relationship, Chinese government media reported on Aug. 28. “Until recently, it had been hard to see where the next financial crisis could come from,” says an article published by China’s Global Times. “But imposing trade sanctions could trigger the pricking of China's credit bubble, engendering social and political unrest, exacerbating China's economic woes and thwarting its economic advance.”
President Donald Trump thinks NAFTA can’t be renegotiated, and will eventually be terminated, he said Aug. 22 during a rally in Phoenix. “Personally, I don't think we can make a deal, because we have been so badly taken advantage of,” Trump said. “They have made such great deals, both of the countries, but in particular, Mexico, that I don't think we can make a deal. So I think we'll end up probably terminating NAFTA at some point, OK? Probably.” Trump reminded the audience of repeated pledges to either renegotiate NAFTA or terminate it if renegotiation fails. He said in April he was considering issuing an executive order to remove the U.S. from the deal (see 1704260049). “I personally don't think you can make a deal without a termination, but we're going to see what happens, OK? You're in good hands, I can tell you,” he said in Phoenix.
U.S. and South Korean officials failed to reach agreement on how to move forward with the countries’ free trade agreement during a meeting Aug. 22, Reuters reported, after U.S. Trade Representative Robert Lighthizer in July said the U.S. wants to resolve several market access issues facing U.S. exports (see 1708180017). Discussions during the meeting revealed “different views on the free trade agreement” and lack of concurrence on a path forward between the two countries, according to Reuters. South Korea also asserted the U.S. trade deficit with the country, which totaled $27.6 billion in goods in 2016, hasn’t been the result of the trade deal, and South Korean Trade Minister Kim Hyun-chong proposed a joint study on the “effects” of the Korea-U.S. Free Trade Agreement, according to the Reuters story.
U.S. Trade Representative Robert Lighthizer on Aug. 17 met with and expressed concerns to Japanese Foreign Minister Taro Kono regarding Japanese safeguard duties on U.S. beef exports assessed last month (see 1707280033), the Office of the U.S. Trade Representative announced. They also discussed combating unfair trade practices by third countries, a “priority work area” under the U.S.-Japan Economic Dialogue, as well as other “topics of common concern,” during their meeting in Washington, USTR said. Lighthizer and Kono also agreed to “accelerating discussions” on “specific bilateral trade issues.”