Members
of the House and Senate registered their opposition to several Trump
administration proposals to revamp NAFTA this week as the fifth round of
negotiations to update the agreement got underway in Mexico City. Expectations
for the round were dampened when the three trade ministers announced they would
not attend.
In a Nov. 15 letter to U.S. Trade Representative Robert Lighthizer, a
bipartisan group of 72 House members from 23 states decried the White House’s
proposal to increase the NAFTA regional content requirements for automobiles
from 62.5 percent to 85 percent and add a requirement for 50 percent U.S.
content. NAFTA has led to “increased vehicle production in the United States,
more secure jobs for those working in the industry, and a globally competitive
U.S. motor vehicle industry that leads the world in innovation,” the letter
said. But the current rules of origin are “already the highest of any trade
agreement worldwide,” said Rep. Mark Sanford, R-S.C., and changing them as
proposed “seems like a recipe for disaster.” The letter explained that such changes
would “eliminate the competitive advantages provided to the U.S. auto industry
under the current NAFTA rules – or lead to rejection by Canada and Mexico and
the end of the agreement,” in either case resulting in reduced sales,
production, and exports.
In
a separate Nov. 15 letter to Lighthizer, three senators said a proposed
provision that would automatically terminate NAFTA after five years unless it
is specifically renewed is “unnecessary.” (Mexican economy minister Ildefonso
Guajardo reportedly said this week that a review every five years would be
acceptable but not in association with an automatic termination.) They also
criticized the administration’s emphasis on using trade agreements to reduce
the U.S. trade deficit, stating that seeking to create domestic jobs “through
enacting additional barriers to trade and taxes on imports should not be the
focus of U.S. trade policy.” On this point they added that statistics from the
last decade show at the least a negative correlation between U.S. jobs and the
trade deficit and at times actually indicate an inverse relationship.
Meanwhile, some of the nearly 30 NAFTA negotiating groups began meeting Nov. 15
even though the round will not formally begin until Nov. 17. However, the trade
ministers of each country said that following their “substantive discussions”
at a recent meeting of the Asia-Pacific Economic Cooperation forum they agreed
not to attend the NAFTA talks “so negotiators can continue to make important
progress on key chapters advanced in round 4.”
Source: Daily Freeman, U.S.A Saturday, 18 November 2017