U.S. seeks NAFTA ter­mi­na­tion clause

U.S. WANTS TO IN­SERT FIVE-YEAR TER­MI­NA­TION CLAUSE IN THE AGREE­MENT

Lethbridge Herald - - BUSINESS & AG NEWS - Alexan­der Panetta THE CANA­DIAN PRESS — WASH­ING­TON

The United States is seek­ing to in­sert a so-called sun­set clause into a new NAFTA, a con­tro­ver­sial pro­posal that would au­to­mat­i­cally ter­mi­nate the agree­ment af­ter five years un­less all three mem­ber coun­tries agree to ex­tend it.

That idea has been qui­etly floated for months by U.S. of­fi­cials who fi­nally made it pub­lic Thurs­day. It prompted swift re­sis­tance. Cana­dian and Mex­i­can of­fi­cials brushed it off al­most as soon as it was pub­licly re­vealed, call­ing it a bad idea that would cre­ate eco­nomic in­sta­bil­ity and scare busi­nesses away from long-term in­vest­ments.

The pri­or­ity was an­nounced by Don­ald Trump’s com­merce sec­re­tary, Wil­bur Ross. He con­firmed the U.S. will seek some au­to­mat­icter­mi­na­tion clause to en­sure the agree­ment can be con­stantly re-eval­u­ated and im­proved.

“The five-year thing is a real thing that would force a sys­tem­atic re-ex­am­i­na­tion,” Ross told a fo­rum or­ga­nized by the web­site Politico. “You’d have a fo­rum for try­ing to fix things.” Ross said U.S. trade czar Robert Lighthizer, who is lead­ing the NAFTA talks for his coun­try, agrees with him that it’s a good idea. But Ross con­ceded it’s un­clear the other NAFTA coun­tries will ever ac­cept it.

He re­it­er­ated his goal of reach­ing a deal by the end of the year. Af­ter­wards, he said, it will be­come harder to nail down a deal in 2018 as Mex­ico and the U.S. have na­tional elec­tions, the U.S. fast-track law is up for re­newal and Canada has pro­vin­cial elec­tions. If there’s no deal, he said the president is se­ri­ous that he might ter­mi­nate NAFTA.

The idea of an au­to­matic sun­set ap­pears to be a non-starter.

Shortly af­ter Ross left the stage, the U.S. am­bas­sadors of Canada and Mex­ico ap­peared for a panel dis­cus­sion. Both strongly re­jected the idea,and said the U.S. busi­ness com­mu­nity would never ac­cept it ei­ther.

Canada’s David MacNaughton told re­porters he’s been hear­ing this idea for months in closed-door chats. He said he’s never un­der­stood the logic be­hind it, since NAFTA al­ready has a clause al­low­ing any coun­try to with­draw if it re­ally wants to.

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