U.S. pro­poses ter­mi­na­tion clause in­side new NAFTA

Penticton Herald - - WORLD -

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 pro­posal has prompted swift re­sis­tance. Cana­dian and Mex­i­can of­fi­cials brushed it off al­most as soon as it was pro­posed Thurs­day, call­ing it a bad idea that would cre­ate eco­nomic in­sta­bil­ity and scare busi­nesses away from long-term in­vest­ments.

The pri­or­ity was an­nounced earlier in the day by Don­ald Trump’s com­merce sec­re­tary. Wil­bur Ross con­firmed the U.S. will seek some au­to­matic-ter­mi­na­tion clause to en­sure the agree­ment can be reg­u­larly re-eval­u­ated and im­proved.

“(It) 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 agrees it’s a good idea, but con­ceded that it’s un­clear whether Canada and Mex­ico, the other NAFTA coun­tries, would ac­cept the pro­posal.

He said he wants a deal by the end of the year and would rather not ter­mi­nate the agree­ment — as Trump has threat­ened to do.

Ross said it will be­come harder to get a deal after this year for four rea­sons: Next year, the U.S. fast-track law needs to be re-af­firmed in Congress, the U.S. has con­gres­sional elec­tions, Mex­ico has pres­i­den­tial elec­tions and Canada has pro­vin­cial elec­tions.

The pres­i­dent is se­ri­ous when he threat­ens to can­cel NAFTA, he added.

“It’s a very real thing,” Ross said. “But it is not the pre­ferred op­tion.”

The U.S. am­bas­sadors of Canada and Mex­ico both ap­peared on the same stage shortly after Ross ex­ited Thurs­day. Both re­jected the idea, say­ing the busi­ness com­mu­nity in all three coun­tries would never ac­cept it.

Canada’s David MacNaughton said sun­set clauses are usu­ally as­so­ci­ated with things you in­tend to end — not with some­thing like a trade agree­ment whose in­her­ent point is to project long-term pre­dictabil­ity.

If the same five-year sun­set idea were ap­plied to mar­riages, the di­vorce rate would be far higher, MacNaughton joked.

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