NAFTA TALKS: United States opens trade negotiations with Trump’s demands for major changes, not minor tweaks
Trump seeks more than ‘mere tweaking,’ U.S. trade czar says
WASHINGTON — The United States opened the first round of negotiations for a new North American Free Trade Agreement on Wednesday with a muscular message that it will push for major changes, not just mere tweaks.
The early rhetorical stomping from the economic giant in the middle of North America was at odds with the message of amity and mutual benefit emanating from the continent’s northern and southern amigos.
The rough-and-tumble style, however, was not matched by the substance.
The U.S. listed a few demands and they were expected:
Changes in the auto sector that mean more production in North America, including the U.S.
Changes to the dispute-resolution system.
A general rebalancing of trade relationships.
American trade czar Robert Lighthizer called it a momentous occasion. He credited his boss for it.
And he castigated the existing NAFTA as a failed agreement for many Americans, in those communities that have lost jobs and industries.
“This is an historic day for the United States,” Lighthizer said.
“American politicians have been promising to renegotiate NAFTA for years. But today President Trump is going to fulfil those promises.”
Lighthizer said he completely shares Donald Trump’s views on trade. And that view, he said, is that the U.S. wants substantial changes to NAFTA.
“I want to be clear: He is not interested in a mere tweaking of a few provisions and a couple of updated chapters,” Lighthizer said.
“We feel that NAFTA has fundamentally failed many, many Americans and needs major improvement.”
He said these changes must include:
On auto parts, new rules for imports, so cars include “higher” North American continent and “substantial” U.S. content under a revised tariff-free threshold. It’s still unclear what percentages the U.S. will seek and whether it will insist on an American-made percentage.
A new dispute-settlement mechanism that respects national sovereignty and democratic processes.
That question has been a historic irritant with Canada. It was the final issue resolved on the final night of negotiations in the 1987 agreement.
At issue is whether international panels should have power to settle cross-border disputes between companies.
Canada doesn’t want American courts deciding irritants like softwood lumber.
Reacting to Lighthizer’s statement, Peter Clark — a Canadian trade expert who has sat on the dispute panels — said there’s probably room for compromise, like possibly allowing extraordinary appeals to domestic courts:
“Is there some middle ground? Can we set up a panel of retired Canada and U.S. judges, for instance?”
Another trade observer admits he was surprised by the tone.
“It’s an aggressive posture,” said Dan Ujczo, a Canada-U.S. attorney with Dickinson Wright.