US push for freer NAFTA e-com­merce faces wrath

Kuwait Times - - BUSINESS -

A US pro­posal for Mex­ico and Canada to vastly raise the value of on­line pur­chases that can be im­ported duty-free from stores like Ama­zon.com and eBay is emerg­ing as a flash­point in an up­com­ing rene­go­ti­a­tion of the NAFTA trade deal. Vul­ner­a­ble in­dus­tries like footwear, tex­tiles and bricks and mor­tar re­tail in Mex­ico and Canada are push­ing back hard against the pro­posal by the US trade rep­re­sen­ta­tive to raise Mex­i­can and Cana­dian duty-free im­port lim­its for e-com­merce to the US level of $800, from cur­rent thresh­olds of $50 and C$20, re­spec­tively. For the Mex­i­cans, the main worry is that such a move could open a back door for cheap im­ports from Asia and be­yond. For Cana­dian re­tail­ers, the fear is that e-com­merce com­pa­nies will un­der­cut their prices.

The US plan was un­veiled in July as part of the Trump ad­min­is­tra­tion’s goals to rene­go­ti­ate the 25-year-old treaty. While Mex­ico and Canada are still for­mu­lat­ing their re­sponses, Mex­ico City is lean­ing strongly against the pro­posal in its cur­rent form, and Ot­tawa may not be far be­hind. The pro­posed $800 level “opens a com­pletely un­nec­es­sary door” to im­ports from out­side the NAFTA trad­ing bloc, Mex­i­can Econ­omy Min­is­ter Ilde­fonso Gua­jardo said on Thurs­day on the side­lines of a NAFTA-re­lated event, call­ing it “a very sen­si­tive topic.” The grow­ing con­tro­versy over how to ac­count for a bur­geon­ing re­gional ecom­merce sec­tor dom­i­nated by the United States high­lights a rare area where the Trump ad­min­is­tra­tion is push­ing to lib­er­al­ize trade rules rather than tight­en­ing them. — Reuters

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