‘NAFTA talks need quick outcome’
It’s probably a big mistake to set a particular date but the political calendars both here and there suggest it should get done pretty quickly.
WASHINGTON: US and Mexican political deadlines are creating pressure to reach a quick outcome to next month’s talks to rework North America’s regional free trade pact, Commerce Secretary Wilbur Ross said.
The United States, Canada and Mexico are due to begin talks on August 16 to rework the North American Free Trade Agreement (NAFTA), with the US side focused squarely on cutting its US$56 billion trade deficit with Mexico.
“It’s probably a big mistake to set a particular date but the political calendars both here and there suggest it should get done pretty quickly,” Ross told the Economic Club of Washington, DC.
Ross noted the administration’s fast-track authority to negotiate trade deals – which requires Congress to vote on the finished product without changes – is set to expire in mid-2018 and there is no guarantee lawmakers would extend it.
“Given the way Congress is acting right now, who knows what they will decide to do,” he said.
“And in the summer of next year, Mexico has their presidential elections and one of the leading candidates is a relatively anti-American candidate, I would say,” Ross added, in an apparent reference to populist Mexican politician Andres Manuel Lopez Obrador.
The administration last week laid out its NAFTA bargaining goals that seek to reduce US bilateral trade deficits while pressing Ottawa and Mexico City for other important concessions.
Observers say it forms workable basis for talks to start but Washington could complicate matters by digging in on the most contentious points.
Ross said key parts of NAFTA are out of date.
“Any agreement that was done that many years ago before there was a digital economy... at a minimum needs an update,” he said. He pointed to current rules of origin, which specify the share of parts within in finished goods which must be produced in North America to enjoy duty free status.
“Whoever drafted it thought he was being very, very clever by specifying the parts to which these percentages applied,” said Ross.
“Half of those parts aren’t even used anymore.”
Global trade agreements in fact rely on a complex nomenclature system to identify millions of individual products by codes in the international Harmonized System.
The US bargaining position contains elements that were in the 12nation Trans-Pacific Partnership, which the Trump administration abandoned earlier this year.
“There were some very good features to TPP and some of those we will try to build on in trade negotiations,” Ross said Tuesday.
Commerce Secretary Wilbur Ross, US Commerce Secretary