NAFTA talks create worries
Business groups are bouncing between despair and panic.
U.S. business groups are pinballing between despair and panic as negotiations over a new North American Free Trade Agreement resume, with the Trump administration’s hard-line demands risking a worsening standoff and perhaps the eventual collapse of the talks.
Corporate concerns were only inflamed by President Donald Trump’s Asia trip, which showcased his “America first” trade policy and left the United States isolated as 11 other nations agreed to new trade liberalization measures.
On the eve of this week’s NAFTA talks, the fifth of seven scheduled rounds, the uncompromising U.S. stance now risks scuppering a 23-year-old treaty that helped knit together a colossal continental economy, business groups said.
“Everybody I talk to is very gloomy,” said Bill Reinsch, a former head of the National Foreign Trade Council. “People are expecting very little out of this round.”
In a belated mobilization to save the deal, the U.S. Chamber of Commerce in recent weeks flooded Capitol Hill with executives from companies that stand to lose lucrative trade preferences if Trump fulfills his threat to withdraw from the treaty.
The Trade Leadership Coalition, a separate industry-funded group, last week began airing proNAFTA advertisements in nine states that Trump won in 2016.
The 60-second TV ads — running in Texas, Tennessee, Nebraska, South Dakota, Mississippi, Michigan, Ohio, Iowa and Indiana — highlight gains in manufacturing and agriculture before concluding: “The United States is stronger than ever before … NAFTA works, but President Trump is threatening to withdraw from NAFTA.”
The conjunction of the NAFTA talks in Mexico City this week and the president’s return from his Asia swing have underscored Trump’s difficulty translating his populist trade instincts into tangible achievements.
The last NAFTA round, in Washington, ended on a sour note with Mexico, Canada and U.S. business groups expressing alarm over several U.S. proposals.
“NAFTA is in a very difficult place because the U.S. has put a series of demands on the table that are unlike demands that have been seen in any other trade agreement,” said Robert Holleyman, deputy U.S. trade representative under President Barack Obama.
Key stumbling blocks include the administration’s bid to rewrite the”rules of origin” to require more of a product to be made within North America — and within the U.S. — to qualify for the treaty’s lower tariffs.
Robert Lighthizer, the U.S. trade representative, also is seeking a new “sunset clause” that would require the treaty to be renewed every five years, a feature that business groups say would introduce excessive uncertainty.
Tomatoes are among the many products imported from Mexico.