NAFTA talks cre­ate wor­ries

Houston Chronicle - - BUSINESS - By David J. Lynch

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.

AFP / Getty Images

Toma­toes are among the many prod­ucts im­ported from Mex­ico.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.