U.S. may skip big overhaul in favour of NAFTA upgrade with dab of TPP: officials
WASHINGTON Some provisions of the Trans- Pacific Partnership President Donald Trump quit as part of his pledge to protect American workers from “bad trade deals” may still serve to shape a revised NAFTA trade pact, U.S. officials and trade experts say.
Trump threatened to ditch the 1994 North American Free Trade Agreement too, but eventually decided to renegotiate the pact in talks with Canada and Mexico due to begin in mid-August.
On Monday, U.S. Trade Representative Robert Lighthizer will offer first insights into the administration’s strategy when he presents Congress its objectives for the NAFTA negotiations. Several U.S. administration officials, speaking on condition of anonymity, said Lighthizer will outline plans for updating NAFTA rather than seek a major overhaul of the agreement.
Thus far, the Trump administration offered few specifics, other than expressing its desire to modernize the pact to account for digital trade that was in its infancy in the early 1990s and to tackle festering issues on labour, environment, intellectual property rights and state-owned enterprises.
Since those areas have already been addressed in the TPP negotiated under then-president Barack Obama and agreed to by Canada and Mexico, the pact provides a useful template that could help speed up the NAFTA negotiations, U.S. officials say. They warn, however, that no final decision has been made on using TPP language.
TPP requires members, for example, to allow independent unions, set working hours and safety standards, and deter forced labour. It has also set higher environment standards than other U.S. trade deals. It also set a 70-year copyright term and eight years of patent protection for costly biologic drugs, significantly less than the 12 years applied in the U.S.
Lawmakers from the U.S. industrial heartland particularly want to see enforceable labour standards that would lift Mexico’s chronically low wages, which they blame for U.S. factories migrating to Mexico.
“A lot of the negotiators were just in the room a few years ago doing this stuff. They know where the bodies are buried,” said one business executive with knowledge of NAFTA deliberations.
Some lawmakers want a more ambitious deal than TPP. “Donald Trump promised to get a better deal than TPP, and Americans are going to be deeply disappointed if he doesn’t follow through on NAFTA negotiations,” said Sen. Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee.
Canada and Mexico should be able to agree to U.S. proposals on digital trade and environment that got watered down in the final TPP text, Wyden told Reuters.