U.S. suggests NAFTA goal: freer online trade

WASHINGTON The Trump administration says liberalizing cross-border online shopping is one of its trade priorities with Canada, according to a document that provides new clues on the administration’s plans entering NAFTA renegotiations.

The statement comes in an exchange of letters between the administration’s nominee for trade czar and the top congressional committee that handles trade, which is considering his nomination.

Canada has one of the lowest allowances in the developed world for online duty-free shopping — Canadian consumers are allowed to purchase $20 worth of goods online from Amazon, eBay or other retailers before duties kick in, compared to $800 in the U.S.

Trade nominee Bob Lighthizer was asked about that by a member of the Senate finance committee, which is one of the congressional bodies that by law must be consulted before, during, and after the U.S. holds trade negotiations.

He received written questions about wine, dairy, softwood lumber and pharmaceuticals, in addition to oral questions and answers at a public hearing this month where lawmakers made it clear they want important changes in NAFTA.

In his written responses, he said the duty-free level, known as “de minimis,” would be an issue.

“I believe that increasing Canada’s de minimis level could be a significant issue in our overall bilateral trade engagement with Canada, as well as in our engagement with Canada in multilateral trade forums,” Lighthizer wrote back, in a 124-page exchange of letters obtained by Inside U.S. Trade.

“I will consult with Congress and domestic stakeholders to develop a strategy that seeks to address concerns with Canada’s low de minimis level.”

That debate has also begun in Canada. It’s pitted online retailers against the lobby group for bricks-and-mortar stores, the Retail Council of Canada which represents 45,000 stores including some giants like Walmart, Best Buy and Lowe’s.

Lighthizer dropped hints on other priorities, without committing himself.

— Pharma: A U.S. drug company, Eli Lilly, has just lost a major lawsuit it launched against the Canadian government and been ordered by a NAFTA tribunal to pay millions in court costs. A lawmaker urged Lighthizer to demand stronger patent protections, which have been repeatedly invalidated in Canada. He replied that intellectual property was a high priority.

—Wine: Asked about restricted access to Canadian grocery shelves, which has already prompted U.S. action, Lighthizer said he would address unfair barriers to U.S. exports.