Clock ticks on U.S. bid at re­write of NAFTA

Orlando Sentinel - - NATION & WORLD / FROM PAGE ONE - By Paul Wise­man

WASH­ING­TON — Pres­i­dent Don­ald Trump’s team is run­ning out of time to re­write a trade pact with Canada and Mex­ico this year just as it’s con­fronting China and spar­ring with its al­lies over U.S. tar­iffs on im­ported steel and alu­minum.

If ne­go­tia­tors can’t agree on a re­vamped North Amer­i­can Free Trade Agree­ment soon — House Speaker Paul Ryan set an in­for­mal Thurs­day dead­line — the talks could drag into 2019. Or Trump could carry out his threat to aban­don the agree­ment he’s la­beled a job-killing “dis­as­ter” and throw com­merce among the three NAFTA coun­tries into dis­ar­ray.

“The win­dow is clos­ing rapidly,” said Dan Ujczo, a trade lawyer at Dick­in­son Wright in Colum­bus, Ohio.

NAFTA is hardly the only ur­gent item on the ad­min­is­tra­tion’s trade agenda. Trump was ex­pected to meet Thurs­day with China’s Vice Premier Liu He to try to avert a trade war. Liu will also meet with a U.S. team led by Trea­sury Sec­re­tary Steven Mnuchin.

The U.S. and China, locked in a con­flict over Bei­jing’s de­mand that Amer­i­can com­pa­nies turn over tech­nol­ogy to gain ac­cess to the Chinese mar­ket, have threat­ened to slap tar­iffs on $50 bil­lion of each other’s goods. And Trump has asked U.S. Trade Rep­re­sen­ta­tive Robert Lighthizer to find an ad­di­tional $100 bil­lion in Chinese prod­ucts to tax.

The prospect of a trade war be­tween the world’s two big­gest economies has un­nerved global mar­kets and alarmed ma­jor com­pa­nies.

“The stakes are too high for these talks to fail,” said Chris­tine McDaniel, a se­nior re­search fel­low at Ge­orge Ma­son Univer­sity’s Mer­ca­tus Cen­ter. “The U.S. econ­omy, its firms, its work­ers, and its peo­ple all de­pend on be­ing able to buy and sell with their coun­ter­parts at home and across the globe ev­ery day.”

Talk­ing to re­porters Thurs­day, Trump down­played the prospect of a suc­cess­ful ne­go­ti­a­tion with Bei­jing.

“Will that be suc­cess­ful?” he asked. “I tend to doubt it.”

Trade sanc­tions could dis­rupt busi­ness be­tween the coun­tries and po­ten­tially threaten jobs. Con­sumers would be hurt by higher prices for im­ported prod­ucts hit by tar­iffs.

In the mean­time, Ja­pan, a staunch U.S. ally, is threat­en­ing to go to the World Trade Or­ga­ni­za­tion to protest Trump’s tar­iffs on im­ported steel and alu­minum. The pres­i­dent im­posed the tar­iffs in March, ar­gu­ing that reliance on im­ported met­als posed a threat to Amer­ica’s na­tional se­cu­rity. He ex­empted the Euro­pean Union, Canada, and Mex­ico — but not Ja­pan — until June 1.

The steel and alu­minum tar­iffs have an­tag­o­nized tra­di­tional Amer­i­can al­lies. Those coun­ties want per­ma­nent ex­emp­tions from the tar­iffs. Or they want them with­drawn al­to­gether. Don­ald Tusk, pres­i­dent of the Euro­pean Coun­cil, tweeted Mon­day of the United States that “with friends like that who needs enemies.”

Trump is seek­ing to re­vamp NAFTA to try to re­turn auto pro­duc­tion to the United States and shrink Amer­ica’s trade deficit.

The United States is de­mand­ing that a per­cent­age of a car’s con­tent orig­i­nate in a coun­try — the United States or Canada — with av­er­age auto worker wages of around $15 an hour to qual­ify for NAFTA’s du­tyfree sta­tus.

But com­pa­nies have built com­pli­cated sup­ply chains that strad­dle NAFTA borders. In do­ing so, they took ad­van­tage of each coun­try’s strengths — cheap la­bor in Mex­ico, for ex­am­ple, and skilled work­ers and prox­im­ity to cus­tomers in the United States and Canada. Chang­ing the rules, man­u­fac­tur­ers warn, would dis­rupt their op­er­a­tions, raise their costs and put them at a com­pet­i­tive disad­van­tage with man­u­fac­tur­ers in Asia and Europe.

“We are run­ning out of time,” said Rep. Will Hurd , a Re­pub­li­can whose Texas dis­trict borders Mex­ico and ben­e­fits from NAFTA. “But I think the dead­line is not nec­es­sar­ily to­day.”


Pres­i­dent Trump’s team is run­ning out of time to get a NAFTA re­write done in time for a vote by Congress.

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