Administration to renegotiate NAFTA

WASHINGTON — Making good on a campaign promise, the Trump administration took the first formal step toward overhauling NAFTA when it formally told Congress on Thursday that it intends to renegotiate that trade pact with Canada and Mexico.

U.S. Trade Rep. Robert Lighthizer sent a letter to congressional leaders Thursday, starting 90 days of consultations with lawmakers — which is required under socalled fast-track trade legislation — over how to revamp the North American Free Trade Agreement. Talks with Canada and Mexico that could influence more than $1.2 trillion in annual trade and shake up corporate supply chains may begin after that.

The two-page letter offered few details about what changes the administration would seek in the 23year-old pact that President Donald Trump has called “a disaster.” Mr. Lighthizer told reporters that any new deal should do a better job of protecting U.S. factory workers and should be updated to reflect new technologies.

Last month, White House aides spread word that Mr. Trump was ready to pull out of NAFTA. Within hours, the president reversed course and said that he’d seek a better deal

first.

“We are going to give renegotiation a good strong shot,” Mr. Lighthizer said. He refused to say whether leaving NAFTAremained an option.

In keeping with Mr. Trump’s belief that the U.S. has been short-changed in multilateral trade agreements, Mr. Lighthizer said he expected a lot of the negotiations to be bilateral, although he did not take a hardened positionon that.

The trade agreement has been a lightning rod for criticism since it was being negotiated in the early 1990s. During the 1992 presidential campaign, independent candidate Ross Perot famously predicted a “giant sucking sound” as NAFTA pulled U.S. factory jobs south of the border into Mexico. Campaigning last year, Mr. Trump vowed to renegotiate NAFTA and pull out of it he couldn’t geta better deal.

NAFTA took effect in 1994 and triggered a big increase in trade among the three countries. American farmers have mostly benefited from the reduction in trade barriers. But the pact did encourage American manufacturers to relocate some operations to Mexico to take advantage of cheaper labor there, so critics blame NAFTA for wiping out U.S. factory jobs.

“Since the signing of NAFTA, we have seen our manufacturing industry decimated, factories shuttered, and countless workers left jobless,” Commerce Secretary Wilbur Ross said in a statement. “President Trump is going to change that.”

Mr. Lighthizer did not address specific areas in manufacturing, and he took only a couple of questions from reporters. But Mr. Trump and his administration officials, including Mr. Ross, who with Mr. Lighthizer is leading the charge on trade, have been critical of how NAFTA prompted car and car parts makers to establish plants in Mexico.

In March, the administration circulated an eight-page draft letter on NAFTA that disappointed critics by appearing to keep much of the existing trade agreement in place.

Thursday’sletter had fewer specifics. Lori Wallach, director of Public Citizen’s Global Trade Watch, called it “markedly vague.” House Democratic leader Nancy Pelosi complained that “the president’s vague NAFTA letter is a stark contrast with the aggressive promises he made to hard-working families during thecampaign.”

ButRepublican congressional leaders promised to work with the administration to crafta better deal.

“We look forward to working with the administration to strengthen the agreement in a seamless way and ensure that we retain the current benefits for American workers, farmers and businesses,” said Texas Republican Rep. Kevin Brady, chairman of the House Ways and Means Committee.

Mexico and Canada signaled that they welcomed the opportunity to modernize the agreement.

Thomas Donohue, president of the U.S. Chamber of Commerce, urged the administration to reach a deal quickly.