Trump Administration Now Seeking More Modest Changes to NAFTA
The Trump administration is changing its tune regarding the North American Free Trade Agreement.
Despite the president calling the pact the “worst deal” in history throughout his campaign and hinting his goal was to abandon the agreement, the White House intends to keep numerous provisions while seeking more moderate changes.
Among the more controversial arrangements Trump intends to keep are the arbitration panels that permit investors in the three nations to circumvent local courts to resolve civil claims. The administration even has a proposal that would improve these bodies’ procedures to resolve disputes.
Is this the bold trade overhaul that Trump promised on the campaign trail?
The White House is mainly seeking limited changes to NAFTA, The Wall Street Journal reported on Thursday, citing an administrative draft proposal circulated in Congress by the Office of the U.S. Trade Representative. Its new objectives would bolster Trump’s “American Made” focus, especially in regard to automotive manufacturing, by giving greater preference to U.S. companies in government procurement. However, it’s missing a lot of Trump’s bold rhetoric and the import tariffs promised for Mexico. The draft also doesn’t weigh in on labor regulations or currency manipulation — two things that Trump has previously said were mandatory to ensure a free-market.
White House Press Secretary Sean Spicer posited there would likely be substantial changes in the proposal after Trump’s nominee for U.S. trade representative, Robert Lighthizer, is confirmed by the Senate. Although, for now, it’s fairly conventional.
Trump’s level of direct involvement in the draft is unclear. While the president has limited some of his harsher words on trade since taking office, the draft only takes a slight American bend with other elements — like the arbitration panels — having a free-trade bias that some have called un-American and pro-business.
The eight-page draft letter also includes numerous objectives that were established by the Obama administration in completing the Trans-Pacific Partnership, including additions to digital trade provisions, state-owned enterprises, labor and environmental obligations, and intellectual property enforcement.
Some alterations are distinctive of the current administration, though.
The biggest changes favoring the Trump agenda include an expanded ability for the U.S. government to apply tariffs on goods from Mexico and Canada, but it only applies when there is a sudden influx of imports that might cause serious harm to a specific domestic industry.
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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"Trump Administration Now Seeking More Modest Changes to NAFTA" This is no surprise. Libertarian free market billionaires like the Koch brothers don't like the idea of an import tax. They also don't like the idea of anything that could restrict trade. They have gone as far as offering a million cash to reelection campaigns of any Repubs facing political heat. All of his bold populist campaign promises are going to crash upon the rocky shores of reality.
@Hummer, @HDC, etc Full disclosure here - I'm Canadian, so don't have a dog in this hunt on American politics. But it seems to me that: President Clinton left the first, and only, surplus budget in a generation George Bush quickly cut taxes, mostly for the top 0.1% (See Ted Talk, Robert Kiyosaki, author of Rich Dad Poor Dad) President Bush had 9-11 on his watch, got embroiled in not one, but two, hopeless wars, stood by while New Orleans flooded, and had the entire world financial system melt down on his watch. President Obama was handed an incredible mess, worst recession since 1929, two hopeless wars. During his time, approx 14M jobs created (about 3500 per day), found Osama bin Ladden, dealt with a congress sworn to oppose everything, and brought some measure of health care to millions. And relatively scandal free. So, for an uninformed Canuck, just why is it folks despise President Obama so much. I don't get it. As to NAFTA, it was set up for cheap labour from Mexico and cheap resources from Canada, with the USA deriving most of the benefit. As a Canadian, OK with me to toss the whole thing out.