NAFTA Takes Center Stage

MAY 16, 2017

Sens. Jeff Flake (R-AZ) and Deb. Fischer (R-NE), along with several colleagues, sent a letter this week to the recently-confirmed U.S. Trade Representative Robert Lighthizer, urging a “refresh” of the North American Free Trade Agreement (NAFTA), but cautioning against full withdrawal.

In their letter to Mr. Lighthizer, the Senators noted:

With your rich experience in international trade issues and negotiating trade agreements, we are pleased you are at the helm of the office that facilitates U.S. trade. U.S. trade policy has remained a prominent issue in recent months and it appears that taking a fresh look at the North American Free Trade Agreement (NAFTA) will be an immediate priority.
      
Among other benefits, NAFTA has led to tremendous growth in U.S. trade with Mexico and Canada, integrated cross-border supply chains that benefit U.S. employers, and more than tripled U.S. exports of goods (including agricultural and manufactured goods) and services. Given that the agreement is more than two decades old, there are areas in which NAFTA will benefit from strengthening and modernization. On the other hand, efforts to abandon the agreement or impose unnecessary restrictions on trade with our North American partners will have devastating economic consequences.


With Lighthizer’s confirmation, President Trump is expected to send his official “notification letter” to Congress, commencing the required 90-day consultation with legislators and industry before launching formal negotiations with Canada and Mexico. If the president fails to provide such notification, he will not enjoy the “fast-track” negotiation authority that only requires congressional approval of any new deal by a simple majority.

It is rumored that the president intends to publish a Federal Register Notice that will request industry feedback to help shape the administration’s priorities in those negotiations. Trump has pushed a “Buy American” policy in office and railed against U.S. companies moving their operations to Mexico during the presidential campaign. He has threatened to withdraw the U.S. from NAFTA if he cannot secure better terms for the country.