Business & Tech

Trump notifies Congress he’ll renegotiate NAFTA, but details are scarce

Robert Lighthizer is the US trade representative.

Associated Prtess

Robert Lighthizer is the US trade representative.

WASHINGTON — The Trump administration on Thursday gave Congress official notice that it plans to renegotiate NAFTA but provided only the vaguest of hints about modest changes that President Trump would seek to an agreement that he has called “the worst trade deal ever.”

In a brief letter, Robert Lighthizer, the newly confirmed US trade representative, said the administration aimed to support better-paying jobs and economic growth by modernizing the 23-year-old agreement. But the notice — a dramatically scaled-back version of a draft the administration circulated earlier this year — promised no major modifications of the sort the president has hinted he will seek.

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Trump had threatened to withdraw from the agreement, only to relent in late April when the leaders of Canada and Mexico, the other parties to the deal, asked him to renegotiate, instead.

The president, whose campaign trail vows to tear up NAFTA appealed to his base of disaffected working-class voters aggrieved by globalization, is under mounting pressure to follow through on his pledge. But Trump faces stiff resistance from business-minded Republicans in Congress and sectors that fear major changes would harm their bottom lines.

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“Today, President Trump fulfilled one of his key promises to the American people,” Lighthizer said Thursday. “For years, politicians have called for the renegotiation of this agreement, but President Trump is the first to follow through with that promise.”

The move was met with skepticism by organizations that have long pressed for major changes to NAFTA and have argued that Trump had already fallen short of his promises on trade.

“Donald Trump promised that he’d fix NAFTA on his first day in office,” Michael Brune, executive director of the Sierra Club, an environmental group, said in a statement. “One hundred and nineteen days later, he has managed to send Congress a two-page letter that fails to include any real plan to fix a deal that has undermined environmental protections, eliminated jobs, undercut wages, polluted our air and water, and fueled climate change.”

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The page-long letter stood in stark contrast to an eight-page version circulated on Capitol Hill in March, which proposed adding a provision to allow tariffs to be reinstated if a flood of imports threatened to harm a domestic industry. It also said the Trump administration would seek to adjust the agreement’s rules of origin, or how much of a product must be made in a NAFTA country.

The notice sent Thursday instead mentioned repeatedly that any changes would be the result of congressional consultation and pledged close coordination and “transparency” with lawmakers throughout the renegotiation process. It laid out the framework for the talks in only the most general terms. The letter was required under a law that mandates that the president give Congress at least 90 days’ notice before opening a trade negotiation.

“In particular, we note that NAFTA was negotiated 25 years ago, and while our economy and businesses have changed considerably over that period, NAFTA has not,” Lighthizer said in the letter.

He noted that “digital trade” had barely begun when the agreement took effect. And new provisions will be needed, he said, to address intellectual property rights, state-owned enterprises, and labor and environmental measures.

“Moreover, establishing effective implementation and aggressive enforcement of the commitments made by our trading partners under our trade agreements is vital to the success of those agreements and should be improved in the context of NAFTA,” Lighthizer said.

Mexico’s Economy Ministry released a statement welcoming the announcement, although it did not address any of the specific issues outlined in the letter Lighthizer sent to Congress.

“Mexico reaffirms its willingness to update NAFTA to face the challenges of the twenty-first century,” it said. “The countries of North America deserve a modern instrument to regulate their trade relations.”

Foreign Minister Luis Videgaray said: “We are prepared. We are ready.”

Mexican officials have been eager to begin the negotiations with an eye to concluding them before Mexico’s presidential election campaign begins next year.

Justin Trudeau, Canada’s prime minister, and his Cabinet ministers have repeatedly said that Canada welcomes the opportunity to renegotiate and modernize NAFTA. The Canadian government did so again Thursday.

“We are at an important juncture that offers us an opportunity to determine how we can best align NAFTA to new realities — and integrate progressive, free and fair approaches to trade and investment,” said Chrystia Freeland, the minister of foreign affairs, who has been charged by Trudeau to focus on relations with the Trump administration. “We are steadfastly committed to free trade in the North American region and to ensuring that the benefits of trade are enjoyed by all Canadians.”

Canadians have long had their own problems with the trade agreement. The country has frequently been at the losing end of challenges brought under the agreement by US corporations.

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