'America first' to dominate NAFTA negotiations

Posted August 19, 2017

The United States drew a hard line for renegotiating the North American Free Trade Agreement on Wednesday, demanding major concessions aimed at slashing trade deficits with Mexico and Canada and boosting US content for autos. But while Canadian and Mexican representatives emphasized the benefits of the trade alliance in their opening statements, Lighthizer said that NAFTA had "fundamentally failed" many Americans.

While a trade deficit is not a primary measure of whether a trade agreement is working, Freeland said the Canada-U.S. trade relationship has become more balanced and mutually beneficial, and is now "almost perfectly reciprocal".

"When it comes to overall positive results for North America's farmers and ranchers, NAFTA has proved itself as a solid foundation for trade".

He cited Mexico's sales of fruits and vegetables to the U.S.as an example. It settles complaints about illegal subsidies and dumping and has often ruled against the U.S. Trump wants it gone - but Canada says it will walk away from the table if the U.S. pushes for its removal.

Lighthizer put Mexico and Canada on notice that the United States would use its clout as their biggest export customer to wring concessions, saying the United States wanted substantially tougher rules of origin, including a requirement of "substantial US content" for autos.

"So we need to make sure that the ability to move people, trade and services, is protected".

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To modernize the deal, the three sides are looking at how to include e-commerce and other technological developments that did not exist when NAFTA was first negotiated.

In a statement, in the company of the secretary of State in the u.s., Rex Tillerson, Ms. Freeland said Wednesday afternoon that it was a day of "historic" due to the "modernization" of the agreement.

Lighthizer set the stage for comprehensive and potentially drawn-out talks, sending a strong message that Trump is seeking fundamental changes to the 23-year-old trade agreement in order to address a long-standing trade deficit with Mexico and Canada. During the former Obama administration, Cargill is said to have supported the negotiations for the Trans-Pacific Partnership agreement (TPP).

Guajardo said he expected the talks this week to lay out opening positions with the hope that when the negotiations resume next month in Mexico City progress can start to be made in narrowing the differences. "We've said that Brazil and Argentina are two of the big markets that we're looking at, especially for grains and other basic supplies that come from the United States", Moisés Kalach, the worldwide negotiations coordinator of the Mexican private sector, said Wednesday.

Information for this article was contributed by Don Lee of the Los Angeles Times and Andrew Mayeda and Eric Martin of Bloomberg News.

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