US launches 90-day countdown to Nafta revamp

US Trade Representative   Robert Lighthizer formally notified Congress of the intent to revamp the 23-year- old pact with Canada and Mexico, which accounts for about $1.4 trillion in annual trade.
US Trade Representative Robert Lighthizer formally notified Congress of the intent to revamp the 23-year- old pact with Canada and Mexico, which accounts for about $1.4 trillion in annual trade. PHOTO: REUTERS

Announcement comes as US begins probe into subsidies for made-in-Canada aircraft

WASHINGTON • The Trump administration has launched a 90-day countdown to renegotiating the North American Free Trade Agreement (Nafta), part of its aggressive stance towards trade that it says has hurt US workers.

That combative posture was underscored when the Commerce Department followed the news with the announcement of a new trade investigation against aircraft produced by Nafta partner Canada, saying it received unfair subsidies.

That follows on the heels of disputes with Canada over lumber imports and dairy exports, and with Mexico over sugar imports, just a small sample of the many trade disputes announced in the last three months.

Commerce Secretary Wilbur Ross said on Thursday that with the Nafta announcement, "we intend to notify not just Congress, but all our trading partners, that free and fair trade is the new standard for US trade deals".

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"Since the signing of Nafta, we have seen our manufacturing industry decimated, factories shuttered, and countless workers left jobless. President (Donald) Trump is going to change that," he said.

During the campaign, Mr Trump vowed to withdraw from Nafta, saying it was a disaster for US workers. His repeated complaints that bad trade deals destroy American jobs gained him support among working-class voters, who helped lift him to the White House.

But Mr Trump backed away from the threat after Canadian and Mexican officials urged Washington to renegotiate and modernise - rather than scrap - the trade pact, which has boosted industry and created tight manufacturing, agriculture and business links throughout the region.

Newly installed US Trade Representative (USTR) Robert Lighthi- zer formally notified Congress of the intent to revamp the 23-year- old pact with Canada and Mexico, which accounts for about US$1 trillion (S$1.4 trillion) in annual trade.

Renegotiation talks will begin no earlier than Aug 16, he said in a statement. He added that he hopes to complete negotiations by the end of this year.

During the required 90-day period, the USTR will consult with "Congress and American stakeholders to create an agreement that advances the interests of America's workers, farmers, ranchers and businesses", he said.

Mr Lighthizer said Nafta had not kept up with changes in the economy and business over the last 25 years, including the boom in e-commerce.

"Many chapters are outdated and do not reflect modern standards," he said.

Mr Ross last week said the White House had not yet decided whether to continue the pact as a three-nation deal, or split it into two separate bilateral agreements, something Canada and Mexico oppose.

He promised a very aggressive negotiating schedule to conclude the talks as quickly as possible.

The announcement came as Mexico's Foreign Secretary Luis Videgaray was meeting US Secretary of State Rex Tillerson in Washington. The Mexican official said he welcomed the opportunity to update the agreement, but insisted it must remain trilateral.

Canada's Foreign Affairs Minister Chrystia Freeland, who met Mr Lighthizer on Tuesday and meets her Mexican counterpart in Mexico City next week, also said the negotiations must be among the three nations.

She defended the trade deal, which has been updated 11 times, but stressed that Canada will seek to get the best deal for its citizens.

"Nine million American jobs depend on trade and investment with Canada. Our integrated economies and supply chains support millions of jobs across the continent," she said.

AGENCE FRANCE-PRESSE, REUTERS

A version of this article appeared in the print edition of The Straits Times on May 20, 2017, with the headline 'US launches 90-day countdown to Nafta revamp'. Print Edition | Subscribe