US Plans Address 'Trade Imbalances,' Subsidies During First Round of NAFTA Renegotiation
Subsidies and “persistent trade imbalances” in North America will be among the issues addressed during the first round of NAFTA renegotiations set for Aug. 16-20, but the working text will remain classified, an Office of the U.S. Trade Representative official told reporters Aug. 15. “The text itself that will be exchanged among the governments is classified text, so that is not released,” the official said during a briefing that generally summarized the areas USTR plans to cover throughout negotiations. “But we do conduct an extremely transparent and collaborative effort … in developing our objectives, and then consulting with Congress and our stakeholders in this ninety-day period and beyond.” Trade Promotion Authority legislation of 2015 requires a 90-day consultation period between the executive and legislative branches before any administration can start formally negotiating a trade deal.
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The USTR official said that trade imbalances, “reciprocal market access,” unfair subsidies, “market-distorting practices by state-owned enterprises” and intellectual property issues will “certainly” be discussed during the first round of negotiations in Washington. The administration will also work to establish “appropriate mechanisms to combat currency manipulation,” add a digital economy chapter, and will discuss trade remedies during negotiating rounds, the official said. The House Democrats and NGO leaders called for USTR to follow through on its objective to incorporate strengthened labor and environmental side agreements into the main NAFTA text, which the USTR official affirmed will be a U.S. target during talks.
The USTR official also said much of Canadian Foreign Affairs Minister Chrystia Freeland's Aug. 14 speech (see 1708140022) reiterated “long-standing Canadian positions.” Freeland said her country will push for the continuance of the Chapter 19 binational antidumping and countervailing duty dispute settlement process, which is at odds with USTR’s written negotiating objectives (see 1707180022).
House Democrats and left-leaning non-governmental organization (NGO) leaders on Aug. 15 said they are looking at renegotiations as an opportunity to conclude a pact they can support, they raised concerns about a private trilateral discussion process. Rep. Rosa DeLauro, D-Conn., called the planned non-disclosure of texts a “serious mistake” and said USTR should release the negotiating text after the first round. “Not having any transparency in this regard raises a good deal of suspicion,” Rep. Tim Ryan, D-Ohio, said during a call with reporters. AFL-CIO trade policy specialist Celeste Drake, however, noted that even USTR’s statement on the classification of texts is a “negotiating position” that her organization and members of the public will continue to try to reverse.
Meanwhile, Sen. Jeff Flake, R-Ariz., in an Aug. 14 letter to U.S. Trade Representative Robert Lighthizer cautioned the administration against adopting AD laws through the agreement that would benefit one industry to the potential detriment of others, and encouraged the maintenance of existing supply chains. Flake said following through on a stated USTR negotiating objective of establishing a separate domestic industry provision for perishable and seasonal products in AD and CV duty proceedings could invite retaliation targeted at a “completely different industry.” The agreement could also improve through expansion of the unified cargo inspections process to “both northbound and southbound cargo at additional ports of entry,” Flake said. NAFTA itself shouldn’t address “trusted trader” programs, but would benefit from development of an organizational framework to “jointly develop border infrastructure to reflect rising trade volumes,” he said.