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Trump administration takes formal step to launch renegotiation of NAFTA

By Don Lee • May 19, 2017 at 8:00 AM

WASHINGTON — The Trump administration, taking the first formal step toward overhauling the North American Free Trade Agreement, notified Congress Thursday of its intent to renegotiate the pact with Canada and Mexico in 90 days.

The letter to lawmakers, sent by the newly confirmed U.S. Trade Representative Robert Lighthizer, means that Trump’s trade officials could launch talks with Canadian and Mexican officials as soon as Aug. 16.

“Today we are one step closer to providing long overdue relief for Ohioans hurt by NAFTA,” Sen. Sherrod Brown (D-Ohio) said. “I’ve been clear about what NAFTA renegotiation should look like and remain ready to help cut the best deal for American workers. We’ve heard a lot of promises from this Administration on trade and the President needs to follow through. As with every trade deal, I’ll hold this Administration’s approach to NAFTA to the same standard I’ve always used: does it put Ohio workers first?”

Lighthizer, during a hastily called telephone briefing with reporters, said that in giving notice to Congress of a 90-day consultation period — which is required under so-called fast-track trade legislation — President Donald Trump was moving to fulfill his promise to “permanently reverse the dangerous trajectory of American trade.”

"While NAFTA has been an overall positive for American agriculture, any trade deal can always be improved,” Agriculture Secretary Sonny Perdue said. “As President Trump moves forward with renegotiating with Canada and Mexico, I am confident this will result in a better deal for our farmers, ranchers, foresters, and producers.

“When the rules are fair and the playing field is level, U.S. agriculture will succeed and lead the world,” Perdue added. “It's why we recently announced the creation of an undersecretary for trade at USDA, because as world markets expand, we will be an unapologetic advocate for American agriculture. As I have often said, if our people continue to grow it, USDA will be there to sell it.”

Last week, Perdue announced the creation of an undersecretary for trade and foreign agricultural affairs in the USDA, a recognition of the ever-increasing importance of international trade to American agriculture. The new undersecretary will work hand in hand with Commerce and the USTR and help open up even more markets to American products.

Agricultural trade is critical for the U.S. farm sector and the American economy as a whole. U.S. agricultural and food exports account for 20 percent of the value of production, and every dollar of these exports creates another $1.27 in business activity.

Additionally, every $1 billion in U.S. agricultural exports supports approximately 8,000 American jobs across the entire American economy. As the global marketplace becomes even more competitive every day, the United States must position itself in the best way possible to retain its standing as a world leader.

During the campaign and as president, Trump repeatedly trashed NAFTA as a “disaster,” calling it the worst trade agreement ever. Just weeks ago, Trump said he was close to issuing an order to withdraw from NAFTA, only to reconsider the action hours later.

Lighthizer, a veteran trade lawyer and negotiator who was confirmed last week as Trump’s last Cabinet member, on Thursday took a much more conciliatory tone.

Although Trump has often held out the threat of pulling out of NAFTA, Lighthizer said that his hope and expectation was that such drastic action would not be necessary, noting that “as a starting point for renegotiations, we should build what has worked in NAFTA and change what has not.”

He called his Mexican and Canadian trade counterparts “tremendously talented individuals,” and said the parties were “all entering the process in good faith.”

Lighthizer said he believed that NAFTA, which took effect in January 1994, had proved successful for some sectors, including investment services, agriculture and energy. But he singled out manufacturing as an area of deficiency, particularly involving Mexico.

He also noted that the 23-year-old agreement did not include provisions related to digital trade and that matters of the environment were “an afterthought.”

“Our aim is that NAFTA be modernized,” Lighthizer said in a letter formally notifying Senate Democratic leader Charles E. Schumer of New York. Among the provisions that Lighthizer cited that would be addressed are intellectual property rights, regulatory practices, state-owned enterprises, labor and environment. The list did not mention currency practices, something that Schumer and other congressional Democrats have sought to be included in trade deals.

Lighthizer did not address specific areas in manufacturing, and he took only a couple of questions from reporters. But Trump and his administration officials, including Commerce Secretary Wilbur Ross, who with Lighthizer is leading the charge on trade, have been critical of how NAFTA prompted car and car parts makers to establish plants in Mexico.

Trump’s trade officials also are likely to try to limit Canadian and Mexican companies’ ability to win U.S. government procurement contracts, and the administration is almost certain to seek the elimination of a provision that allows an arbitration panel to decide complaints about goods that are allegedly dumped or unfairly subsidized by governments — a change that Canada in particular is expected to resist.

In keeping with Trump’s belief that the U.S. has been short-changed in multilateral trade agreements, Lighthizer said he expected a lot of the negotiations to be bilateral, although he did not take a hardened position on that.

In the letter to Schumer released Thursday morning by his office, Lighthizer described the broad goal of the renegotiation as getting a deal that would produce higher-paying jobs for Americans and grow the economy. Lighthizer said specific U.S. objectives for a revised NAFTA would be provided to Congress 30 days before the start of the talks.

Lighthizer said he hoped that negotiations could be concluded this year.

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©2017 Los Angeles Times

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Distributed by Tribune Content Agency, LLC.

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Sen. Sherrod Brown (D-Ohio) held a series of roundtables with Ohio workers in recent weeks to get their input on what the priorities should be for a renegotiated NAFTA. The plan builds on Brown’s efforts to work with President Donald Trump to fulfill the President’s campaign promises on trade.

Immediately after President Trump’s election, Brown reached out to his transition team to offer his help on retooling U.S. trade policy. Brown wrote to Trump in November offering specific steps to work together on trade and Trump responded with a handwritten note. Since then, Brown has spoken with the President about Buy American and has had multiple conversations with top White House trade advisers, including Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer.

Brown opposed NAFTA when it was first passed. He now sits on the Senate Finance Committee, which has jurisdiction over trade agreements.

NAFTA RENEGOTIATION

Brown’s Four-Point Plan for Securing the Best Deal for American Workers

1. SECURE ANTI-OUTSOURCING AND BUY AMERICA PROVISIONS UP FRONT

We know what causes outsourcing: low wages, exploited workers and weak, or non-existent, environmental protections in other countries that encourage companies to relocate where it’s cheaper to do business. This has created a race to the bottom that hurts all workers, brings down wages and jeopardizes clean air and water. So, Brown’s plan calls on the Administration to secure commitments from Mexico and Canada to enforce strict worker and environmental protections before even sitting down at the negotiating table.

In the past, U.S. trade negotiators have used up their leverage without securing strong enough standards to protect American jobs. By securing strong anti-outsourcing provisions up front, Brown’s plan ensures American jobs aren’t up for negotiation.

In addition to tough worker and environmental protections, Brown’s plan insists that Mexico and Canada agree up front that Buy America standards will not be weakened in negotiations.

2. DON’T PIT AMERICAN WORKERS AND INDUSTRIES AGAINST EACH OTHER IN THE NEGOTIATIONS

Too often, U.S. trade negotiators have pitted American workers and industries against each other as bargaining chips in the negotiation. For example, auto industry priorities get weighed against the needs of farmers. American workers shouldn’t be horse-traded simply for the sake of cutting a deal. A renegotiated NAFTA must be a good deal for all workers.

So, Brown’s plan calls on the White House to develop individualized negotiation strategies for manufacturing sectors that have been hurt by outsourcing. Identifying sectors that are susceptible to outsourcing and developing plans to address their unique needs and vulnerabilities in advance will ensure American workers and industries aren’t sacrificed during negotiations.

3. BUILD ENFORCEMENT TOOLS THAT FAVOR AMERICAN WORKERS, NOT FOREIGN CORPORATIONS, WHEN THE DEAL IS VIOLATED

Even good trade deals don’t mean anything if they aren’t enforced. For too long, U.S. free trade agreements have included ineffective procedures for workers to challenge violations and super-sized procedures for corporations. Investor-state dispute settlement provisions have created private, C-suite courts that allow foreign corporations to undermine U.S. laws and take advantage of American workers, while workers wait years for trade violations to be addressed – if they are addressed at all.

Brown’s plan would do away with special courts for corporations and create a better process for workers to get remedies if Mexico and Canada violate the agreement.

4. INCLUDE WORKERS IN THE NEGOTIATIONS

Time after time, we’ve seen corporate lobbyists writing trade deals behind closed doors, while American workers are locked out.

Brown’s plan calls on the White House to make U.S. proposals public before and after each negotiating round and give workers, consumers and public interest advocates equal representation with corporations on Trade Advisory Committees that wield special influence in negotiations.

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