Emily Pickrell, and
Country-by-country developments tracking the latest news regarding the North American
Free Trade Agreement and efforts to renegotiate and restructure it.
Canada Gets an Ambassador Nominee
What’s new: After months of speculation, President Donald Trump officially nominated Kelly Knight
Craft as ambassador to Canada. The post was vacated when Trump came into office Jan.
Did you know: The ambassador to Canada post is usually seen as a reward for party loyalists and
big donors. Craft, married to billionaire coal executive Joseph Craft III, is no exception.
She donated $265,400 to Trump’s campaign in 2016, according to Federal Election Commission
filings, and consistently stood by the Republican nominee throughout his campaign.
What to watch for: Craft now joins eight other ambassador nominees in awaiting Senate confirmation. If
confirmed, Craft will be a major influencer in NAFTA talks and carry a key responsibility
of smoothing over any binational trade disputes that jeopardize renegotiations.
Stitch Up NAFTA Loopholes
What’s new: Don’t waste time discussing tariff reinstatements in NAFTA 2.0, the U.S. textile industry
told the U.S. trade representative in
an official comment. Instead, the National Council of Textile Organizations suggested the U.S. close
rule of origin loopholes that allow other countries to piggyback off NAFTA benefits
and sidestep North American fiber, yarn and fabric inputs.
What to watch for: American textile and apparel companies last year produced $74.4 billion in output,
so expect comments by the NCTO to carry weight. The organization testified at the
in-person USTR hearing on NAFTA renegotiations, so look for further pressure by the
industry group to tighten up rule of origin loopholes and customs enforcement.
What’s new: Twenty-four years ago, Rep. Peter A. DeFazio (D-Ore.) voted against NAFTA’s ratification.
And now he’s filed an official comment with the Office of the U.S. Trade Representative,
re-affirming his dissent and urging major changes that the congressman is calling
“The Worker’s Bill of Rights.”
Did you know: The elimination of Chapter 19 panels, the addition of “Buy America” provisions and
the end of the investor state dispute settlement process are the major negotiating
objectives DeFazio outlines in his “Bill of Rights.”
What to watch for: The NAFTA changes DeFazio seeks are exactly the type of issues that some key stakeholders
hope to avoid in NAFTA talks. Canadian officials and Mexican officials have suggested
they will not accept the elimination of chapter 19 or the inclusion of “Buy America”
in NAFTA 2.0. Look for the USTR’s official negotiating objectives to be released mid-July.
Get That Outta Here
What’s new: Opponents of NAFTA from Public Citizen, the AFL-CIO and the Roosevelt Institute narrowed
in on the investor-state dispute settlement (ISDS) system during a briefing on NAFTA
for congressional staffers. They called it an area of NAFTA “that has to come out”
when renegotiations begin.
Did you know: ISDS rules allow investors to personally sue countries when they feel their investor
rights have been violated. Investors then have their case ruled on by a bilateral
tribunal, as laid out in chapter 11 of NAFTA.
What to watch for: Any congressional pressure to remove NAFTA’s Chapter 11 during trilateral renegotiations
would most likely complicate discussions and throw a wrench into plans to finish talks
NAFTA Trucking Trade
What’s new: The statistics are out and U.S. trade with NAFTA partners is up for a sixth-straight
month. That’s according to the Department of Transportation’s Bureau of Transportation
April freight data. The stats show that U.S. trade with Mexico and Canada increased 0.8 percent annually
to $91.1 billion. The report also showed that trucks continue to be the most utilized
mode of transport for NAFTA goods.
What to watch for: Continued NAFTA trade growth with renegotiations on the horizon is a positive sign.
Other data releases showed that U.S. agricultural exports were down in the face of NAFTA uncertainty.
But look for next month’s data release by the Bureau of Transportation Statistics
as a better gauge on how markets are reacting to a renegotiation of the deal. That
data will show how trade fared during May, the month President Trump officially announced
What’s new: Sen. John Cornyn (R-Texas) and Rep. Henry Cuellar (D-Texas) want U.S. Trade Representative
Robert Lighthizer to agree to a meeting on NAFTA between him and all members of Congress
representing constituencies along the U.S.-Mexico border.
Did you know: The U.S.-Mexico border region registered $579 billion in two-way trade between the
U.S. and Mexico in 2016. Exports from Texas to Mexico have increased more than 300
percent since the deal went into effect, according to Cuellar’s office.
What to watch for: If Lighthizer returns to the capitol, expect him to be grilled on specific U.S.
negotiating objectives for NAFTA 2.0. Questions from the Small Business Committee
will most likely touch on intellectual property stipulations in NAFTA and whether
an updated agreement will contain a section on small businesses.
Keep Supply Chains Moving
What’s new: The Advisory Committee on Supply Chain Competitiveness is weighing in on the NAFTA
reboot. Committee members discussed a draft letter to Commerce Secretary Wilbur Ross
outlining priorities for the committee. The
letter was finalized and sent June 27.
Who said: Tiffany Melvin, subcommittee chair, NAFTA working group, said NAFTA negotiations
should not slow down the work that has been under way on border issues. “Do the doable
now,” she said.
Did you know: Integrated supply chains have created 5 million new U.S. jobs through NAFTA related
exports, according to the committee. Nearly 40 percent of U.S. imports from Mexico
originated with U.S. companies.
What to watch for: Advisory Committee members are seeking a meeting with senior Commerce officials
to discuss NAFTA priorities, including streamlined customs procedures and increased
Environmental Commission Meets
What’s new: The NAFTA commission tasked with tracking environmental enforcement in Mexico, Canada
and the U.S. received its 89th complaint of lax enforcement June 26. The complaint says Canada is not enforcing
laws on the leaking of harmful substances from oil sands tailings ponds in Northeast
Who said: The new complaint was announced during an annual environmental gathering of the Commission
for Environmental Cooperation (CEC) on Canada’s Prince Edward Island June 27. Noticeably
absent from the meeting was substantial comment on impending NAFTA renegotiations.
What to watch for: Three complaints are now pending with the CEC. In addition to the new Canadian complaint,
there are two Mexican complaints. But don’t expect a result any time soon. Reviewing
a submission can take two and a half years. So there may be a new NAFTA in place before
the review is complete. Also, the silence on impending renegotiation at the Commission’s
annual gathering suggests it won’t publicly push for certain environmental revisions
in the trilateral agreement. They’re leaving that to negotiators.
Dairy Not Laughing Matter
What’s new: Canada’s agriculture minister may have
joked and had a good time with his U.S. and Mexican counterparts during a visit to Savannah,
but behind the scenes, he was securing his position as a staunch supporter for Canada’s
controversial dairy supply management program. He
told the Globe and Mail in a phone interview from Savannah that his government would defend
the program against any changes.
What to watch for: Dairy farmers in Canada should breathe a sigh of relief as American NAFTA negotiators
prepare for a fight. Canada’s top agriculture official said NAFTA’s sections dealing
with agriculture will get a small “tweak”
in a NAFTA 2.0. But if that’s the case, somebody forgot to tell President Trump who
wants to use NAFTA talks to address bilateral trade grievances. “Some very unfair
things have happened to our dairy farmers,” Trump told a Wisconsin audience in April,
referring to Canada’s dairy policy.
Georgia Meets Ontario
What’s new: Ontario Premier Kathleen Wynne met with Georgia Gov. Nathan Deal and some of the
state’s top business leaders to talk up NAFTA and the benefits of free trade. Wynne
said she and Deal remain committed to supporting sectors that are tightly linked through
integrated supply chains. She also met with representatives of film and production
firms SIM Digital and Pinewood Studios, which have operations in Toronto.
Did you know: Ontario accounted for more than half of the C$12 billion ($9 billion) in goods trade
between Canada and Georgia in 2016, including Ontario imports of C$1.6 billion ($1.2
billion) in vehicles and vehicle parts. More than C$140 million ($105 million) worth
of vehicles and parts flow between Ontario and Georgia each month.
What to watch for: One of Ontario’s main concerns is “Buy American” policies, including legislation
approved by New York state that takes effect in April 2018. Wynne says Ontario’s free
trade advocacy efforts led to narrowing application of the provisions and making them
much less punitive, but warned that the fight isn’t over. Look for more push back
from Canada on any protectionist moves from the U.S.
NAFTA Road Show in Ohio
What’s new: International Trade Minister Francois-Philippe Champagne recently took Canada’s pro-NAFTA
pitch on the road to Cincinnati to remind Ohioan officials and business leaders how
much their state’s economy relies on Canada. Champagne met with Ohio House Majority
Leader Dorothy Liggett Pelanda (R) and representatives of major businesses, including
Procter & Gamble, DHL International GmbH.
Did you know: Champagne also pitched the benefits of free trade to Cincinnati Reds chief operating
officer Phil Castellini and chatted with four-time Major League Baseball All-Star
Joey Votto, the team’s Canadian-born first baseman.
Did you also know: Almost 39 percent of Ohio’s merchandise exports are to Canada, so the state sells
more to Canada than the next eight largest foreign markets combined.
What to watch for: The Ohio trip follows on similar visits by Champagne and other cabinet ministers
to various U.S. states to highlight the importance of open bilateral trade, and Champagne’s
staff says stay tuned for more trips.
Protect Chapter 19
What’s new: The Business Council of Canada, headed by former deputy prime minister John Manley
and representing some of Canada’s top international firms, will stand firm in backing
Canada’s demands for a NAFTA dispute mechanism similar to those already negotiated
for the Trans-Pacific Partnership or the Canada-European Union Comprehensive Economic
and Trade Agreement.
Who said: Council spokesman Ross Laver told Bloomberg BNA Canada should not accept U.S. demands
that a U.S. body determine if the U.S. is in compliance with the trade deal. Laver
said the Chapter 19 dispute mechanism has worked well and Canada does not see it as
What to watch for: Expect Canadian firms and business advocacy groups to continue lobbying efforts
to NAFTA negotiators through the federal government.
Potential Pipe Dream
What’s New: Former Mexican President Vincente Fox envisions a future in which legal marijuana
flows across the Mexican border and supplies up to 60 percent of U.S. cannabis consumption.
What to watch for: He told participants at a recent cannabis convention in California that Mexico intends
to take the lead in marijuana exports and that the drug should be addressed in NAFTA
Strength Through Unity
What’s new: Two sister organizations responsible for environmental infrastructure projects along
the U.S.-Mexican border will soon operate as a single entity after a joint board of
directors meeting in Mexico
approved the merger.
Did you know: The two organizations, the North American Development Bank in San Antonio and the
Border Environment Cooperation Commission in Ciudad Juarez, were formed out of a 1993
NAFTA side agreement on the environment.
What to watch for: Final formalities for the merger will likely be worked out later this year. The American
government approved the merger in January and the Mexican Senate approved the change
in April, signaling a binational desire to create stronger environmental infrastructure
projects in the border region. Look for this merger to hint at stronger environmental
commitments in NAFTA 2.0.
NAFTA Energy Goals
What’s new: The U.S. and Mexico should increase data sharing, convene increased energy industry
dialogues and better tap into binational skilled labor markets, according to the
first series of recommendations issued by the U.S.-Mexico Energy Business Council. Twenty-six total recommendations
were issued during the council’s second meeting since its founding in 2016.
Who said: “I think that if we say that the work has changed, it’s an understatement,” council
co-chair and Under Secretary for Foreign Trade at Mexico’s Secretariat of Economy
Juan Carlos Baker said. Since its founding at the 2015 U.S.-Mexico High Level Economic
Dialogue, the council has found itself in the midst of a discussion on how to modernize
NAFTA’s energy components.
What to watch for: The U.S.-Mexico Energy Business Council is not set to meet again until late 2017 in
Mexico City. Because officials hope to wrap up NAFTA negotiations by December, look
for this first set of recommendations to influence any trilateral negotiations on
‘Chapter 19 or Bust’
What’s new: Mexico must resist a U.S. attempt to rid NAFTA of Chapter 19, a former top Mexican
economic official advised at an
event at the Peterson Institute for International Economics. Chapter 19 establishes a panel
review process for antidumping and countervailing duty disputes between NAFTA partners.
Who said: Antonio Ortiz-Mena, a senior advisor at Albright Stonebridge Group and former Head
of Economic Affairs at the Embassy of Mexico in the United States, said that “it’s
NAFTA chapter 19 or bust.” Mexico and Canada would almost certainly be adversely affected
by the elimination of NAFTA dispute panels at a time when the U.S. is upping trade
policy enforcement, he added.
What to watch for: Elimination of Chapter 19 is likely to be a key negotiating objective for the U.S.
in NAFTA talks. Major pushback from Mexico could lead to a rough start to formal NAFTA
renegotiations and derail hopes of finalizing NAFTA 2.0 by December.
Bound for New England
What’s new: When regional leaders from all three countries meet July 14 in Rhode Island to discuss
their common interests regarding trade, environmental issues are likely to be one
of the key topics. Mexican leaders plan to push hard to ensure that an environmental
agreement is included in the main text of the new agreement and is in line with other
more recent trade agreements.
Who said: Mexico City’
Mayor Miguel Mancera told Bloomberg BNA that he plans to push for an environmental
agenda in NAFTA that parallels that found in the Trans-Pacific Partnership, which
created a range of enforceable commitments for environmental issues. Mancera is among
the first to campaign for the issues included in the TPP.
What to watch for: The Mexican Business Advisory Council plans to attend the July meeting, and its support
for stricter environmental standards will be essential in selling the idea to the
country as a whole.
What’s new: As Mexico waits for the U.S. to issue its strategic objectives for the NAFTA renegotiation
which it expects to do by July 17 — Mexico’s private sector, which essentially provides
technical sector-by-sector expertise during the negotiations, is developing strategies
to handle three different scenarios of U.S. demands.
Did you know: Mexico is preparing for the U.S. to either negotiate sector-by-sector; or to focus
on manufacturing or to focus on rules of origin and related tariffs. If the focus
is on rules of origin, the negotiations could focus on revising the rules in favor
of more regional content and further limiting unfair competition, according to Moises
Kalach , who heads the strategy room for Mexico’s Business Advisory Council.
What to watch for: Mexican trade officials say they will be open to changes to rule of origin requirements
but have not revealed the nature of these changes. Look for more information about
Mexico’s approach to rules of origin after the U.S. announces its objectives.
WHAT WE’RE READING
Policy PapersThe Bipartisan Policy Center simplifies the complexities of NAFTA and spells out the
impact of the trade agreement in its latest
NAFTA did not matter as much as most people think, but renegotiation matters a whole
lot, writes Russell A. Green and Tony Payan in a Rice University Baker Institute for
Trump is going about reducing U.S. trade deficits all wrong. The president’s rhetoric
on NAFTA is proof of that, writes C. Fred Bergsten in a Peterson Institute for International
News ReportsCanadian officials are building up troves of data breaking down the effect of U.S.-Canadian
trade by congressional district in an attempt to convince law makers of the benefits
of NAFTA, BC Local News
Canada will have lots of negotiating leverage during NAFTA talks despite it having
a smaller economy than the U.S., political economist Maxwell Cameron
writes in HuffPost Canada.
Quebec Premier Philippe Couillard left a 20-minute meeting with Commerce Secretary
Wilbur Ross feeling more optimistic that U.S.-Canada trade disputes can be resolved,
A number of U.S. agricultural exports to Mexico fell in the first four months of 2017
due to uncertainty over NAFTA’s future, the Wall Street Journal
American energy firms are enjoying an energy trade surplus in Mexico but that could
change if Trump takes too hard of an approach with NAFTA, the Economist
The U.S. Chamber of Commerce warned the government against trying to include “buy
policies in NAFTA, the Washington Examiner
To contact the reporters on this story: Rossella Brevetti in Washington at
Peter Menyasz in Ottawa at
Emily Pickrell in Mexico City at
firstname.lastname@example.org, Andrew Wallender in Washington at
email@example.com, and Jeremy Hainsworth in Vancouver at
To contact the editor responsible for this story:
Jerome Ashton at
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