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President Donald Trump said he would like to speed up North American Free Trade Agreement renegotiations if possible, but was adhering to statutory limits.
“All of the statutory guidelines we’re adhering to I would like to speed it up if possible,” Trump said after a Feb. 2 meeting with top lawmakers responsible for overseeing trade policy, including Senate Finance Committee Chairman Orrin Hatch (R-Utah) and House Ways and Means Chairman Kevin Brady (R-Texas). The ranking Democrats--Sens. Ron Wyden (Ore.) and Richard Neal (Mass.)--on the two committees also participated in the meeting.
No notice period is required under NAFTA to amend the deal, but the agreement does require a six-month notice if a country desires to withdraw from the pact. Under trade promotion authority procedures, the president can start trade talks 90 days after formally notifying Congress. Trade promotion authority procedures guarantee a straight up or down vote by Congress on any deal reached with no amendments. Mexico Feb. 1 announced that it was kicking off a 90-day consultation period to develop objectives for the negotiations.
Trump praised Wilbur Ross, his selection to head the Commerce Department, saying Ross would be “representing us in negotiations” with “a lot of other great people.” The North American Free Trade Agreement with Canada and Mexico took effect in 1994. Trump said he didn’t care if “it’s a renovation of NAFTA or a brand-new NAFTA, but we do have to make it fair, and it’s very unfair to the American worker and very, very unfair to companies that do business in this country.”
Trump asked for input on what in NAFTA is or isn’t working for America as well as which areas should be the focus of modernization, Brady said. For an agreement such as NAFTA, which is almost a quarter of a century old, “there is a lot of modernization that needs to be done,” Brady said.“He is eager to get going” on NAFTA talks but also intent on following trade promotion authority consultations and time-tables, Brady said. The trade promotion authority statute establishes consultations procedures for the administration to follow.
Trump “didn’t talk about the structure of NAFTA going forward or who on his trade team would handle which issues” Brady said. The president is a businessman who will organize his trade team efficiently, he added. “It may well be different than in the past,” Brady said, pointing out that key players have yet to be confirmed.
The last Congress provided the president with stronger trade enforcement tools, Brady said. The Trump “team is [examining] the enforcement rules on intellectual property and currency” so that they can use those tools, Brady said.
Asked whether he had discussed other trade agreements, Brady said he encouraged Trump to look at every U.S. agreement to see what is working and what needs to be improved while keeping U.S. companies in “those regions in the game as we’re doing it.”
Trump “agrees that we need to buy American and we need to sell American and make these agreements more fair,” Brady said. He said speculation on whether the NAFTA rewrite would be submitted to Congress for a vote was “way premature.”
Trump pulled the U.S. out of the 12 member Trans-Pacific Partnership, which also included NAFTA partners Canada and Mexico. Brady, who was an advocate of the pan-Asian pact, said there were “serious flaws” with TPP as negotiated and that Trump and his team had said they were “serious about nation-to-nation, bilateral, one-on-one agreements.” TPP member Japan has been mentioned as a possible candidate for a bilateral.
A re-examination of NAFTA makes sense given that the pact is over two decades old, Hatch said in a statement after the meeting. “Ultimately major shifts in policy are decisions that should be made with the consultation of Congress which, under the Constitution, has authority over tariffs,” he stated.
Hatch told a Chamber of Commerce audience Feb. 1 that he had not taken a position on the House border adjustability tax proposal. Several questions surrounding border adjustability need answers including whether the proposal is consistent with U.S. international trade obligations, according to Hatch. He also questioned whether changes would be needed to ensure that specific industries aren’t unduly burdened. Without answers on these issues, Hatch said he couldn’t provide a definitive answer on the proposal.
Ranking House Ways and Means Democrat Richard Neil (Mass.) said in a statement that the public expects U.S. negotiators to insist that Mexico end the labor and environmental practices that have put the U.S. at a competitive disadvantage and resulted in lost jobs and reduced wages for American workers. All future trade agreements must include enforceable rules to address currency manipulation, as well as labor and environmental provisions, Neal said.
With assistance from Cheryl Bolen.
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