Mexico Will Not Accept Tariffs, Quotas in Renegotiated NAFTA

A Tale of Two Deficits

The U.S. trade gap with Mexico ballooned while holding steady with Canada

U.S. President Donald Trump's top trade negotiator came out of the gate sounding like he wants to fine-tune the North American Free Trade Agreement, not blow it up as some feared.

Under Trade Promotion Authority (TPA), which Congress approved in June 2015 and which covers trade agreements reached before July 1, 2018, the administration is required to give lawmakers 90-days' notice prior to entering talks on a trade deal that would require changes in USA law needed to comply with the agreement.

"Trump can not not renegotiate NAFTA in a way that's positive for USA manufacturing", Dimicco said. The legal battles can take years to resolve. Trade across the NAFTA countries serves both consumers and deeply connected supply chains, providing significant jobs not only in agriculture but in processing and distribution.

Trump early in his presidency ended America's participation in the TPP, which the Obama administration hadn't been able to persuade Congress to approve.

Nonpartisan congressional research concluded in 2015 that NAFTA had not caused an exodus of jobs, nor was it a major job creator.

"We believe today's action signals the beginning of a strong trade agenda for USA exporters".

The Mexican government says it "welcomes" the opportunity to renegotiate NAFTA. However, their tone on NAFTA was a little different. "Obviously, innovation and technology have been changing the way and even form of how products are made, and there's an opportunity to have certain products and innovations made with a lot more regional integration, without doing damage to current lines of production", Kalach, who heads the worldwide negotiating team of Mexico's Consejo Coordinador Empresarial business lobby, said by phone from Washington. "Mexico reaffirms its willingness to update NAFTA".

"There's only one team in the ice: We're not in the game yet", Herman said.

While Lighthizer received broad support for his confirmation in the Senate, cracks are already appearing over NAFTA.

Canadian Foreign Affairs Minister Chrystia Freeland said talks will provide an opportunity to "align NAFTA to new realities", while her Mexican counterpart Luis Videgaray said the three countries can reshape NAFTA "under a win-win framework".

USA lawmakers echoed a similar sentiment, expressing a desire to update NAFTA while recognizing its benefits.

A deal rice farmer Jackie Loewer said has been working well for local farmers. Brady leads the House Ways and Means Committee which will play a big role during negotiations. He added that he hopes to complete negotiations by the end of this year. The administration will need to rally lawmakers behind its negotiating position, a hard task in a polarized political environment.

During the campaign, Mr Trump vowed to withdraw from Nafta, saying it was a disaster for U.S. workers.

The time line to get a deal done is narrow too.

"In particular, we note that NAFTA was negotiated 25 years ago, and while our economy and businesses have changed considerably over that period, NAFTA has not", Lighthizer wrote. But Mexico has presidential elections in July 2018 and President Enrique Pena Nieto can't run due to term limits.

U.S. Trade Representative Robert Lighthizer informed Congress on May 18 of President Donald Trump's intent to initiate negotiations with Canada and Mexico "as soon as practicable", but no earlier than August 16, according to a news release.

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