United States Trade Representative (USTR) Robert Lighthizer on Thursday sent to the leadership of the House and the Senate a statutorily-mandated notification letter to Congress (PDF), signaling President Donald Trump’s intention to initiate negotiations with Canada and Mexico regarding modernization of the North America Free Trade Agreement (NAFTA).
First negotiated 25 years ago, Trump says the agreement has grown outdated and unresponsive to the needs of American workers and businesses. While the USTR intends to initiate negotiations with Canada and Mexico “as soon as practicable”, the notification indicates that such negotiations will commence no earlier than 90 days from today.
USTR Lighthizer pledged that the Trump Administration will continue to consult closely with Congress in developing the President’s negotiating positions to ensure that they are consistent with Congressional priorities and objectives outlined in section 102 of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (“Trade Priorities and Accountability Act”). To that end, the notification states that the White House’s specific objectives for this negotiation will comply with the specific objectives set forth by Congress in section 102 of the Trade Priorities and Accountability Act.
Making the case that NAFTA does not reflect modern standards, the letter notes that digital trade was in its infancy when NAFTA was negotiated. The Notification indicates that the Administration’s aim is to modernize NAFTA by including “… new provisions to address intellectual property rights, regulatory practices, state-owned enterprises, services, customs procedures, sanitary and phytosanitary measures, labor, environment, and small and medium enterprises.” Asserting that “effective implementation” and “aggressive enforcement” of trading partners’ commitments under trade agreements is vital to the success of those agreements, in the forthcoming NAFTA negotiations, the USTR also seeks to improve both the implementation and enforcement of its trading partners’ commitments.
While both Canada and Mexico assert that NAFTA has been beneficial to all parties to the agreement, including the United States, both countries sought to downplay the significance of today’s notification to Congress, characterizing it simply as a procedural step that has long been anticipated. In statements in response to the Congressional notification of President Trump’s intention to enter into negotiations for a new agreement, each country acknowledged that, with the passage of time, technological developments have produced “new realities” that make updating the agreement necessary and appropriate.
In a statement, Canadian Foreign Minister Chrystia Freeland said:
“We are at an important juncture that offers us an opportunity to determine how we can best align NAFTA to new realities — and integrate progressive, free and fair approaches to trade and investment.”
Similarly, in a statement emphasizing the importance of “regional competitiveness”, the government of Mexico commented:
“We reaffirm our willingness to update the agreement in order to successfully address the challenges of the 21st century. Our countries deserve a modern instrument to regulate our trading and economic relationship.”