NAFTA: THE FIRST FORMALITY

"...I am pleased to notify the Congress that the President intends to initiate negotiations with Canada and Mexico regarding modernization of the North American Free Trade Agreement (NAFTA)."

Robert Lighthizer

May 18, 2017

This statement is in the first paragraph of the letter that the U.S. Trade Representative, Ambassador Robert Lighthizer, sent earlier today to the Speaker of the House, Paul Ryan. Similar letters were sent to four other leaders, namely:

Rep. Nancy Pelosi, Democratic Leader,
Rep. Kevin Brady, Chairman of the House Ways and Means Committee,
Sen. Orrin Hatch, President Pro Tempore of the Senate and
    Chairman of the Senate Finance Committee, and
Sen. Charles E. Schumer, Democratic Leader of the Senate.

With those letters, Ambassador Lighthizer kicked off the 90-period that forms the interval between the notification to Congress of the President's intention to enter into negotiations and the start of the negotiations themselves. While there are a number of questions still to be answered, the letter and the the press release on it made two things clear. One is that the initial goal is an upgrade of NAFTA, not two new bilateral agreements. Not only is that a reasonable inference from the phrase "modernization of the North American Free Trade Agreement," but Ambassador Lighthizer spelled it out later in the day during a conference call with reporters. "Our hope," he told them, "is that we can end up with the structure similar to what we have now," with the caveat that if that should prove impossible, "we"ll have to move in a different direction."

The other is timing. The USTR press release states that "Negotiations will begin no earlier than August 16, 2017," and it has been widely reported that the Administration hopes to conclude the negotiations by the end of this year.

It is going to be quite a year in trade, starting with NAFTA. With so much yet to come, it makes sense to let most would-be comments age for a while in cask of evolving events. Ever optimistic, we are encouraged somewhat by the goal of an ambitious time frame. That is because it suggests that the intention is to prune some here and there and plant a few new seeds but not to rip up the whole NAFTA garden.

NAFTA, FROM CARS TO CARROTS: The Role of NAFTA in Agriculture and Automobile Production

This session will be held at the National Press Club from 9 to 11 a.m. on Thursday, May 25, and will include experts from the two industries.  Click the title link for full details, including registration options.