June 11, 2018

NAFTA Modernization Faces Tough Road; MSCI Members Encouraged To Contact Washington Lawmakers

As Connecting the Dots reported last month, Canadian, Mexican, and U.S. negotiators have many issues still to work on as they try to modernize the North American Free Trade Agreement, or NAFTA.

One issue is a particular sticking point, however: the United States’ demand that the trade deal automatically sunset after five years. Politico reports that demand might actually sink the deal. Antonio Ortiz-Mena, an economist who served for over eight years as the head of economic affairs at the Embassy of Mexico in the United States, told the Capitol Hill newspaper that he believes the United States cannot reach a deal with Canada and Mexico unless it drops that demand and its demand to make NAFTA’s dispute settlement system voluntary.

President Donald Trump seems unfazed by Canada and Mexico’s opposition to his demands. Last week, President Trump’s chief economic adviser Larry Kudlow said the president now prefers that the United States seek bilateral deals with both Canada and Mexico instead of reworking NAFTA. Canadian Prime Minister Justin Trudeau responded to Kudlow’s comments by saying that he is focused on keeping a deal between the three countries in place.

Meanwhile, U.S. House Speaker Paul Ryan (R-Wis.) reiterated that time is running out if the White House wants to get an updated NAFTA deal through Congress this year. At a press conference last week, Speaker Ryan said it would be up to the U.S. International Trade Commission (ITC) to decide if there was still time for Congress to vote on an agreement in December. (Under current law, the ITC is allowed 105 days to do an economic analysis after any trade deal is signed.)

The Metals Service Center Institute (MSCI) continues to encourage its members to discuss their opinions about NAFTA reauthorization with lawmakers. The Canadian government has established a webpage for stakeholders to submit their views. Companies also may submit comments by email (NAFTA-Consultations-ALENA@international.gc.ca) or by mail to: NAFTA Consultations, Global Affairs Canada, Trade Negotiations – North America (TNP), Lester B. Pearson Building, 125 Sussex Drive, Ottawa, ON K1A 0G2. MSCI members in the United States who are interested in weighing in on NAFTA deliberations should contact their representatives in the U.S. House and Senate to let them know how altering or eliminating NAFTA would affect their businesses, employees, and customers. Click here for contact information for every member of the House and here for senators.

MSCI’s comments to the Office of the U.S. Trade Representative regarding NAFTA reauthorization are here and a National Association of Manufacturers’ report outlining NAFTA impact on each U.S. state is available here.