November 20, 2017

NAFTA: What Does The Trump Administration Want?

On Nov. 17, the Office of the U.S. Trade Representative issued an updated outline of its negotiating objectives for North American Free Trade Agreement (NAFTA) reauthorization. Among its stated objectives, the Trump administration said it wants to:

  • Improve the U.S. trade balance and reduce the trade deficit with the NAFTA countries.
  • Increase transparency in import and export licensing procedures.
  • Discipline import and export monopolies to prevent trade distortions.
  • Maintain existing reciprocal duty-free market access for industrial goods and strengthen disciplines to address non-tariff barriers that constrain U.S. exports to NAFTA countries.
  • Promote greater regulatory compatibility with respect to key goods sectors to reduce burdens associated with unnecessary differences in regulation.
  • Build on and set high standards for implementation of WTO agreements involving trade facilitation and customs valuation.
  • Increase transparency by ensuring that all customs laws, regulations, and procedures are published on the Internet as well as designating points of contact for questions from traders.
  • Update and strengthen the rules of origin, as necessary, to ensure that the benefits of NAFTA go to products genuinely made in the United States and North America.
  • Ensure that the rules of origin incentivize production in North America as well as specifically in the United States.
  • Establish origin procedures that streamline the certification and verification of rules of origin and that promote strong enforcement, including with respect to textiles.
  • Promote cooperation with NAFTA countries to prevent duty evasion, combat customs offenses, and ensure that goods that meet the rules of origin receive NAFTA benefits.
  • Obtain commitments that can facilitate market access and promote greater compatibility among U.S., Canadian, and Mexican regulations.
  • Preserve the ability of the United States to enforce rigorously its trade laws, including the antidumping, countervailing duty, and safeguard laws.
  • Through an appropriate mechanism, ensure that the NAFTA countries avoid manipulating exchange rates in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage.

The United States, Mexico, and Canada are currently in their fifth round of NAFTA negotiations. As a reminder, the Metals Service Center Institute outlined its NAFTA priorities in comments to the USTR this past June.

In other trade related news: last week the U.S. Commerce Department announced it will impose preliminary duties on imports of cold-drawn mechanical tubing from the People’s Republic of China, Germany, India, Italy, Korea, and Switzerland.