White House Outlines Priorities For NAFTA Update
Last Monday, the Office of the U.S. Trade Representative (USTR) released the Trump administration’s objectives for NAFTA renegotiation.
The USTR said, “Through the renegotiation of NAFTA, the Trump administration will seek a much better agreement that reduces the U.S. trade deficit and is fair for all Americans by improving market access in Canada and Mexico for U.S. manufacturing, agriculture, and services.” Additionally, for the first time the USTR included trade deficit reduction as a specific objective for free trade agreement negotiations.
As a reminder, in written comments submitted to USTR on June 12, MSCI asked the Trump administration to upgrade, but not endanger, the trillion dollar-plus annual trading relationship that NAFTA has established between the United States, Canada, and Mexico. MSCI believes NAFTA has made U.S. manufacturers more competitive globally. It’s improved the United States’ domestic manufacturing base, with end products sold both in the United States and overseas, and has boosted U.S. job and economic growth, and growth in Canada and Mexico.
In a hearing last week, members of the U.S. House and Ways Committee trade subcommittee agreed that NAFTA has strengthened the U.S. economy.
MSCI also believes that NAFTA can be improved, however, for U.S. companies and their North American trading partners. For example, MSCI is pleased that the Trump administration’s negotiating objectives make it clear that the United States, Canada, and Mexico must improve the NAFTA dispute settlement process and ease border crossing regulations, wait times, and other restrictions. (Click here and here to read more about Canadian officials’ thoughts on changing the dispute resolution process.)
MSCI also is pleased that the Trump administration addressed currency manipulation in its objectives. While Canada and Mexico aren’t guilty of this practice, MSCI believes currency manipulation provisions should be the cornerstone of all free trade agreements. The objectives outlined by the USTR are just the beginning of the renegotiating process.
MSCI looks forward to working with the administration to hone them and to improve NAFTA for the benefit of all MSCI members.
Negotiations between the three NAFTA countries are set to begin in the middle of August.