Fourth Round of NAFTA Talks Concludes; CalChamber Urges Letters to U.S. Senators

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The fourth round of talks to renegotiate and modernize the North American Free Trade Agreement (NAFTA) concluded in Arlington, Virginia on Tuesday, October 17.

The California Chamber of Commerce urges a quick and efficient process, and one that does not hinder ongoing trade and investment among the three NAFTA members, who must be kept united in the same end-goal of a successful renegotiation.

With the Mexican Presidential election and U.S. mid-term elections in 2018, it was originally hoped the negotiations would be concluded this year. Now, negotiators are looking to extend the remaining rounds through the first quarter of 2018.

In response to the pending conversation of withdrawal from the agreement, the business community states that such an action would result in higher tariffs, loss of jobs, and fewer consumer choices, along with increased prices.

Withdrawing from NAFTA also would make it much less likely that trading partners would want to participate in future trade agreements with the current administration. Meanwhile, other nations continue to pursue free trade agreements around the world that exclude the United States.

Fourth Round Conclusion

U.S. Trade Representative Robert Lighthizer welcomed back Canadian Foreign Affairs Minister Chrystia Freeland, and Mexican Secretary of the Economy Ildefonso Guajardo. During this negotiation round, which began on October 11, officials covered more than two dozen negotiation topics.

Building on the progress of NAFTA round three and the close of a chapter on small and medium-sized enterprises, the United States, Canada and Mexico have now closed the chapter on competition.

The new NAFTA competition chapter substantially updates the original NAFTA and goes beyond anything the United States has done in previous free trade agreements. The United States, Canada and Mexico have agreed to obligations providing increased procedural fairness in competition law enforcement so that parties are given a reasonable opportunity to defend their interests and ensured of certain rights and transparency under each nation’s competition laws.

Progress

Additionally, in the trilateral closing statement issued on Tuesday, negotiators acknowledged progress in several other negotiating groups, including customs and trade facilitation, digital trade, good regulatory practices, and certain sectoral annexes.

Parties have now put forward substantially all initial text proposals. New proposals have created challenges and ministers discussed the significant conceptual gaps among the parties. Ministers have called upon all negotiators to explore creative ways to bridge these gaps. To that end, the parties plan on having a longer intersessional period before the next negotiating round to assess all proposals. Mexico will host the fifth round of talks in Mexico City from November 17–21.

NAFTA partners are working hard to ensure the new agreement provides a solid framework to create jobs, economic growth and opportunity for the people of North America. Ministers have reaffirmed their mandate to chief negotiators to reach an agreement in a reasonable period. Negotiators will continue intersessional engagement, as well as intensive consultations with their respective stakeholders.

U.S. Closing Statement

In his closing statement, U.S. Trade Representative Lighthizer explained that the United States has two objectives for the renegotiations. First is to update the agreement “to reflect our modern economy. Obvious areas for modernization included intellectual property, digital trade, anticorruption, technical standards, financial services, and others.”

The second objective comes from the administration’s goal to rebalance the trade deficit. “All parties must understand this and be reasonable if there is any chance for these negotiations to be successful,” Lighthizer said. “I think we should all take the time between now and our next round to realistically assess what can be done to arrive at a balanced, modern agreement. And I am hopeful that if we do that, we’ll have a successful conclusion to this project in due course.”

Letter to President

CalChamber and a coalition of more than 300 state and local chambers from across the United States recently sent a letter to President Donald Trump, urging him to support efforts to modernize NAFTA.

NAFTA has been especially beneficial for America’s farmers and ranchers. Agricultural exports to Canada and Mexico have quadrupled from $8.9 billion in 1993 to $38 billion in 2016, generating big benefits for rural America.

In addition, Canada and Mexico are the top two markets in the world for U.S.-made manufactured goods, with purchases of nearly half a trillion dollars last year—a sum that tops the next 10 largest markets combined. Our North American neighbors are also booming markets for U.S. services exports.

In fact, the U.S. last year recorded a trade surplus of $11.9 billion with its NAFTA partners when manufactured goods and services are combined. Among the biggest beneficiaries of this commerce are America’s small and medium-sized businesses, 125,000 of which sell their goods and services to Mexico and Canada.

Action Needed

There will be a NAFTA Senate Lobbying Day on Tuesday, October 24 from 9 a.m. to 4 p.m. EDT organized by the business community, including the U.S. Chamber and the National Association of Manufacturers.

The CalChamber is encouraging members to contact U.S. Senators Dianne Feinstein and Kamala Harris in support of NAFTA to coincide with this effort.

Staff Contact: Susanne T. Stirling

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Susanne T. Stirling
About Susanne T. Stirling
Susanne T. Stirling, vice president, international affairs, has headed the CalChamber’s International Trade Department since 1982. She serves on the District Export Council (appointed by the U.S. Secretary of Commerce), the National Export Council Steering Committee, the U.S. Chamber of Commerce International Committee, and the Chile-California Council. She studied at the University of Copenhagen and holds a B.A. in international relations from the University of the Pacific. She earned an M.A. from the School of International Relations at the University of Southern California.