The fourth round of talks to renegotiate and modernize the North American Free Trade Agreement (NAFTA) concluded in Arlington, Virginia on Tuesday.
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.
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.
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.”
CalChamber understands that the NAFTA was negotiated more than 25 years ago, and, while our economy and businesses have changed considerably over that period, NAFTA has not. We agree with the premise that the United States should seek to support higher-paying jobs in the United States and to grow the U.S. economy by improving U.S. opportunities under NAFTA.
The provisions of the NAFTA with Canada and Mexico have been beneficial for American industries, agricultural enterprises, farmers, ranchers, energy companies and automakers. Any renegotiation of NAFTA must recognize the gains achieved and ensure that U.S. trade with Canada and Mexico remains strong and without interruption.
The CalChamber actively supported the creation of the NAFTA among the United States, Canada and Mexico, comprising 484.3 million people with combined annual trade with the United States being around $1.069 trillion in 2016. In 2016, goods exports totaled over $496.919 billion while goods imports totaled nearly $572.217 billion.
The CalChamber’s long-standing support for NAFTA is based upon an assessment that it serves the employment, trading and environmental interests of California and the United States, as well as Canada and Mexico, and is beneficial to the business community and society as a whole. Since 1993, trade among the three NAFTA countries has nearly quadrupled.
CalChamber, Nationwide Chamber Coalition Call on President to Modernize NAFTA
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 the North American Free Trade Agreement (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.
The chambers are hopeful the administration will continue to insist that we must, first, “do no harm” in the NAFTA negotiations. The chambers agree we should move quickly to modernize this trilateral agreement and continue working with Congress in accordance with the Bipartisan Congressional Trade Priorities and Accountability Act of 2015.
The coalition looks forward to working closely with the President and his administration to grow the economy and create jobs through free and fair trade. To help facilitate that growth, the coalition urges the President to support America’s workers, farmers, ranchers, and businesses of all sizes by protecting and preserving the deep economic ties and benefits the United States continues to enjoy under NAFTA.
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