CalChamber Urges Congressional Action on NAFTA Agreement

The California Chamber of Commerce is urging Congress to approve a renegotiated North American Free Trade Agreement (NAFTA) quickly in the face of multiple deadlines for adoption of a modernized and rebalanced pact.

U.S. House Speaker Ryan has said Congress must receive the renegotiated NAFTA by May 17 to meet requirements of Trade Promotion Authority guidelines and the U.S. congressional calendar. U.S. Commerce Secretary Wilbur Ross has indicated the NAFTA negotiations must be completed by the end of May to have a 2018 congressional vote, and the July 1 Mexico election date looms.

According to U.S. Trade Representative Robert Lighthizer, for many weeks now, the United States, Mexico and Canada have engaged in intensive, continuous discussions to renegotiate NAFTA, building on the seven rounds of rigorous negotiations that have taken place since August 2017.

There is a sense of urgency because time is running short to get the NAFTA deal to Congress before the end of the legislative session. The renegotiated NAFTA agreement is operating under Trade Promotion Authority (formerly called fast track trade negotiating authority). This is the process by which Congress gives authority to the President and/or U.S. Trade Representative to enter into trade negotiations in order to lower U.S. export barriers.

Once legislation is submitted, under Trade Promotion Authority, both houses of Congress will vote “yes” or “no” on the agreement with no amendments, and do so within 90 session days (not to be confused with a treaty, which is “ratified” by the U.S. Senate).

During negotiations, however, there is a process for sufficient consultation with Congress.

“The negotiations have covered a large number of very complex issues, especially those objectives outlined by Congress as part of the bipartisan Trade Promotion Authority such as intellectual property, dairy and agriculture, de minimis levels, energy, labor and more,” said Lighthizer in a May 14 statement. “The current NAFTA is a seriously flawed trade deal, and the Trump administration is committed to getting the best possible trade agreement for all Americans. The United States is ready to continue working with Mexico and Canada to achieve needed breakthroughs on these objectives. Our teams will continue to be fully engaged.”

CalChamber Position

The 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 U.S. 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 489.5 million people with combined annual trade with the United States being around $1.139 trillion in 2017. In 2017, goods exports exceeded $525.46 billion while goods imports totaled nearly $614.02 billion.

The CalChamber’s longstanding 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.

Mexico and Canada are California’s largest and second largest export markets. A successful renegotiation of NAFTA will benefit the California economy and jobs.

Action Needed

CalChamber is asking members to contact their representatives in Congress and urge them to vote to support the modernized and rebalanced NAFTA agreements in time for a full vote on Congress this calendar year.

The CalChamber continues to support dispute settlement provisions in the agreement, but does not support the proposed five-year sunset clause, as a forced re-examination of the pact on such a short timeframe causes uncertainty for all parties.

Staff Contact: Susanne T. Stirling

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