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∑ NAFTA's Members Head Back to the Table
∑ Nebraska Farm Bureau Shares Concern NAFTA Talks Arenít Moving Fast Enough
NAFTA's Members Head Back to the Table
Stratfor | Worldview
Oct 10, 2017
∑ Over the next few rounds of negotiations on the North American Free Trade Agreement, Canada, Mexico and the United States will present more drafts of proposals to revise the deal than they have during previous discussions.
∑ The United States will propose the most contentious reforms, such as measures to increase the amount of U.S.-produced content in products imported from Mexico and Canada under NAFTA.
∑ The negotiations are unlikely to break down, despite the controversial issues the next round of talks will cover, though they probably will take awhile to reach their conclusion.
Canada, Mexico and the United States are drawing their battle lines for the fourth round of negotiations to revise the North American Free Trade Agreement. And the differences in their priorities for the talks, scheduled for Washington during Oct. 11-15, are becoming even clearer. The negotiations will reach their apex in the fourth round, but they will hit plenty of bumps along the way. As the signatory countries address the most difficult items on their agendas, they will run up against one another's imperatives, making compromise all the more challenging.
Getting in Gear
For U.S. President Donald Trump's administration, the main focus of the talks will be on reducing the United States' bilateral trade deficit with Mexico and boosting its exports to the rest of the bloc. The United States is expected to propose increasing regional content requirements, the rules that govern the percentage of a product's added value that must come from within NAFTA, from 62.5 percent to 85 percent to close the gap between its imports and exports. It is also expected to propose a new stipulation ó the first of its kind in a multilateral trade deal ó requiring that 50 percent of a good's content come from the United States to qualify for NAFTA benefits.
The automobile sector, which accounts for $54 billion of the $66 billion U.S. deficit, is the chief target of these proposals. But the vast majority of U.S.-based automotive companies will object to implementing the measures. The automotive supply chains in the United States, Canada and Mexico, after all, are so closely integrated that suddenly changing regional content requirements would cause major problems across the bloc. Furthermore, it's unclear whether higher content requirements will help the U.S. automotive sector in the long run. American-made cars and components aren't as competitively priced as they once were. Many firms may sooner forgo the perks of NAFTA and pay the modest 2.5 percent tariff the United States applies to many light-duty vehicles than take on the expense of complying with the revised rules.
And automakers won't be the only ones grumbling in the United States. Others already have criticized U.S. Trade Representative Robert Lighthizer for ignoring the procedure for raising issues to address in the negotiations. Though Lighthizer has the lead in the trade talks, his office must clear the U.S. position with other government agencies before presenting it to Mexico and Canada. Lighthizer has responded to the complaints that he has bypassed the proper channels by saying that the government eventually will come together on the various issues at stake. So far, however, some of Lighthizer's demands, such as proposals to institute a sunset clause or an automatic renegotiation trigger in NAFTA and to change its investor-state dispute settlement mechanism, are still points of contention in the United States.
On the Other Sides
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Nebraska Farm Bureau Shares Concern NAFTA Talks Arenít Moving Fast Enough
Radio 570 WNAX (SD)
Oct 10, 2017
Agriculture Secretary Sonny Perdue and House Ag Committee Chairman Mike Conaway say the negotiations on the North American Free Trade Agreement are not moving fast enough. Nebraska Farm Bureau National Affairs Coordinator Jordan Dux says his group wants negotiators to resolve the deal as soon as possible.
He says NAFTA regulatory updates are needed for technology, sanitary phytosanitary and biotechnology issues and possibly a resolution to dairy.
Dux is hoping more discussion will take place on agricultural issues during the next round of NAFTA talks this week...
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