Trump administration writes Congress to officially trigger NAFTA renegotiation
90-day consultation period required under U.S. rules before talks with Canada, Mexico can begin
The Trump administration has written to Congress, officially triggering the 90-day consultation period required before renegotiation of the North American Free Trade Agreement with Canada and Mexico can begin.
Robert Lighthizer, who was sworn in Monday as the United States trade representative, wrote to Congressional leaders in both the House of Representatives and the Senate to officially give notice that President Donald Trump intends to initiate negotiations "regarding modernization" of NAFTA.
The letter says the Americans intend to initiate talks "as soon as practicable," but no earlier than 90 days from this notice, as required by current U.S. trade law. That means the earliest Canada's negotiators could be sitting down with their counterparts to discuss their opening positions would be Aug. 16.
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The letter did not, however, offer details about what the scope of these negotiations would include.
Lighthizer writes about the need to update chapters that "do not reflect modern standards," and mentions digital trade specifically as being only in its infancy when NAFTA was negotiated in the early 1990s.
Since the signing of NAFTA, we have seen our manufacturing industry decimated, factories shuttered, and countless workers left jobless. President Trump is going to change that.- U.S. Commerce Secretary Wilbur Ross
It mentions the need for new provisions to "address intellectual property rights, regulatory practices, state-owned enterprises, services, customs procedures, sanitary and phytosanitary measures, labour, environment and small and medium enterprises."
Lighthizer's department is not required to publish its specific negotiating objectives until 30 days before the start of talks, meaning precise details about what the U.S. wants to update or add in a reworking of the agreement may not be confirmed until July.
Before issuing Thursday's letter, Lighthizer held two days of meetings with congressional committees this week, as also required by U.S. trade rules.
Canada is ready to negotiate. We look forward to improving <a href="https://twitter.com/hashtag/NAFTA?src=hash">#NAFTA</a> for all three countries. <a href="https://t.co/NuD3O10rr1">https://t.co/NuD3O10rr1</a>—@AmbMacNaughton
In a statement, U.S. Commerce Secretary Wilbur Ross, who has emerged as a leading voice for the administration on trade issues, said Thursday's letter notifies "not just Congress, but all our trading partners, that free and fair trade is the new standard for U.S. trade deals.
"Since the signing of NAFTA, we have seen our manufacturing industry decimated, factories shuttered, and countless workers left jobless. President Trump is going to change that," Ross said.
Foreign Affairs Minister Chrystia Freeland emphasized Thursday that the three-month notice period is an anticipated part of the U.S. process, and Lighthizer gave Canada advance notice of his letter.
In particular, she mentioned the labour and environment chapters as areas that would benefit from modernization. "We can do constructive work together," she said, bringing them up to the 21st century standards Canadians expect.
No formal process is required to prepare for talks under Canadian law, but Freeland said the government has been consulting closely with "the provinces and territories, industry, unions, civil society, think-tanks, academics, Indigenous peoples, women, youth and the general public" to figure out Canada's interests.
"We are at an important juncture that offers us an opportunity to determine how we can best align NAFTA to new realities — and integrate progressive, free and fair approaches to trade and investment," she said.
Freeland said it was premature to speak about the timelines for the talks.
But all three countries know that elections next year — first the presidential vote in Mexico, and then midterms for the U.S. Congress — could be disruptive if progress isn't made before next spring.
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Steve Verheul, the chief negotiator for Canada's new trade agreement with the European Union, is expected to play a central role in the NAFTA talks.
"What Canada has said from Day 1 is that we are ready to come to the table at any time," Freeland told the House of Commons Wednesday evening.
"Something we can all agree on is Canada has the best trade negotiators in the world, and it will be a terrific team that goes to the table with us."
Freeland was the first foreign official Lighthizer met earlier this week.
"He said that was quite intentional," she said. "He wanted to show the importance of the key accords to Canada."
Trump has voiced a preference for bilateral trade talks as the best way for the U.S. to exact a good deal from a trading partner.
Freeland was asked about perceived efforts by the U.S. to pit Canada and Mexico against each other in the lead-up to these talks.
"NAFTA is a trilateral agreement, so the negotiations to modernize NAFTA need to be conducted in a trilateral fashion," she said.
Freeland will travel to Mexico next week to meet her counterparts and further prepare for negotiations.
Mexico's foreign minister was meeting with U.S. Secretary of State Rex Tillerson in Washington Thursday.
"The government of Mexico welcomes this development," Luis Videgaray told reporters. "We are prepared, we are ready to work together ... to make this trade agreement better."
"We understand that this is a 25-year-old agreement," he said. "The world has changed, we've learned a lot and we can make it better."
With files from Reuters