The North American Free Trade Agreement has been making headlines since the U.S. election. President Donald Trump called the trade deal a ‘disaster’ and vowed to address the issues with the agreement. Now, the Trump administration took its first formal step to renegotiate NAFTA which could have an impact on more than $1.2 trillion in annual trade.
Corporate supply chains hang in the balance. NAFTA in its current form has remained the same for 23 years and no one is certain what a major revision could mean for their businesses. Manufacturers and businesses of all kinds have historically been on both sides of the fence, some don’t think the deal is fair for US manufacturers trading with Canada or Mexico, others see it as a necessity.
U.S. Trade Representative Robert Lighthizer gave Congress official notice today, 5/18/2017, that the federal government intends to renegotiate the trade deal with both Mexico and Canada. This action is required by law in order for the president to fast-track trade legislation through Congress. Negotiations are expected to take place as early as Aug. 16th as Lighthizer meets with lawmakers to discuss the position the U.S. will take in negotiations.
“The president’s leadership on trade will permanently reverse the dangerous trajectory of American trade,” Lighthizer stated. He continues to explain, “While our economy and businesses have changed considerably, NAFTA has not. Most chapters are clearly outdated and do not reflect the most recent standards in U.S. trade agreements.” https://bloom.bg/2q0MzRB
Modernization will be key in order to create a truly fair trade deal between the three nations. Lighthizer’s letter to congressional leaders discussed how the renegotiation of NAFTA needs to focus on digital trade, intellectual property rights, labor and environmental standards, rules for state-owned enterprises and food safety standards. Each one of these could have a profound impact on the future of North American trade.
Manufacturing Talk Radio will be keeping a close eye on these developments as they could directly affect the manufacturing industry. Be sure to keep checking back for the latest updates to keep your business informed.