No cutoff to finish NAFTA talks as U.S. hunts for best deal
Ottawa –President Donald Trump’s point person on trade says the administration’s top priority is locking down the best deal possible for the U.S. in the upcoming NAFTA renegotiation – and therefore it has no deadline to complete the talks.
Trade Representative Robert Lighthizer told the Senate finance committee Wednesday that while he wants to move as quickly as possible, sealing a ævery high-standardæ agreement is of far greater importance.
Lighthizer said his pursuit of quality over speed during the renegotiation of the 1993 North American Free Trade Agreement means he has set no deadline – not even an artificial one.
His remarks come as the administration faces political and corporate pressure to wrap up NAFTA talks with Canada and Mexico as soon as possible.
“There are people that have said we ought to try to get it done by the end of the year – that’s a very, very quick time frame,” Lighthizer said during his appearance in Washington, where he fielded questions about Trump’s trade agenda.
“We’re certainly not going to have a bad agreement to save time… My hope is that we can get it done by the end of the year, but there are a lot of people who think that’s completely unrealistic.”
During the hearing, Lighthizer acknowledged he’s heard concerns that the uncertainty surrounding NAFTA’s renegotiation has already had a negative impact on sales for some U.S. businesses, including farmers.
The Mexican and U.S. governments have said they want to conclude NAFTA negotiations by the first quarter of 2018.
If not, there are concerns the talks could be at risk of colliding with Mexico’s presidential election. Andres Manuel Lopez Obrador, the current front-runner in the polls, is a populist, left-wing NAFTA critic.
In his testimony, without specifically naming – that the timing of its vote does indeed support the argument the three countries should move swiftly.
“There are reasons related to other people’s electoral systems that might make that beneficial, but from my point of view – I don’t have any deadline,” he said.
“If we find ourselves in a total stalemate where we can’t make any progress then we’ll, in consultation with the (Senate finance) committee, decide on what next steps should be.”
Lighthizer said the Trump administration intends to move very quickly on launching NAFTA talks, which can begin as soon as Aug. 16, right after the conclusion of a 90-day consultation period in the U.S.
He noted the U.S. is still discussing the specific start date with its partners.
The next steps in the U.S. consultation process include public hearings scheduled for June 27-29 and the release of a detailed summary of NAFTA negotiating objectives on July 17.
Lawrence MacAulay, Canada’s agriculture minister, indicated Wednesday that Ottawa was waiting for the Americans to “set the table” for the NAFTA negotiations.
MacAulay sounded cautiously upbeat about the talks following his first meeting with his U.S. and Mexican counterparts. Canada will continue to defend its supply management system, which shelters the country’s dairy industry, he added.
But MacAulay offered no specifics, nor would he divulge any details about how Canada would proceed on dealing with the key issue of agriculture during bargaining.
In the U.S. capital Wednesday, much of the discussion at Lighthizer’s hearing centred on NAFTA, including several items expected to figure prominently during talks.
One “high-priority” issue for the U.S. will be seeking stronger intellectual-property protection across the board within NAFTA, so that it covers patents, copyrights and trademarks, Lighthizer said.
The current agreement, he added, is somewhat deficient in this area and the U.S has issues with both Canada and Mexico when it comes to the protection of its intellectual property.
Lighthizer also said the U.S. would push for Canada and Mexico to increase their duty-free levels, known as “de minimis,” which would liberalize cross-border online shopping.
One senator noted that Canada has one of the lowest de-minimis allowances in the world for online duty-free shopping. Canadian consumers can purchase $20 worth of goods online from retailers like Amazon and eBay before duties kick in, compared to an $800 threshold in the U.S.
In another area, U.S. officials – including Treasury Secretary Steve Mnuchin and several committee members – are debating whether to press for a provision in NAFTA on currency manipulation, even though the issue is “generally not a problem” with respect to Canada and Mexico, Lighthizer said.
He added that its inclusion in a renegotiated NAFTA would provide a model for future trade deals between the U.S. and other countries.
Lighthizer also said the U.S. intends to push for ways to rebalance – but not remove – the investor-state dispute settlement mechanism already within NAFTA. The current tool allows companies to sue governments over regulations that lower their profits.