USTR Lighthizer To NAFTA Partners: Step Up Pace Or Lose Window Of Opportunity

United States Trade Representative Robert Lighthizer warned his Mexican and Canadian counterparts today (5 March) that if they don’t quickly pick up the pace of the North American Free Trade Agreement (NAFTA) renegotiations, they will face “headwinds” from elections in all three countries. And if they can’t progress, the US is prepared to proceed bilaterally.

The remarks came at the close of this week’s negotiations held in Mexico City. Lighthizer met with Mexican Economy Secretary Ildefonso Guajardo and Canadian Trade Minister Chrystia Freeland, and praised the hard work of staff in the negotiations.

But, he said: “In spite of this hard work, we have not made the progress that many had hoped in this round. We have closed out only three additional chapters: Good Regulatory Practices, Administration and Publication, and Sanitary and Phytosanitary Measures. We have also completed work on sectoral annexes related to chemicals and proprietary food formulas. And we are making substantial progress on Telecommunications and Technical Barriers to Trade. We have also agreed to include a chapter on energy.  These chapters are important and provide further evidence that all three countries want to upgrade and modernize NAFTA. But to complete NAFTA 2.0, we will need agreement on roughly 30 chapters. So far, after seven months we have completed just six. Now granted, these things tend to converge more towards the end of a negotiation.”

He cited two goals of the negotiation. First, he said, to update the “outdated” 1994 trade agreement, to include “new issues like digital trade, labor, and environment, intellectual property, and much more.” And second, to make NAFTA “rebalanced,” including “changing the agreement so that it no longer encourages outsourcing, developing rules of origin that will fairly treat our manufacturing sector and workers, and reshaping the rules of government procurement.”

Lighthizer cited upcoming elections in each country as potentially complicating the negotiations:

“Now our time is running very short.  On July 1, as everyone here knows, Mexico will choose a new president. That campaign as I understand it begins in earnest just next month. But Mexico is not the only NAFTA country in the midst of elections. Both Ontario and Quebec have elections scheduled later this year. Finally, the United States has mid-term elections coming up in November. All of this complicates our work. I fear that the longer we proceed, the more political headwinds we will feel.”

In the US, he said, “we must resolve our outstanding issues soon to maintain the possibility of having this measure be considered by the current Congress.”

If a tripartite agreement proves impossible, “we are prepared to move on a bilateral basis, if agreement can be made,” he added.

Despite these hurdles, he said, it will just require political will on the part of all three.