U.S. Stands Fast on Cutting Trade Deficit in New Nafta Wish List

  • USTR releases updated negotiating goals for trade deal
  • The trade partners are in fifth round of talks in Mexico City

No Clear Path for Autos in Nafta, Says Farnsworth

The Trump administration reiterated its goal to reduce the trade deficit with its Nafta partners in revised negotiating objectives, while adding in proposals it made during talks that were opposed by Canada and Mexico.

The U.S. wants reciprocal market access for manufactured goods as part of its push to improve its trade balance with Canada and Mexico, the office of the U.S. Trade Representative said Friday in updating its objectives for negotiating the North American Free Trade Agreement. The government must keep Congress informed of its plans under a law that gives the administration the authority to negotiate trade deals.

The U.S. had a $63 billion trade deficit in goods and services with Mexico last year, and a $7.7 billion surplus with Canada, according to U.S. government figures. The parties are meeting through Nov. 21 in Mexico City for the fifth round of talks, which began in August at the insistence of the Trump administration.

The new version of U.S. objectives puts into ink several demands already reported to have been made in recent rounds. That includes provisions to seek what had been considered effectively a sunset clause -- though the U.S. called it Friday “a mechanism for ensuring that the parties assess the benefits of the agreement on a periodic basis” and didn’t specify any proposal for automatic termination -- and to essentially make certain dispute panels non-binding.

The objectives reiterated the U.S. wants to eliminate chapter 19 of the agreement, which empowers bi-national panels of judges to review cases in which companies are accused of selling their products below fair value, or of receiving unfair subsidies.

Trade ‘Reciprocity’

The latest version also says the U.S. wants “reciprocity” in procurement with Canada and Mexico, essentially confirming a demand that would claw back access to the U.S. market.

It takes aim at Canadian dairy in particular, saying the U.S. wants to kill Canada’s tariffs on poultry, dairy and eggs, a measure that would effectively dismantle Canada’s system of supply management that would be fiercely opposed by the government.

It calls for the U.S. to keep “non-conforming” measures for long-haul trucking that could curtail Mexican access to the U.S., and includes several new demands on the chapter in investment and competition.

The objectives also insert language about increasing transparency in “import and export licensing procedures” and cracking down on “import and export monopolies” to prevent trade distortions, as top line goals for improving America’s goods trade-deficit.

USTR first published its negotiating goals on July 17 before official three-way talks began.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE