US Hopes To Launch NAFTA Talks In Just Over 90 Days: Ross

Economy

US Hopes To Launch NAFTA Talks In Just Over 90 Days: Ross

US Commerce Secretary Wilbur Ross has said that he hopes to launch formal talks to renegotiate the North American Free Trade Agreement (NAFTA) with Canada and Mexico in a little over three months, setting in motion a campaign promise made by President Donald Trump.

During his election campaign, Trump threatened to pull out of NAFTA, which he views as damaging to US workers, unless it was renegotiated to his liking and reduced the US trade deficit with Mexico.

Ross told reporters that "sometime in the next couple of weeks" he hopes to send a letter notifying Congress that the Trump administration intends to launch NAFTA negotiations in 90 days. That's what triggers the beginnings of the formal process itself," Ross said at a news conference with Mexican Economy Minister Ildefonso Guajardo.

Trade between the United States, Canada and Mexico has nearly quadrupled in goods since NAFTA took effect in 1994 to US$ 1.1 trillion last year, according to US Census Bureau data. The deal has accelerated the integration of the three economies, with parts supply chains and commodities now crisscrossing their borders. The 90-day period is required under the so-called "fast track" negotiating authority granted to the president by Congress. Fast-track allows only an up-or-down vote on trade deals, in order to streamline their approval and strengthen the US negotiating hand with partner countries. Congress granted fast-track to former President Barack Obama in 2015 when his administration was negotiating the now-defunct 12-country Trans-Pacific Partnership trade deal. Unless rescinded by lawmakers, the fast-track authority is scheduled to remain in effect until July 2021. Canadian Prime Minister Justin Trudeau said he was open to working with the Trump administration to revise NAFTA.

NAFTA could get several new chapters

"The Mexicans know, the Canadians know, everybody knows, times are different. We are going to have new trade relations with people. And they all know they're going to have to make concessions. The only question is what's the magnitude and what's the form of the concessions," said Ross.

Ross credited the president for preparing other countries to make concessions: "He's made my job easier by softening up the adverse parties. What could be better than going into a trade negotiation where the fellow on the other side knows he has to make concessions?" In February, U.S. President Donald Trump said he wanted to add a second "F" for "Fair" to the NAFTA acronym and that he would like to speed up talks to either renegotiate or replace the deal. Ross hopes to add entire new chapters to NAFTA, which currently has 22 chapters. He says the additions would reflect the modern digital economy. "Several chapters need to be added because of the digital economy & other things that have developed subsequently." He also hinted at substantive changes on auto parts - significant enough to require a phase-in period as car companies adjust their global supply chains.