Trump administration issues formal call to renegotiate NAFTA


The scope of data privacy and security in the renegotiation of the North America Free Trade Agreement isn't clear, even though digital economy issues are briefly mentioned in May 18 letters from the Office of the U.S. Trade Representative alerting members of Congress to President Donald Trump's intention to revisit the trade pact.

The decision to start the 90-day clock to begin negotiations over the deal marks the third time that the President has made a contentious announcement ahead of discussions between the USA and Mexico. This gives Trump's administration, Congress, and businesses a 90 day consultation period before he sits down with Canada and Mexico.

Commerce Department Secretary Wilbur Ross said in a statement, "Since the signing of NAFTA, we have seen our manufacturing industry decimated, factories shuttered, and countless workers left jobless".

On Thursday, Mexican Foreign Secretary Luis Videgaray met with Secretary of State Rex Tillerson to discuss US-Mexico relations.

Regarding NAFTA's effect on Canada, Investopedia notes, "Canada experienced a more modest increase in trade with the USA than Mexico did as a result of NAFTA, at an inflation-adjusted 63.5 per cent (Canada-Mexico trade remains negligible)".

Lighthizer told reporters that any new deal should do a better job of protecting USA factory workers and should be updated to reflect new technologies.

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"The United States seeks to support higher-paying jobs in the United States and to grow the USA economy by improving U.S. opportunities under NAFTA, " Lighthizer wrote.

Canadian Foreign Affairs Minister Chrystia Freeland welcomed what was a widely anticipated development, promising to consult with Canadians on the best way forward.

Trump has pledged to use the Nafta talks to shrink goods trade deficits that stood at $63 billion (€56.5 billion) with Mexico and $11 billion with Canada past year, according to United States census bureau data.

"I think the sugar situation is like a preamble, a starting point for entering the Nafta negotiations", said Carlos Blackaller, head of Mexico's sugar cane growers' union which represents some 180,000 cane producers in 15 Mexican states. By integrating supply chains across North America, keeping a significant share of production in the US became an option for vehicle makers. It also said the Trump administration would seek to adjust the agreement's rules of origin, or how much of a product must be made in a NAFTA country.

The Obama administration attempted to address many of these deficiencies in the 2015 Trans-Pacific Partnership trade deal, which included Canada and Mexico, but Trump pulled out of TPP in one of his first official acts as president. He added that he hopes to complete negotiations by the end of 2017. His repeated complaints that bad trade deals destroy American jobs gained him support among working class voters, who helped lift him to the White House.

"In reality, NAFTA did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters". Since NAFTA was implemented, US agricultural exports to Canada and Mexico have tripled and quintupled, respectively. "Mexico reaffirms its willingness to update NAFTA".