Trade Compliance

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The Path Ahead for NAFTA Renegotiations

Posted May 05, 2017

Since President Trump said last week that the leaders of Mexico and Canada had convinced him not to withdraw from the North American Free Trade Agreement “at this time” and more than two weeks since he promised action on the NAFTA renegotiation process within that same period of time, the administration has apparently still not scheduled a meeting with the Senate Advisory Group on Negotiations to discuss its intentions with respect to the trade deal.

Under the Trade Promotion Authority (TPA) legislation enacted by Congress in 2015, the administration is required to consult with industry and lawmakers for 90 days before launching major trade talks, so they can establish U.S. negotiating priorities and objectives. Last month, however, Trump blasted the TPA and the statutory timelines it calls for, claiming that it had created frustrating roadblocks for his team.

“We have all sorts of rules and regulations that are horrendous,” Trump said at event in Wisconsin (the same one where he took aim at the Canadian dairy industry). “Like we wanted to start to negotiate with Mexico immediately and we have these provisions where you have to wait long periods of time. You have to notify Congress and after you notify Congress you have to get certified and then you can’t speak to them for 100 days. The whole thing is ridiculous.”

U.S. Commerce Secretary Wilbur Ross, the administration’s point man on NAFTA, has also repeatedly blamed Congress for inaction on the NAFTA file to date, complaining that lawmakers have been “frustratingly slow” handling the confirmation of U.S. Trade Representative nominee Robert Lighthizer, whose history as a lobbyist for foreign governments necessitated a congressional waiver that was leveraged by Democrats in exchange for a spending provision guaranteeing coal-miner pensions. “That’s been not helpful,” Ross wearily said early last month.

As things presently stand, Senate Majority Leader Mitch McConnell is reportedly not prepared to allow the Senate to consider the Lighthizer’s nomination until sometime later this month. Once that stumbling block has finally been cleared, the administration will then presumably move quickly to get the ball rolling on the NAFTA consultation process.

But that of course is only the initial step. Among other things, TPA requires the administration to provide summaries of its objectives and proposals in the NAFTA negotiations, to supply any member of Congress with access to negotiating texts, to consult frequently with bipartisan congressional advisory groups, and meet and consult with any interested member. Along with other reforms to more broadly engage the public, these measures are all intended to help ensure there is significant stakeholder input. And while these provisions increase the amount of transparency involved in the process, they also have the unfortunate effect, at least from Trump’s standpoint, of slowing things down considerably.

Given the administration has stated that it intends to make “big changes” to the agreement and yet also wants to complete negotiations before the end of the year in order to avoid conflicting with upcoming federal elections in Mexico, this puts incredible pressure on Ross and his team to wrap up the talks within a timeline that many experts consider unreasonably short for such a complicated undertaking with so many moving parts and a myriad of vested economic interests at stake.

To better understand the process, the Washington Post yesterday published a graphic that helpfully illustrates the various steps each country will have to take in its renegotiation of the trade pact.