Highlight on NAFTA

Lighthizer trade hearing in Senate focuses on next steps for NAFTA

By: Chris Gillis
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   U.S. Trade Representative Robert E. Lighthizer told members of the Senate Finance Committee on Wednesday that the Trump administration remains on schedule to begin the process of renegotiating the North America Free Trade Agreement.
   Congress received notification from the White House May 18 that the NAFTA negotiations would commence, following a 90-day period of consultations with Capitol Hill and the public.
   The Office of the U.S. Trade Representative received more than 12,400 comments.
   “The public had such a strong interest in our work on NAFTA that the website crashed,” Lighthizer quipped in his testimony. “So we extended the comment period to ensure that everyone had the opportunity to provide input.”
   Lighthizer’s staff is currently reviewing the comments to formulate its position prior to the negotiations. It will also hold several days of public hearings, starting June 27. It’s expected that NAFTA negotiating rounds will begin as soon as Aug. 17.
   Asked by the Senate Finance Committee whether the deal will be completed before the end of the year, as suggested by President Trump, Lighthizer replied: “There is no deadline. My hope is that we can get it done by the end of the year, but there are a lot of people who think that is completely unrealistic."

There is no deadline. My hope is that we can get it done by the end of the year, but there are a lot of people who think that is completely unrealistic.

   There’s general agreement within the industry and on Capitol Hill that the now 23-year-old NAFTA is need of an upgrade.
   “The administration is doing the right thing,” said P. Welles Orr, senior international trade advisor to law firm Miller & Chevalier, in an interview.
   Orr, a 25-year veteran on trade matters in the White House and Congress, served as assistant U.S. trade representative on Clinton team that negotiated and finalized NAFTA through Congress in 1993-94.
   “It was never a perfect agreement,” he said.
   Orr believes that most of the sections of NAFTA that require updating, such as references to the handling of e-commerce, labor and environment, should be relatively easy to accomplish between the three countries.
   “If you look at what the Canadians and Mexicans have said, everyone wants to get this done sooner rather than later,” he said. “I think everyone sees this as doable.”
   However, Orr said it will be a challenge to conclude the revised NAFTA before the end of the year.
   “The administration really wants to chalk up a win," he said. "It would be the first of the biggest wins that [President Trump] could get.”
   Gary Shapiro, president and CEO, Consumer Technology Association (CTA), warned that during the NAFTA negotiations the administration “must resist protectionism and focus on modernizing our trade agreement models by including provisions addressing cross-border data flows, fair use and intermediary liability protections and promoting international harmonization of standards and regulations.”
   CTA estimates that 1.5 million American jobs rely on technology exports. These exports generated $379 billion, or 17 percent of total U.S. exports, in 2015.
   At the American Association of Importers and Exporters annual conference in Austin Thursday, Michael Flickinger, a customs advisor for the American Petroleum Institute, urged the administration "to use a scalpel, not a machete" when it comes to a redrawing of NAFTA.
   Flickinger said the agreement broadly works and needs to be tweaked, not ripped up. API, for instance, would like refinement of rules of origin in a revised NAFTA, but Flickinger said the agreement has helped his industry and others immeasurably.