NAFTA talks begin with US pledging major changes in trade pact

WASHINGTON — Negotiations to revise the North American Free Trade Agreement began Wednesday on shaky ground, as President Donald Trump’s top trade official insisted that there are fundamental problems with the 23-year-old pact while Canadian and Mexican officials lauded NAFTA’s substantial benefits to the region and emphasized the importance of protecting those gains.

The contrasting opening statements from the U.S. Trade Representative Robert Lighthizer and his counterparts from Canada and Mexico portend the tough bargaining ahead as the three parties, in Washington, began the first of what are expected to be several rounds of talks to renegotiate the landmark free-trade agreement.

Lighthizer acknowledged that many Americans, particularly in farming and those living in border communities, have benefited from NAFTA and that it was paramount to maintain those interests.

But Lighthizer said that “for countless Americans this agreement has failed.” He blamed NAFTA for the U.S. trade deficit with Mexico, particularly in the auto sector; the closure or relocation of domestic businesses; and the loss of at least 700,000 Americans jobs.

“I want to be clear,” Lighthizer said in a Washington hotel as trade delegations and journalists looked on. Neither Trump nor he is “interested in a mere tweaking of a few provisions and a couple of updated chapters. We feel that NAFTA has fundamentally failed many, many Americans and needs major improvement.”

Lighthizer briefly reiterated the administration’s trade objectives. They include changes to obtain more balanced trade; to make sure there is a higher percent of North American parts and “substantial” U.S. content in goods that qualify for duty-free trade; to ensure that the U.S. can impose trade sanctions under American laws; and to guard against currency manipulation and to have reciprocity in government procurement.

Seated next to Lighthizer was John Melle, an assistant USTR official who will be chief negotiator for the U.S. in the NAFTA talks, and the USTR’s general counsel, Stephen Vaughn.

At a separate table to their right and left were trade officials from Canada and Mexico. Christina Freeland, Canada’s Minister of Foreign Affairs, highlighted the broader cooperative relations among the three countries and the economic benefits that NAFTA have yielded to Canada as well as to the U.S.

Freeland said Canada does not see trade surpluses or deficits as the primary measure of whether bilateral trade relations are working — in contrast to Trump who has repeatedly talked about U.S. trade deficits as the key data point for bolstering American manufacturing and industrial jobs.

At any rate, she said that U.S.-Canada trade was fairly balanced, with the U.S. actually having a small surplus when services are taken into account. Canada’s objectives, she noted, include modernizing NAFTA and using the negotiations to cut red tape and improve standards on labor and the environment, which were only side agreements in the original pact.

“And of course we’re going to seek to uphold the existing elements in NAFTA that are key to our national interests,” she said. Although Freeland did not mention it, one of those top interests is to preserve a dispute-resolution mechanism in NAFTA that the Trump administration wants to eliminate. She summed up Canada’s aim as “bolstering what works and improving what can be made better.”

Mexico’s Secretary of Economy, Ildefonso Guajardo Villarreal, spoke more briefly and took a more defensive posture.

He emphasized the importance of the three countries taking a regional perspective in the negotiations, saying that the agreement was about “shaping a common vision of North America.”

“Mexico believes that NAFTA has been a strong success for all parties,” Guajardo said, noting that Lighthizer had told a congressional hearing recently that the objective was to “first of all, do no harm.”

“For a deal to be successful it has to work for all parties involved, otherwise it’s not a deal,” he said.

The first round of talks will run through Sunday. Negotiators are expected to continue talks next month in Mexico.

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