U.S. Trade Representative Robert Lighthizer on Monday said members of the North American Free Trade Agreement (NAFTA) “finally” started to discuss core issues of the deal and closed the anti-corruption chapter during the Montreal round, but divergent claims between him and his Canadian counterpart over which country had a bilateral goods trade deficit in 2016 revealed fundamental trade divisions continue between those parties...
During the round, Canada made a proposal to include modernized car components and research activities in calculations for automotive regional value content under NAFTA’s rules of origin.
Lighthizer criticized Canada’s proposal, though, saying it “may actually lead to less regional content than we have now, fewer jobs in the United States, Canada and likely Mexico.” He said it was the “opposite” of what the U.S. had intended in its proposal.
The U.S. has proposed an 85 percent North American value content requirement and a 50 percent U.S. content requirement for automobile trade between NAFTA parties.
Freeland said Canada came to the negotiating table in Montreal with creative, workable proposals to compromise with U.S. pitches, including the U.S.’s NAFTA auto proposal.
“Our job is not to cause the dismantling of the cross-border supply chains that have made our auto industry the envy of the world,” Freeland said. “Our job is not to weaken North American competitiveness, it is to strengthen it.”
Canada also tabled an alternative to an earlier U.S. proposal to enact a process to automatically sunset the agreement every five years unless it passes a review by the parties, Freeland said.
Additionally, Canada proposed an alternate measure to a U.S. proposal for an optional investor-state dispute settlement (ISDS) mechanism “that responds directly to U.S. concerns about being subject to ISDS,” she said.
Progress was made in the areas of sanitary/phytosanitary measures, customs and trade facilitation, technical barriers to trade, and telecommunications, Freeland said.
Customs and trade facilitation measures under consideration are “much more advanced” than provisions in the World Trade Organization Trade Facilitation Agreement, “and definitely much stronger than what we were achieving in TPP,” Mexican Economy Secretary Ildefonso Guajardo said during the press conference.
While Lighthizer characterized negotiations as “slow,” he stated that “some real headway” was made during the sixth round of talks, which ended Monday.
Freeland agreed that talks were “beginning to bear fruit,” while championing the current NAFTA, but said the 24-year-old deal should be modernized...
This was excerpted from 1 February 2018 edition of the American Shipper.