As NAFTA Talks Start, Trade Deficit Arguments Prevail


In 2016 alone, trade between the U.S., Canada and Mexico was valued at $1.2 trillion.

President Trump made the trade a centerpiece of his presidential campaign and he has promised to stimulate the manufacturing sector, which is pulled by the United States out of the Trans Pacific Partnership trade pact. Analysts say most US industries support NAFTA because the deal has increased USA exports to Canada and Mexico.

The entering the talks with the goal of reforming problems perceived by Trump, such as trade deficits, rules of origin, currency manipulation and market-distorting practices.

During a news conference Wednesday, prior to the onset of talks, three trade representatives of each country met with reporters.

On August 14, 2017, Canadian Foreign Affairs Minister Chrystia Freeland outlined the core objectives of the Canadian government for the upcoming NAFTA renegotiations.

NAFTA renegotiation will be a major test of Trump's ability to meet his campaign promises to restore US manufacturing jobs.

"If we can't mobilize to make sure Congress understands they would pay a price for bringing back a NAFTA that continued to be awful for workers, continued to depress wages, continued to make us compete", he said, "Republicans will continue to turn a blind eye to this problem".

The top United States trade official said President Donald Trump, who has threatened to quit NAFTA, was not interested in "a mere tweaking of a few provisions and a couple of updated chapters", and the USA would seek "major improvement" of the agreement.

"The views of [President Donald Trump on NAFTA] which I completely share are well-known", he said. He is not interested in a mere tweaking of a few provisions of a couple of provisions and a couple of updated chapters. However, he also said the deal had "fundamentally failed many, many Americans and needs major improvement", adding that the deal had cost hundreds of thousands of jobs (an assertion that some analyses have disputed).

"The success is that NAFTA eliminated tariffs on USA beef exports to Canada and Mexico and allowed us to create $1 billion export markets to both Canada and Mexico with zero duties", National Cattlemen's Beef Association President Craig Uden told the industry publication Drovers.

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Despite the aggressive USA stance, negotiators from all three countries agree on the need to update the pact, which was signed before the internet was a force, including by adding a chapter on e-commerce and addressing the growing role of trade in services.

Canadian labour representatives say tougher standards would not only mean higher wages and better conditions for workers in Mexico and parts of the United States, but would also help make Canada - where wages are higher - more attractive to businesses because they would level the labour playing field.

But a new version of the 23-year-old trade agreement would require approval from a divided Congress, and even an improved version wouldn't restore millions of lost manufacturing jobs.

Earlier this year, dozens of Wisconsin dairy farms were almost forced out of business when they lost their milk buyer following a trade dispute with Canada.

Lighthizer highlighted the United States' trade deficits with both Canada and Mexico as examples of the failure of the trilateral trading pact over the course of the last two decades.

President Trump is one step closer to getting a new trade deal with Canada and Mexico. "That exchange was nearly reciprocal".

In a letter to Lighthizer in July, the National Retail Federation outlined what its members want to see out of the NAFTA renegotiations, emphasizing that rules of origin should not be made more burdensome than they already are.

Lighthizer didn't leave out Canada either. "Americans sent billions of dollars of corn and soybeans, and poultry across our borders to dinner tables throughout North America".

Lighthizer's rhetoric contrasted with the tone of his Mexican and Canadian counterparts, who emphasized the gains to all sides of the original deal. The Administration should also work to secure the acceptance of US automotive safety standards throughout North America to lock in rules that will promote exports of American-made autos to other markets.