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White House Starts The Clock On NAFTA Renegotiations

19 Mai 2017

Starts 90-day clock. Negotiations start August 16.

Q. Why the 90-day countdown?

The timetable and the formal notification are requirements that must be met for any revamped trade deal to qualify for an up-or-down vote by Congress.

The time line to get a deal done is narrow too. In 1993, the Canadian lumber industry won a victory over their USA counterparts in a Chapter 19 decision on US barriers to imported lumber.

Lighthizer's letter repeats a common refrain: NAFTA is due for an upgrade because at 23 years old, it pre-dates a lot of developments in the USA economy.

In his letter to congressional leaders, Lighthizer said NAFTA needs modernization for provisions on digital trade, intellectual property rights, labor and environmental standards, regulatory practices, rules for state-owned enterprises and food safety standards.

The Trump administration also wants to change the dispute resolution mechanisms set up under the agreement.

Once word had surfaced that Trump was considering pulling out of NAFTA, Sonny Perdue, two days into his job as the president's agriculture secretary, hastened to the White House with a map showing areas that would be hurt most by a pullout, overlapped with many that voted for Trump. After a February meeting with Prime Minister Justin Trudeau, he talked about "tweaking" it. More recently, he has talked about subjecting it to a "massive" renegotiation.

A prominent critic of USA trade agreement calls the administration's plans "markedly vague".

The importance of ag exports to Canada and Mexico shouldn't be overlooked or taken for granted, says Chip Councell, chairman of the U.S. Grains Council and a Maryland farmer, in a written statement.

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Daniel Schwanen, vice president of research at the C.D. Howe Institute in Toronto, said the tone of the letter is very interesting. "Congress looks forward to working hand-in-hand with the Trump administration to achieve the best deal possible for American workers and our economy", Ryan said in a statement.

Q. Why start the clock running now?

Negotiated by President George H.W. Bush and signed into law by President Bill Clinton, NAFTA took effect on January 1, 1994. In 1992, USA presidential candidate Ross Perot famously predicted "a giant sucking sound" as American jobs migrated south across the border.

As a candidate, Trump defined his "America First" stance as a means to fight unfair foreign competition.

Ms Freeland said in a statement on Thursday that Canada remains "steadfastly committed to free trade in the North American region".

Freeland said it's premature to talk about NAFTA timelines, but she is heading to Mexico City next Tuesday, in part to discuss the trade accord with Mexican officials. "But there's just no track record (with the Trump administration) on how it will turn out", says John Weinand, a Hazen, N.D., farmer and president of the state Grain Growers Association. Talks with Canada and Mexico can begin after that.

"They will be setting out the process for their negotiations and the issues that will be subject to the negotiations", Dattu said. Exports and imports between the three countries have boomed since NAFTA became law in 1994.

Canada and Mexico both welcomed the US move to launch a NAFTA revamp.

Freeland said modernizing global trade agreements is good practice, and Canada will take a "very thoughtful and very strategic approach" in NAFTA talks.