What NAFTA talks could mean for U.S. consumers and business

Q1905

A possible redo of a massive trade deal that could affect consumer prices and move jobs across the U.S. borders is set to begin.

The Trump administration formally told Congress Thursday that it intends to renegotiate the North American Free Trade Agreement with Canada and Mexico.

U.S. Trade Rep. Robert Lighthizer sent a letter to congressional leaders, starting 90 days of consultations with lawmakers over how to revamp the pact. Talks with Canada and Mexico can begin after that.

The two-page letter offered few details about what changes the administration would seek in the 23-year-old pact that President Trump has called “a disaster.” Lighthizer told reporters that any new deal should do a better job of protecting U.S. factory workers and should be updated to reflect new technologies.

Trump, once a harsh critic of NAFTA, has changed his mind and wants to renegotiate it with the U.S. partner nationsNAFTA, established in 1994 by the U.S., Canada and Mexico, created a free trade zone in North America by eliminating most tariffs and encouraging the unimpeded flow of products that many economists say has benefited its member nations. American farmers have mostly benefited from the reduction in trade barriers. But the pact encouraged American manufacturers to relocate some operations to Mexico to take advantage of cheaper labor there; so critics blame NAFTA for wiping out U.S. factory jobs.

Lighthizer, confirmed by the Senate last week, and Commerce secretary Wilbur Ross, will head the negotiating team.

“Since the signing of NAFTA, we have seen our manufacturing industry decimated, factories shuttered, and countless workers left jobless,” Ross said in a statement. “President Trump is going to change that.”

In his campaign, Trump railed against the dangers of running a high trade deficit. And his NAFTA negotiations will likely focus on measures that aim to cut the deficit, says Monica de Bolle, senior fellow at the Peterson Institute for International Economics.

[Read More]

Add a Comment

Your email address will not be published. Required fields are marked *