In his campaign for the White House, Donald Trump stressed the dangers of consistently running a trade deficit. A USA Today article says the administration will likely focus on ways to cut into the trade deficit when renegotiation’s formally begin on the North American Free Trade Agreement.
One key point that Trump wants to revise is the “Rules of Origin.” The article says Trump believes too many parts used to assemble goods in NAFTA countries are supplied by non-NAFTA nations. When those goods are assembled, they come into the U.S. tax-free. Government contracts are another key topic for the administration. NAFTA requires the three governments to consider suppliers from other countries when it comes to infrastructure projects. That means the U.S. government must look at Mexican and Canadian suppliers as favorably as it does with American suppliers.
However, Trump wants the U.S. government to favor American suppliers and experts worry that could lead to retaliation by Mexico and Canada. American suppliers would have a much harder time getting contracts with Mexico and Canada. Dispute resolution is another item of concern. Current NAFTA rules say disputes should be heard by a panel of members from all three countries. Trump believes cases involving American businesses should be heard in American courts. He believes American businesses don’t always get a fair shake in dispute resolution.
The National Pork Producers Council is urging the president to make sure that tariffs remain at zero for pork traded throughout North America. Tariff-free access to Canada and Mexico last year were worth $799 million and $1.4 billion respectively. “Canada and Mexico are our top export markets,” says NPPC President Ken Maschoff, “and we absolutely must not have any trade disruptions.”
U.S. Wheat Associates and the National Association of Wheat Growers are also hoping for caution in the upcoming negotiations. While the groups welcome the chance to improve the agreement, they oppose changes that would limit benefits to wheat growers, especially in the Mexican food processing industries. American wheat imports began surging in Mexico after NAFTA, and Mexico is now the largest buyer of American wheat. “I cannot emphasize how important our Mexican customers are to U.S. wheat farmers,” says Jason Scott, USW chair.
The National Cattlemen’s Beef Association is also urging the administration not to jeopardize gains made in NAFTA. The National Farmers Union says the negotiations are a chance to make NAFTA work better for family farmers and ranchers across the country.