TRUMP PLANS TO CHANGE NAFTA COULD BE CONSIDERED AS “MODEST”

TRUMP PLANS TO CHANGE NAFTA COULD BE CONSIDERED AS “MODEST”

Despite all his campaign promises, where Trump assured that during his first days in the White House he would begin the renegotiation of the North American Free Trade Agreement (NAFTA) with Mexico and Canada, little has been done by the President and perhaps there is not much to be done in this regard.

As it was known, the government would seek modifications that for the most part could be considered as “modest”.

According to a draft NAFTA reform sent by the office of the federal government’s trade representative to Congress, “the United States will maintain some of the most controversial provisions” of the agreement.

HOW NAFTA WOULD CHANGE

The reform would maintain an arbitration panel that allows investors from all three nations to avoid local courts to settle civil claims, even though critics of those mechanisms say they affect national sovereignty.

The bill says it would seek to “improve procedures for resolving disputes,” instead of eliminating arbitration panels altogether.

The United States would also not use the NAFTA re-negotiations to deal with disputes over foreign currency policies or to achieve numerical targets around the bilateral trade deficit, as some of the actors in the trade sector had requested.

One of the most far-reaching changes is the proposal calling for a NAFTA nation to re-establish tariffs in the event of a flood of imports when they cause serious injury or threaten domestic industries.

The bill, which could still be revised, would be the basis for a negotiation that would begin 90 days after the Trump government notifies Congress of its intention to initiate formal re-negotiations.

It is not yet clear whether Canada and Mexico would agree to the changes the United States is seeking.

Trump also calls for the elimination of a chapter of NAFTA that allows Mexico, Canada or the United States to challenge trade remedy measures, such as anti-dumping quotas or countervailing subsidy quotas.

Another substantial change could arise in the government procurement section of the treaty. The government is currently considering offers from all three countries, while the draft suggests that purchases should give preference to domestic acquisitions.

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