U.S. Seeking a Trade Deficit Reduction in Early NAFTA Talks and Not Much Else

Matt Posky
by Matt Posky
u s seeking a trade deficit reduction in early nafta talks and not much else

Despite President Trump having initially framed his proposed NAFTA renegotiations as a hardline “America First” endeavor, the administration’s stance has soften significantly. In a recent summary of objectives, U.S. Trade Representative Robert Lighthizer highlighted fairness as the key issue throughout.

Absent were any mention of abandoning the deal if certain conditions were not met and the steep tariffs previously alluded to by the president. In fact, any mention of tariffs specifically targeted their reduction or elimination — for both imported and exported goods. There are, however, numerous examples that reaffirm the Trump administration’s earlier objectives and a handful of inclusions that should please domestic automakers.

The biggest of these is a streamlining of the regulatory practices between participating countries, something manufacturers have wanted for quite some time. While the White House has pressed for deregulation in the United States, automakers have more to gain though uniform regulatory practices between countries. One of the first items in the summary states the importance of promoting “greater regulatory compatibility with respect to key goods sectors to reduce burdens associated with unnecessary differences in regulation, including through regulatory cooperation where appropriate.”

With the automotive industry existing as one of the most heavily regulated industrial businesses on the planet, it isn’t difficult to surmise who Lighthizer is targeting.

Matt Blunt, president of the American Automotive Policy Council, a group representing U.S. automakers, told Reuters the regulatory streamlining would be a boon to automakers. He also said the summary’s focus on eliminating currency manipulation was a worthwhile endeavor.

A statement from Ford Motor Company echoed Blunt’s assertion: “Foreign currency manipulation is the 21st century trade barrier, and we strongly support the inclusion of this top-tier issue in the U.S. negotiating objectives for NAFTA.”

However, currency manipulation hasn’t been much of an issue between the North American partners — indicating that the NAFTA renegotiation is an attempt at being proactive, or will serve as a framework for whatever replaces the Trans Pacific Partnership Agreement.

Also included in the summary are numerous references to bringing labor provisions into the center of the agreement, in the hope that member countries legally adopt standards as recognized in the ILO Declaration. That includes the abolishment of all child labor and the right to organize without fear of repercussion. It also discusses holding participating countries accountable for providing fair minimum wages and worker safety without being explicit as to those guidelines.

While that’s all well and good, it does little to establish clear-cut boundaries or provide the sweeping changes that were initially promised. It does hint at minimizing the country’s trade deficit with Mexico — a double-edged sword, as it technically results in the U.S. having access to exceptionally affordable goods — but there’s nothing mirroring the president’s earlier tough talk.

On Monday, Trump promised to bolster U.S. manufacturing by reducing the $64 billion trade deficit with Mexico while showcasing products made in all 50 states. “No longer are we going to allow other countries to break the rules, to steal our jobs and drain our wealth,” Trump said from the White House’s South Lawn.

However, the summary makes very few strict demands — opting instead to “promote” fairness or “improve” industrial trade disparities. Depending on your politics, it may not have needed to either. But there is a clear distinction between the presidents stern rhetoric and what Lighthizer will be asking for.

If you’re interested, the full document is available on Office of the United States Trade Representative’s website for perusal.

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  • GoHuskers GoHuskers on Jul 19, 2017

    Yet another Trump lie.

  • Speedlaw Speedlaw on Jul 19, 2017

    H. Ross Perot called this one correctly. The Dems sold out their base with this one, which is why they listen to Donald, even though he could not care less like any real con man. The Union, democratic strongholds, main street USA, was gutted. I drive around all day in upstate NY, looking at small towns that used to have a factory and downtown, now they have a dollar store and rehab clinic. I wish I were exaggerating. My young adult world was way more fair overall than today....now get off my lawn !!!!

  • Jeff I like these 3rd generation Camaros much better than the 2nd generation. I might be in the minority but I always liked these Camaros. As for the S-10 pickups I had a second generation S-10 for almost 21 years very reliable so I might be in the minority here as well but when something gives me good service and costs not much to keep up then I like that vehicle.
  • Art_Vandelay The 80s ended with this car and Nevermind. Be sure to grab the Motley Crue cassette that is surely stuck in the cassette deck
  • FreedMike As I look at this car I feel my hair longing to become mulleted.
  • Tassos just scrap the hillbilly-redneck-high school junior mobileand put it out of its miseryBefore Tim steals it and pretends it is his 'used car of the day'
  • Dukeisduke Oh, and I have one of those Chinese Club knockoffs - I got one recently for my youngest daughter's 2012 Forte Koup, that was for six years my oldest daughter's ride. It got her through her senior year of high school, four years of undergrad, and her one-year Master's program. She was then gifted my mother-in-law's 2017 Elantra Limited. It has pushbutton start, so it's not susceptible to the Kia Boyz thing.The "Club" is still in the package - there's no way in hell she's gonna remember to put that thing on every time she parks it.