NAFTA Negotiations, What the Three Countries Want

USTR and his Mexican and Canadian Counterparts, Courtesy Mexican Government

Nov 13, 2017 (San Diego) Our economy is tied to the Mexican and Canadian economies. It is a fact, that since the North American Free Trade Agreement (NAFTA), our region has become more dependent on the border economy we share with the municipalities in Baja California Norte. So it is important to ask, what is it that the three countries want in this renegotiation of the treaty? The three countries have said exactly what they want to achieve. It is no secret. 
Mexico wants the following:

  • Mexico seeks to improve the treaty, since in the view of Mexico it works for the three partners.
  • Mexico seeks an agreement where all three nations will continue to benefit. 
  • Mexico is convinced the treaty has been good for all signatories

The United States seeks the following:

  • A historic renegotiation of NAFTA to bring to fruition a campaign promise from President Donald Trump to reality.
  • Robert Lighthizer, US Trade Representative also said that the United States has lost 700,000 jobs to NAFTA and has a trade deficit with Mexico of $5,092 billion dollars  This is according to the US Census Bureau.
  • For many Americans NAFTA has been a failure.

Canada seeks the following:

  • Canada wants a trilateral agreement that will have better labor and environmental protections on all three countries.
  • They want a new treaty section that will protect first peoples. In Canada the rights of first people’s have become very important, and in Mexico as well. 
  • They also seek free and fair trade.

There is more, both Canada and Mexico are close allies in this negotiation and are presenting a united front. They seek to better conditions for both countries, If the United States decides to leave NAFTA, Mexico and Canada have agreed to continue the treaty without the United States, as a bilateral agreement. Benefits to both countries have been such that they will not cancel it. 

Mexico is also following a plan to diversity its commercial relations well beyond the United States, or North America. Both nations have also rejected American demands regarding milk products, vehicles, which imply national origin for parts, as well as article 19, which is the dispute resolution process, as well as the end of the treaty in five years. 

Specifically to auto parts, the United States seeks to elevate the US origin of vehicle parts in US sold vehicles from 62.5 percents to 85 percent. 

Mexico has stated that if they cannot achieve their goals, they are willing and able to leave negotiations and terminate NAFTA. This is not just Washington. 

For Canada, changes to the dispute resolution process are a non starter. 

While the United States has lost 700,000 jobs to trade, messing with the treaty will put 14 million jobs on the line. Many of them in the states that voted for Trump. This is according to the United States Chamber of Commerce. 

Ironically, the very manufacturing workers that helped propel Trump to his election victory would be heavily impacted by a NAFTA withdrawal. American farmers would be hit hard too.

Manufacturing companies depend heavily on shipping goods to other countries. Mexico and Canada are America’s second and third top trade partners, only behind China.

Since NAFTA became law in 1994, exports from the US to Canada and Mexico are up 280% over that time, while imports from the two countries have risen 313%, according to the US Chamber of Commerce.

If the US withdrew from the treaty, US companies will pay more to export goods to Mexico and Canada. These two markets are number two and three for American export goods. Imports would cost more as well, which will leave consumers paying higher prices, from avocados, to clothes. This economic malaise will expand to retail jobs, and could be the catalyst for a recession. 

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Categories: Calibaja, Dispatches from Mexico, Foreign Affairs, NAFTA

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