NAFTA 2.0 Timeline Murky

August 15, 2017 12:56 PM

NAFTA 2.0 negotiations begin this week in Washington. The hoped-for conclusion will not be as quick as some want, nor take as long as some observers predict. But a long list of policy hurdles is evident.

Negotiators from America, Canada & Mexico begin talks in Washington Wednesday on revamping the North American Free Trade Agreement (NAFTA) — the 1994 trade pact that then-presidential candidate Donald Trump vowed to either rewrite or withdraw from. Talks will focus on revisiting current provisions of NAFTA and adding new chapters such as digital trade, which did not exist in the 1990s. The initial NAFTA helped integrate supply chains in the three countries and generates billions in cross-border trade. For example, Canada is the number two U.S. trading partner and Mexico is number three.

Timeline: take your pick. The three NAFTA partners hope to wrap up talks by early next year, ahead of Mexican and U.S. elections that could complicate ratification of a new agreement. The timeline goal appears optimistic, some say, as the original NAFTA took three years to complete. Others note a lot of groundwork has already been accomplished, and issues relative to the pulled-back Trans-Pacific Partnership (TPP) talks have brought complex topics under the policy microscope.

Canada, Mexico and other countries are inking new trade agreements, and this is adding more pressure in getting the NAFTA 2.0 talks completed and approved. Canada recently inked an accord with the European Union, while Mexico has reached 11 such agreements with 44 countries since NAFTA took effect more than two decades ago.

President Donald Trump called NAFTA one of the worst trade agreements. “NAFTA’s a horrible deal for the United States,” the president told the Wall Street Journal in a July 25 interview. “We’re in the midst of a renegotiation right now so we’ll see,” he added. “Maybe we’ll have to terminate it.”

That’s not so relative to a lot of the U.S. ag sector. U.S. pork and beef exports saw big gains in exports to Mexico since the initial NAFTA. “Hog production in the U.S. has been on an upward trajectory, and new plants indicate that we have a world-class healthy and growing pork industry. You have to think that exports had a bearing on these decisions being made,” said Nick Giordano, National Pork Producers Council Vice President & Counsel, Global Government Affairs.

The NAFTA region covers one-fourth of the world economy and, according to its proponents, made the hemisphere more competitive against rivals in Asia and Europe. Since the agreement took effect in 1994, trade and investment between the countries has soared. The auto industry and other manufacturers have created a North American market with supply chains stretching across all three countries.

Before and after NAFTA. The U.S. has gone from running a small goods surplus with Mexico before NAFTA of about $2 billion to a $63.2 billion deficit last year.


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Spell Check

Javier Carrera
Tampico, TX
10/22/2017 06:58 PM

  Ag business Consultant from Mexico


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