NAFTA redo | TPA vote in 2018 | Ross on Trump policy
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Uncertainty is the best word to describe the current version of President Donald Trump’s trade policy.
Commerce Secretary Wilbur Ross gave some Trump trade policy ideas in a Financial Times opinion article. Ross laid out the Trump administration’s framework for changing trade policies. “The U.S. has the lowest trade barriers and the largest trade deficit in the world — $500 billion annually. This is why President Donald Trump has directed the U.S. Department of Commerce to report back within 90 days with a comprehensive analysis of the economic realities and the fine details of America’s trade patterns. Once Mr. Trump has that analysis, he will be able to take measured and rational action to correct any anomalies,” Ross wrote. The businessman then outlined the questions his department’s analysis will seek to answer.
Recent suggestions signal Trump’s NAFTA redo looks a lot like provisions in the pulled-back TPP. That will not disappoint some U.S. farm and commodity groups, especially the meat sector. Others ask why would one go through all this uncertainty without major changes.
Business in Canada, Mexico want trilateral NAFTA redo. Mexican and Canadian trade representatives are continuing to work together to ensure that any trade discussions with the U.S will be trilateral, even as the U.S. signals it may go the bilateral approach if coming negotiations falter with in keeping the pact multilateral.
On March 30, the U.S. Trade Representative’s office released a draft notice of its trade objectives for a renegotiation of the North America Free Trade Agreement (NAFTA), indicating ambivalence over whether it is planning to include both Canada and Mexico, noting that “it is premature to say what final form the negotiated outcome will take.”
Can coming TPA extension, new trade pacts get approved by this Congress? It’s too soon to say, but the increasing differences between the two major political parties signal big hurdles ahead for anything dealing with trade policy.
With House Democrats sensing some seat pickups in the 2018 elections, and a potential return to House leadership, an already wary party when it comes to voting for TPA and trade agreements will likely be more so this Congress, contacts advise.
Renewal of Trade Promotion Authority (TPA) in the summer of 2018 and midterm elections in the fall will serve as litmus tests on how well the talks to update the 1994 NAFTA. TPA provides for streamlined voting procedures for congressional approval trade agreements, such as up-or-down votes without amendments and simple majority thresholds. New NAFTA implementing legislation, if the negotiations with Canada and Mexico are successful, would have to be introduced under the current TPA (fast-track) before July 1, 2018, trade policy analysts note. President Donald Trump said in February that he intends to renegotiate NAFTA as quickly as allowed under TPA guidelines, but most observers think the Mexican government’s call to conclude the talks in 2017 is too optimistic.
As for the Senate, the coming likely changing of the rules to get Neil Gorsuch confirmed as President Trump’s Supreme Court justice nominee will add fuel to an already testy relationship between the two political parties and will make compromise even harder than it is currently.
Trump summit with Chinese leader this week. As for other trade policy issues ahead, a big one could get a major update this week when President Trump meets with Chinese President Xi Jinping in Florida Thursday and Friday.
Upshot: Trade policy developments face several high hurdles that will take executive and legislative leadership at all levels – a not so easy task in the present political environment.
NOTE: This column is copyrighted material; therefore reproduction or retransmission is prohibited under U.S. copyright laws. |
