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Trade Groups, Lawmakers Urge Caution on Renegotiating NAFTA

Wednesday, May 17, 2017
Sandler, Travis & Rosenberg Trade Report

Trade associations and members of Congress were quick to call on U.S. Trade Representative Robert Lighthizer after he was sworn May 15 to take a cautious approach to renegotiating NAFTA. Lighthizer is reportedly meeting with congressional committees this week to discuss the Trump administration’s renegotiation priorities and is expected to soon send Congress a formal 90-day notification of the administration’s intent to launch talks with Canada and Mexico.

Four apparel, footwear, and retail trade associations wrote to Lighthizer to express their “very strong support” for the continuation of NAFTA, which Trump has threatened to withdraw from unless the U.S. secures better terms. The letter said NAFTA “directly supports hundreds of thousands” of jobs in these industries “and many millions more indirectly in important agricultural, service, logistics, manufacturing, and retail operations in all 50 states.” The agreement also gives U.S. companies and consumers access to more affordable products and inputs through its duty-free provisions.

The trade groups acknowledged that NAFTA should be “updated to reflect today’s business reality and better prepare for future trade patterns.” Issues that should be discussed, they said, include making customs enforcement smarter and more streamlined, facilitating regional value chains, providing for digital trade, and recognizing advancements in trusted trader programs. However, they added, any changes should “do no harm” to existing supply chains, provide for seamless integration with the existing agreement, and afford ample transition for companies to incorporate modifications to their practices and procedures.

In a separate letter, 18 senators praised NAFTA for yielding “tremendous growth” in U.S. trade with Mexico and Canada, integrating cross-border supply chains that benefit U.S. employers, and more than tripling U.S. exports of goods and services. They agreed that the 23-year-old agreement “would benefit from strengthening and modernization” but cautioned that efforts to abandon it or impose unnecessary restrictions on trade in North America “will have devastating economic consequences.”

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