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Administration Prefers Renegotiated NAFTA to Stay Trilateral, Senators Say

Thursday, May 18, 2017
Sandler, Travis & Rosenberg Trade Report

Commerce Secretary Wilbur Ross and new U.S. Trade Representative Robert Lighthizer indicated that the Trump administration is leaning toward keeping a renegotiated NAFTA as a trilateral agreement but will consider other options if necessary, according to several senators who met with the two officials May 16. The meeting was one of several steps the administration must take before it can send Congress a formal 90-day notice of its intent to launch talks with Canada and Mexico, which it is now expected to do during the week of May 22.

Ross said two weeks ago that the administration intends to reshape NAFTA into separate bilateral agreements “that match and are symmetrical.” After meeting with members of the Senate Finance Committee, however, Ross left open the possibility that an updated NAFTA could be a trilateral deal. Sen. Chuck Grassley, R-Iowa, said he came away with the impression that the administration will pursue a trilateral agreement “unless there’s problems that come up with that sort of machinery,” in which case “they would do it bilaterally.”

Ross has also said the administration prefers bilateral agreements because multilateral deals “take too long” to negotiate and thus leave participants more likely to settle for “any deal” rather than the best deal. However, Ross said after meeting with Senate Finance that revamping NAFTA will be “a long and complicated negotiation.”

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