[CTC] Sources: First NAFTA round to be held in Pittsburgh

[Arthur Stamoulis]

NSIDE US TRADE
 
Sources: First NAFTA round to be held in Rust Belt city of Pittsburgh

July 14, 2017 
Trade officials from the U.S., Mexico and Canada will meet in the the Rust Belt city of Pittsburgh on Aug. 16 to discuss the modernization of the North American Free Trade Agreement, sources told Inside U.S. Trade.

The agreement on the location of the first official negotiating round comes after some in the Trump administration pushed for it to be held in Washington, DC, sources said. Others expressed a preference for a city in the Rust Belt, where President Trump’s base has demanded a re-do of the deal and an overhaul of U.S. trade policy.

The Office of the U.S. Trade Representative, pursuant to the 2015 Trade Promotion Authority law, on July 17 is scheduled to publish the administration’s NAFTA negotiating objectives on its website “at least 30 calendar days before initiating negotiations.”

Section 105(a)(1)(D) of the TPA law requires that USTR publishes, after consulting with the Senate Finance and House Ways & Means committees, “a detailed and comprehensive summary of the specific objectives with respect to the negotiations, and a description of how the agreement, if successfully concluded, will further those objectives and benefit the United States.”

TPA also requires USTR to “regularly update” the objectives between the initial publication on July 17 and Aug. 16, when negotiations begin, as well as thereafter.

USTR officials are consulting on language of the comprehensive summary with the committees of jurisdiction. Sources said they have exchanged proposals on at least one draft of the objectives that is to be finalized and discussed over the weekend.

Although the U.S. to date has not officially designated its lead NAFTA negotiator, sources told Inside U.S. Trade that Assistant USTR for the Western Hemisphere John Melle will be responsible for the file. Melle has been with the agency since 1988 and has covered Mexico and Canada issues for decades.

Sources said apart from USTR Robert Lighthizer and his team, Commerce Secretary Wilbur Ross is likely to attend the first negotiating round in Pennsylvania. Trump stated before taking office that Ross would be his right hand on trade matters, and the Commerce secretary recently accompanied the president to the G20 summit in Germany, where trade was at the top of the agenda.

While it is unclear what level of involvement Ross will have in the August talks, some sources say anything but a marginal role for the Commerce secretary would displease the “big four” -- the leaders of the Senate Finance and House Ways & Means committees -- who have been more adamant in recent months about ensuring the administration follows TPA and that the USTR takes the lead.

“He can’t be the chief negotiator,” one source said. “Congress will make that clear.”

Language in TPA requires the Trump administration to ensure the negotiating objectives put forward for NAFTA comply with the law. Some sources believe the objectives to be published next week will be broad, but will adhere to TPA. One source also noted that Trump’s team is still developing policies on some issues, making it “hard for them to be as comprehensive” in the initial objectives.

Some observers believe holding the first round in a Rust Belt city will emphasize the political message that the administration is listening to those who the president believes have been hurt by U.S. trade deals. Others claim is it a strategic move in case the talks are met with protests on the ground, allowing the president, in response, to point to the location of the meeting in claiming solidarity with the working-class voters who make up so much of his base.

But other sources noted that because the administration, in its negotiating objectives, must adhere to the standards laid out in TPA -- including on many provisions opposed by unions and others -- satisfying those supporters will be difficult and protests will be unavoidable.

AFL-CIO President Richard Trumka, in a July 14 statement, called Monday’s scheduled release of the negotiating objectives the “make-or-break moment in NAFTA renegotiation plans,” emphasizing that NAFTA “needs to be completely rewritten” and noting that Trump has made “big promises” to fix the deal.

“Bold objectives that are beneficial to working families would include changes to labor and procurement rules, new rules to prevent currency misalignment and tax dodging and elimination of special legal rights and private courts for foreign investors,” Trumka said. “Small changes around the edges -- or the insertion of disastrous Trans-Pacific Partnership provisions -- are not acceptable and would be the ultimate in hypocrisy.” -- Jenny Leonard (jleonard at iwpnews.com <mailto:jleonard at iwpnews.com>)
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