[CTC] Lighthizer’s pledge: A NAFTA both parties can support

[Arthur Stamoulis]

https://www.politicopro.com/agriculture/story/2017/06/lighthizers-pledge-a-nafta-both-parties-can-support-158645 <https://www.politicopro.com/agriculture/story/2017/06/lighthizers-pledge-a-nafta-both-parties-can-support-158645>
 
Lighthizer’s pledge: A NAFTA both parties can support
By MEGAN CASSELLA <https://www.politicopro.com/staff/megan-cassella> and DOUG PALMER <https://www.politicopro.com/staff/doug-palmer> 
06/21/2017 03:56 PM EDT
The Trump administration is well aware that trade agreements typically gain approval in the U.S. Congress with razor-thin margins. Still, it’s hoping to use the upcoming renegotiation of NAFTA as an opportunity to build a model trade agreement that both Democrats and Republicans can support, U.S. Trade Representative Robert Lighthizer said on Wednesday.

“I just want to assure you that I’m very focused on the fact that when you bring something back it has to pass, and that there’s almost no margin for error,” the top U.S. trade official said during a Senate Finance Committee hearing focused on the president’s trade agenda. “My hope, to be honest, is that we’ll end up with a model agreement that has a substantial number of Democrats as well as Republicans.”

Many Democrats have offered hope that if he and others in the administration pursue “the right kind of an agreement,” they would vote to approve it, Lighthizer added.

To that end, the veteran trade attorney spent a significant amount of time throughout the roughly two-hour hearing responding to questions about the upcoming talks, offering some insight on the goals of U.S. negotiators. He also pledged to push for higher standards in areas like labor and environmental regulations that Democrats strongly support.

Here’s POLITICO’s rundown of some of the NAFTA highlights from Wednesday’s hearing.

High-standard deal — or no deal at all

Lighthizer pledged during the beginning of the hearing that regardless of other countries’ intent to wrap up the negotiations as soon as possible, the United States would not be pushing for a quick, easy win at the expense of actual improvements and modifications.

In response to a line of questioning from Sen. Ron Wyden <https://cd.politicopro.com/member/51247> (Ore.), the panel’s top Democrat, Lighthizer said talks would conclude only once all three nations come to a good agreement, “one that is transformative."

“I am prepared to continue to negotiate until we get a high-standard agreement — unless there’s a total stalemate, in which case I’ll be back in front of this committee,” Lighthizer said. “I expect to get a high-standard agreement or we’re not going to come back with an agreement.”

Labor provisions

A major area in which the Democrats in particular have pushed for higher standards relates to labor requirements. Lighthizer agreed on Wednesday with the need to address the issue. He said that tightening such provisions would be an effective way to reduce the trade deficit and help prevent the offshoring of U.S. jobs.

“Would you agree that improving the labor provisions in NAFTA is critical … to the long-term success of the agreement and to ensure that American workers see more of the benefits of trade?” Sen. Bob Menendez <https://cd.politicopro.com/member/51523> (D-N.J.) asked.

“Yes, I absolutely believe that,” Lighthizer responded.

In response to questioning from Sen. Sherrod Brown <http://go.politicoemail.com/?qs=2b23215d21d457855d7614ab3ad1acaf01dc481be9f80a45e37fa5e83bfc7dbbee16916e8e5cc7a71214b9f054118de311e186f8ba038df5> (D-Ohio), Lighthizer also said he thought the current Mexican government was "amenable" to strengthening its labor standards as part of the revised NAFTA. But he did not commit to a request from Brown to push Mexico to raise its standards before negotiations begin later this summer.

"I think it's unlikely we'll have commitments" from Mexico to do that before the negotiations even begin in two months, Lighthizer told Brown. "But certainly, they will be one of the very first things that we talk to them about."

Currency provisions

Asked about the prospect of including a provision to prevent currency manipulation in NAFTA 2.0, Lighthizer responded that a debate was still continuing within the administration over how to proceed.

He said he was personally inclined to use the negotiating platform to work with two close trading partners to establish a sort of model currency provision that could be replicated in future trade deals. But he said he was still in discussions with Treasury Secretary Steven Mnuchin as well as members of Congress on both sides of the Capitol over whether they should do so.

Noting that currency manipulation has historically not been a problem with Canada and Mexico, “that would make it a great opportunity for three people to sit down and put together what is a model agreement,” Lighthizer told Sen. Debbie Stabenow <https://cd.politicopro.com/member/51236> (D-Mich.).

“But I’m sympathetic to your point, and I think this is an opportunity that we would not have with respect to some other countries when we might have a bilateral agreement,” he said.

Better access for agriculture

None of the changes made to NAFTA should adversely affect market access for agricultural exports, Lighthizer said. The goal is to boost access for those products in the renegotiation, he added.

“We’re going to do everything we can to improve upon the agricultural situation, particularly with respect to Mexico,” he said. “And we’re not going to tolerate anything that moves backward.”

Asked about the issue by a number of senators who represent agricultural-heavy states, Lighthizer assured that both Canada and Mexico were already aware that the U.S. would be pushing for greater access and would not allow for any additional restrictions.

“It’s very important that we not move backward on that and that we in fact look for openings for additional access,” Lighthizer told Sen. Chuck Grassley <https://cd.politicopro.com/member/51187> (R-Iowa).

Investor-state dispute settlement could remain in place

Lighthizer was also pressed on the investor-state dispute settlement provision, or ISDS, in NAFTA, a controversial mechanism for resolving investment disputes. Many Democrats would like to see it eliminated in an updated deal. While he said he could not assure the provision would be removed, Lighthizer did acknowledge having personal qualms about ISDS.

Many critics of NAFTA intensely dislike the provision, which creates a forum for companies to challenge government laws or regulation that they believe have unfairly damaged the value of their business investments. The critics say the rule impedes the rights of the government to regulate in the public interest.

"I really look forward to working with committee on that issue," Lighthizer told Brown. "It's a balancing act, really. Our investors have a right to have their property protected. On the other hand, there are, in my judgment at least, sovereignty issues. I'm always troubled by the fact that non-elected, non-Americans can make a decision that a United States law is invalid."

Lighthizer noted that Congress passed trade promotion authority legislation in 2015 instructing trade negotiators to "strengthen" the mechanism in trade agreements. That makes it difficult for him to commit to getting rid of the provision in NAFTA.
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