[CTC] Ross: U.S. will focus on rules of origin, currency in NAFTA renegotiation

[Arthur Stamoulis]

Ross: U.S. will focus on rules of origin, currency in NAFTA renegotiation
By MEGAN CASSELLA <https://www.politicopro.com/staff/megan-cassella> Mar 3, 20178:44 AM EST
 
The United States will focus primarily on tightening rules of origin, aligning living standards between trading partners and smoothing currency exchanges in any talks to renegotiate NAFTA, Commerce Secretary Wilbur Ross said this morning in an interview on CNBC. <http://pdl.iphone.cnbc.com/VCPS/Y2017/M03D03/3000598135/6ED2-SB-RossWellBe-030317_L.mp4>
Rules of origin governing what portion of a good can come from countries outside of NAFTA and still be exempt from tariffs are “far too lenient,” Ross said. “I think those could be tightened up quite a bit. One of the things the TPP did is, in some ways it did, tighten them a bit, so there’s clearly some room there.”
The second priority, he said, will be to address living standards, noting that “the theory of NAFTA had been gradual convergence of living standards between Mexico and the United States. That really hasn’t happened on the Mexican side.
“The minimum wage for the peso has barely gone up in peso terms, and since the peso has gone down so severely in dollar terms, Mexican workers are really not at all better off than they had been some time ago.”
On currency, Ross attributed the recent drop in the peso’s value relative to the dollar to the “fear of what will happen with NAFTA,” but he added that “if we and the Mexicans make a very sensible trade agreement, that Mexican peso will recover quite a lot.”
In the deal itself, he also suggested including mechanisms to “making the peso-dollar exchange rate a bit smoother,” though he did not get more specific.
He emphasized that reopening the pact is first on the administration’s list of trade priorities.
“We think it makes sense to solidify your own neighborhood first,” he said.
 
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