[CTC] NAFTA notice today

Thu May 18 04:14:12 PDT 2017

POLITICO Pro 

Trump administration to send NAFTA notification letter Thursday

By Adam Behsudi, Megan Cassella and Doug Palmer
05/17/2017 11:40 PM EDT

The Trump administration is expected to send to Congress on Thursday morning a final letter notifying lawmakers that it intends to open trade talks with Canada and Mexico in an attempt to renegotiate NAFTA, according to an administration official and congressional aides. 

The letter would come just a day after U.S. Trade Representative Robert Lighthizer, who was sworn in Monday, concluded two days of meetings with the Senate Finance and House Ways and Means committees as well as separate special trade advisory groups comprised of lawmakers from both chambers. Lighthizer leaves for Vietnam today to attend a meeting of Asia-Pacific Economic Cooperation trade ministers.

Sending the letter triggers a 90-day consultation period that must conclude before negotiations can officially begin -- a process set out under the 2015 Trade Promotion Authority legislation that gives the White House the ability to fast-track passage of the deal in Congress. The 90-day period would end Aug. 16.

The administration is required to submit more detailed negotiating objectives 30 days prior to the start of the talks. An eight-page draft <http://go.politicoemail.com/?qs=e0e8dbe8e54efafc3780d8209f519c32eb51e0208e1b562bbc0924ce0e90862c29dcfe4486839bc43293dd9687ee94f48ea8f5982705f479ecfc67129b08dd8a> of the notification letter emerged in March, but congressional aides said that a final version circulated this week was only a page long, prompting some lawmakers to request more detail on some points.

Commerce Secretary Wilbur Ross, who also attended the Capitol Hill meetings, told reporters late Wednesday afternoon that they had “made a lot of progress in getting toward the 90-day letter,” but he said it was up to Lighthizer to announce when it would be sent.

INSIDE US TRADE
Sources: Administration to notify Congress on Thursday of NAFTA ‘modernization’ plans

May 17, 2017
The Trump administration on Thursday is expected to notify Congress of its intent to “modernize” the NAFTA agreement with Mexico and Canada by including “new provisions” in many “outdated” chapters, but unlike the first draft notice floated in March,the latest version <https://insidetrade.com/sites/insidetrade.com/files/documents/may2017/nafta.pdf> -- obtained by Inside U.S. Trade -- does not outline specific objectives.

Instead, the final notice cites broad goals the administration wants to tackle in a modernized NAFTA.

The notification is set to be delivered three days after U.S. Trade Representative Robert Lighthizer took office and the same day he heads to Vietnam for an Asia-Pacific Economic Cooperation trade ministers meeting this weekend.

The text of the final notice is unchanged from the second draft the administration sent to Congress late last week, sources said. That draft -- dated May 12 -- was faulted on Wednesday by Rep. Bill Pascrell (D-NJ), the ranking member of the House Ways & Means trade subcommittee, as being “much more vague <https://insidetrade.com/node/158769>” than the first.

Commerce Secretary Wilbur Ross, who this week joined Lighthizer in consultations with Senate and House committees and advisory groups -- required under Section 105(a)(1)(B) of the Trade Promotion Authority law before the notice can be sent -- toldInside U.S. Trade on May 17 he had “good meetings” with lawmakers.

“I think we made a lot of progress in getting toward the 90-day letter,” he said as he left his last meeting, with the House Advisory Group on Negotiations, or HAGON, on Wednesday. However, Ross sidestepped a question on when the letter would be sent.

The final notice underlines the role that consultations with Congress, in accordance with the TPA law, will play in formulating the specific objectives, which USTR has to publish on its website “at least 30 calendar days before initiating negotiations with a country.”

“Consistent with the negotiating objectives in the Trade Priorities and Accountability Act, our aim is that NAFTA be modernized to include new provisions to address intellectual property rights, regulatory practices, state-owned enterprises, services, customs procedures, sanitary and phytosanitary measures, labor, environment, and small and medium enterprises,” the notice states.

“Our specific objectives for this negotiation will comply with the specific objectives set forth by Congress in section 102 of the Trade Priorities and Accountability Act,” it continues.

Section 102 of TPA defines the U.S.’ “trade negotiating objectives,” including “to obtain more open, equitable, and reciprocal market access” and “the reduction or elimination of barriers and distortions that are directly related to trade and investment and that decrease market opportunities for United States exports or otherwise distort United States trade.”

The section specifies a range of objectives in trade in goods, services and agriculture, intellectual property, digital trade, labor and environment, state-owned enterprises, dispute settlement and enforcement, trade remedy laws, and other areas.

The first draft included detailed language on NAFTA’s Chapter 19, which addresses dispute settlement, as well as a proposed safeguard mechanism. It also said the administration was seeking “to level the playing field on tax treatment.” The final draft omits such specifics.

Senate Finance Committee Ranking Member Ron Wyden (D-OR) said on Tuesday that administration officials told him this week they were committed to making Chapter 19 “part of yesteryear <https://insidetrade.com/node/158765>.”

The administration’s notice says that “establishing effective implementation and aggressive enforcement of the commitments made by our trading partners under our trade agreements is vital to the success of those agreements and should be improved in the context of NAFTA.”

With respect to Canada, President Trump and Ross have repeatedly criticized the alleged dumping and subsidization of Canadian softwood lumber as well as Canadian dairy practices, which they claim have hurt U.S. dairy farmers.

Mexico and the U.S., meanwhile, are renegotiating sugar suspension agreements that U.S. petitioners claim have not been functioning properly. Both countries have until June 5 to find a solution; after that, the U.S. will re-impose antidumping and countervailing duties on imports of Mexican sugar. Ross told Inside U.S. Trade he is in “constant communication” with his Mexican counterpart, Economy Minister Ildefonso Guajardo Villarreal, on the issue.

“We have a few more days; I hope we’ll be able to get something negotiated before the deadline,” Ross said.

The first draft NAFTA notice <https://insidetrade.com/node/158124> was sent to lawmakers in late March after acting U.S. Trade Representative Stephen Vaughn, Ross and other administration officials met with the House Ways & Means Committee <https://insidetrade.com/node/158037> as well as the House Advisory Group on Negotiations.

Meetings with both groups were held again on May 17 -- because, sources said, the panels “demanded” to meet with Lighthizer after some senators had held up the NAFTA process by insisting it could proceed only with a Senate-confirmed USTR. Lighthizer was sworn into office on May 15 after being confirmed the week before.

The first draft notice initially was shared only with Senate Finance Committee Chairman Orrin Hatch (R-UT) and his counterpart in the House, Ways & Means Chairman Rep. Kevin Brady (R-TX), drawing the ire of Democrats on both panels <https://insidetrade.com/node/158110>.

Several House and Senate Democrats on May 17 told Inside U.S. Trade they pressed Lighthizer this week on his commitment to transparency in the negotiating process, as well as their hope for bipartisanship in making proposals and trading partners’ positions available to members from both sides of the aisle.

The administration’s May 12 draft does not state whether the administration plans to maintain NAFTA’s trilateral framework or negotiate two bilaterals, but instead says the president intends to “initiate negotiations with Canada and Mexico regarding modernization” of the agreement.

In comparison, the March draft said the administration was seeking to “initiate negotiations related to NAFTA and its architecture,” and added that it was “premature to say what final form the negotiated outcome will take.”

Lighthizer and Ross this week told the Senate and House panels the administration’s preference was a trilateral negotiation -- at least “initially,” according to Rep. Lloyd Doggett (D-TX) -- but left open the possibility that negotiations could resume bilaterally should talks with Mexico City and Ottawa prove unsuccessful.

The draft states the administration will begin talks with Mexico and Canada “as soon as practicable, but no earlier than 90 days from the date of this notice.”

The administration also states it is “committed to concluding these negotiations with timely and substantive results for U.S. consumers, businesses, farmers, ranchers, and workers, consistent with U.S. priorities and the negotiating objectives established by the Congress in statute.” -- Jenny Leonard (jleonard at iwpnews.com <mailto:jleonard at iwpnews.com>)

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