[CTC] Business groups form coalition to urge protection of NAFTA, oppose some U.S. proposals

[Arthur Stamoulis]

INSIDE US TRADE

Business groups form coalition to urge protection of NAFTA, oppose some U.S. proposals

October 19, 2017 

Several U.S. business groups have formed an informal coalition to collectively lobby for the preservation of NAFTA and oppose a series of proposals put forward by the U.S. during the negotiations.
 
The U.S. Chamber of Commerce, the Coalition of Services Industries, the National Foreign Trade Council, the American Farm Bureau Federation and the U.S. Council for International Business are among those leading the effort.
 
The group met with about two-thirds of House members last week, according to U.S. Chamber of Commerce Senior Vice President for International Policy John Murphy. Sources said the group is expected to hold a lobbying day for the Senate on Oct. 24.
 
“We need to make our voices heard. We need for the administration to understand that [withdrawing from NAFTA] would be very costly,” Murphy said during a Tuesday panel at CSI's Global Services Summit.
 
CSI President Christine Bliss, at the same panel, said the coalition was formed to make sure the administration focuses on modernizing NAFTA rather than negotiating a “NAFTA minus.” But some U.S. proposals are inconsistent with that vision, she said.
 
For instance, a “one for one” proposal for government procurement advanced by the U.S. puts at risk a U.S. financial services sector that insures three out of four of Mexico's federal employees, she said. A withdrawal from NAFTA could have even more dire consequences because Mexico is not a member of the World Trade Organization's Government Procurement Agreement, therefore giving the U.S. no guaranteed procurement market access, Bliss said.
 
Murphy said a Canadian negotiator called the U.S. procurement proposal “the worst trade proposal in the history of trade proposals.”
Along with procurement, business leaders disparaged U.S. proposals to tighten NAFTA's auto rule of origin, implement a five-year sunset clause, and opt-in or out of the investor-state dispute settlement mechanism.
 
These so-called “poison pills” are holding hostage proposals that would serve to update the agreement, Murphy said. According to Murphy, a Canadian negotiator told him this week that Canada would be prepared to discuss certain U.S. offensive interests, but has taken them off the table because of they are beset by the U.S.' “backward proposals.” Murphy said these proposals have the business community “genuinely concerned” the U.S. is on a course to NAFTA withdrawal.
 
The poison pills, according to Murphy, have been rejected by the business community, were opposed by some during the interagency process, are opposed by members of Congress and are being rejected by Canada and Mexico.
 
“You can see why we're concerned that this leads to an impasse and some higher possibility of collapse of the negotiations,” he said.
 
A spokeswoman for the Office of the U.S. Trade Representative, responding to similar criticisms lobbed by Murphy, said earlier this month the administration expected pushback <https://insidetrade.com/node/160563> on proposals from “entrenched lobbyists” wary of “draining the swamp."
 
Former USTR Michael Froman this week criticized <https://insidetrade.com/node/160672> the business community for not being vocal enough about the dangers of withdrawing from NAFTA. -- Brett Fortnam(bfortnam at iwpnews.com <mailto:bfortnam at iwpnews.com>)
 
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