U.S. Nafta Negotiator Takes Aim at Rivals -- Update
18 October 2017 - 1:04AM
Dow Jones News
By Jacob M. Schlesinger and William Mauldin
WASHINGTON -- President Donald Trump's top trade negotiator
exchanged public barbs Tuesday with his Mexican and Canadian
counterparts as well as U.S. businesses, magnifying large gaps over
the North American Free Trade Agreement and highlighting the
obstacles to keeping the pact alive.
"Frankly, I'm surprised and disappointed by the resistance to
change from our negotiating partners," U.S. Trade Representative
Robert Lighthizer told reporters after a week of talks on
renegotiating Nafta, as Mexican and Canadian ministers stood beside
him.
The resistance, countered Canadian Foreign Minister Chrystia
Freeland, was in response to a "troubling" vision of change that
would "turn back the clock on 23 years of predictability, openness,
and collaboration" and in some cases would violate global trading
rules.
Mexican Economy Minister Ildefonso Guajardo was more muted in
his criticism, but in a later press briefing talked openly about
the need for an alternative plan should the talks fall apart. Ms.
Freeland did the same.
Mr. Lighthizer also made clear that any successful negotiation,
in his view, will have to run roughshod over big U.S. business
groups like the U.S. Chamber of Commerce, which have traditionally
been the backbone of support for free-trade pacts. Mr. Lighthizer
escalated his war of words with the Chamber and other groups that
have campaigned to quash the Trump administration's proposals aimed
at redefining Nafta in a way that would weaken many of its
incentives and protections for creating a more integrated regional
economy.
"Business says 'we want to have the market decide, but we would
like to have political risk insurance paid for by the U.S.
government,'" Mr. Lighthizer said. "To me that's absurd. You're
either in the market or you're not in the market."
Business, he said, was trying to defend a government "thumb on
the scale" to protect their investments rather than defending free
markets.
Despite the harsh disagreements among the government
representatives, they all agreed to keep on talking to try to
salvage and modernize Nafta, setting a new round for late November
in Mexico, and agreeing to push the talks past their earlier
year-end deadline into the first quarter of 2018, according to a
joint statement from the three countries.
And while business groups, economists, and Mexican and Canadian
officials have been increasingly vocal about their worries Mr.
Trump would follow through on his repeated threats to pull out of
Nafta, Mr. Lighthizer went out of his way to play down that
prospect.
"There's not an active process going on right now" reviewing
termination, he said. "We don't really have a plan beyond trying to
get a good agreement."
The Mexican peso, which has been weighed down by investor
worries about Nafta's future, rose after the public statements from
the three ministers.
One proposal of Mr. Lighthizer that has drawn particular
business scorn would inject a sunset clause into Nafta, forcing it
to expire after five years unless the three countries took action
to renew it. Another would dilute a provision aimed at arbitrating
disputes between foreign investors and foreign governments, giving
multinationals confidence to operate in countries, like Mexico,
that don't offer developed-world legal protections.
Business groups say those changes would inject new uncertainty
and unpredictability into Nafta, making it harder for them to plan
around it.
Mr. Lighthizer said that was precisely the point. Nafta, he
said, has been "a great deal for businesses that want to take
advantage of a situation" encouraging them to invest in Mexico.
"I think it's possible take a little bit of the sugar away and
have them still say we're doing pretty well," he said.
A Chamber of Commerce spokeswoman declined to comment on Mr.
Lighthizer's latest remarks, pointing to a speech made last week by
Chamber President Thomas Donohue in Mexico City, where he branded
those and other ideas espoused by Mr. Lighthizer as "unnecessary
and unacceptable" and a threat to the region's "shared economic
vibrancy."
The war of words between Mr. Lighthizer, the U.S. trading
partners, and American big business came at the end of the fourth
round of a fast-moving negotiating process that was launched in
mid-August. This round was the most contentious as the Trump
administration finished laying out specific proposals defining how
it wants to reorient the pact. The objective Mr. Lighthizer said,
is to rebalance a pact that called "lopsided" in benefiting Mexico
and Canada -- an assessment both countries vehemently reject.
Among the other "unconventional proposals," as Ms. Freeland
described them, Mr. Lighthizer put forth a demand that half the
value of all cars produced in the continent have U.S. content to
qualify for Nafta tariff breaks, and another that would slash by
about 90% the amount of U.S. federal spending that would be open to
Mexican or Canadian bidding.
--Miguel Gonzalez and Paul Vieira contributed to this
article.
Write to Jacob M. Schlesinger at jacob.schlesinger@wsj.com and
William Mauldin at william.mauldin@wsj.com
(END) Dow Jones Newswires
October 17, 2017 19:49 ET (23:49 GMT)
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