NAFTA supporters urge caution as negotiations continue

With more salacious headlines crowding the front pages of the media, it’s tough to find news of NAFTA and the ongoing negotiations. But they are ongoing, as the three North American neighbors try to hash out a deal favorable to all.

According to a "NAFTA Watch" update from Benesch Law, the sixth round of talks seemed to be “less negative and more constructive” in tone than previous rounds, “despite failure to resolve critical issues,” said the report. “One positive step was the discussion of automobile rules-of-origin policies. Although without resolution, sources have stated that the parties engaged in a three-hour discussion about automobiles, which was more back-and-forth dialogue than previously conducted.”

Canada has suggested different ways to calculate and value components of a vehicle, which would assign more value to a vehicle’s technological components by including intellectual property and emerging technologies in the rules of origin, according to Benesch. “Robert Lighthizer has argued for the U.S. that such a proposition would have the opposite effect, leading to less regional content than vehicles currently have and fewer manufacturing jobs in the U.S., Canada, and Mexico,” said the update.

The Plastics Industry Association (PLASTICS), the Canadian Plastics Industry Association (CPIA) and the Associacion Nacional de Industrias del Plastico A.C. (ANIPAC) concluded a meeting in Montreal on Jan. 26, where the three major North American plastics trade associations called on trade regulators to provide the business community with some certainty regarding their efforts to strengthen NAFTA, according to a report released by PLASTICS.

“The North American plastics industry continues to speak with one voice when it comes to NAFTA,” said PLASTICS Executive Vice President Patty Long after the meeting. “While we believe renegotiation presents an opportunity to make NAFTA even stronger, a signal to the manufacturing community that progress is being made would calm the market’s nerves and give businesses the certainty they need to begin making new investments.”

A report from The Hill on Feb. 7, noted that both House and Senate lawmakers were urging President Trump and his top trade officials in Wednesday meetings to complete negotiations of an updated NAFTA. “Several members of the Senate Finance Committee, who met with Trump at the White House, expressed the importance of the 24-year-old NAFTA pact with Mexico and Canada to the U.S. economy, along with their concerns about the U.S.-China trading relationship,” said The Hill, adding that Senate Finance Committee Chairman Orrin Hatch (R-Utah) called the conversation “robust.”

“In our meeting, we underscored that preserving NAFTA is vital for the millions of Americans whose jobs depend on trade in North America, and that weakening the agreement would jeopardize American economic growth,” Hatch said, according to The Hill.

Benesch noted that “one matter of particular interest that has yet to find resolution is the America First approach asserted by the U.S. with respect to the trucking and logistics industries. The U.S. has demanded that Mexico agree to a provision that could block drivers from Mexico from making deliveries beyond certain commercial zones near the border. Mexico-domiciled carriers may operate in the U.S. today, but that was not without a long-fought series of negotiations dating back to 1994.”

The next round of negotiations will be held in Mexico City from Feb. 26 to March 6, which is the final scheduled round. Benesch’s report said that Robert Lighthizer “has stated that he hopes major breakthroughs will occur before those negotiations begin.”

“It’s been six months since the release of our industry’s priorities after our three organizations met in Mexico City last July,” said ANIPAC President Juan Antonio Hernandez. “We look forward to learning more about negotiators’ progress on an agreement that advances innovation in manufacturing across North America and encourages companies to grow their business and their workforce.”