Trump administration confirms renegotiation of NAFTA

Trump administration confirms renegotiation of NAFTA

US Trade Representative Robert Lighthizer [official website] sent a letter [text] to Congress Thursday communicating the Trump administration’s intention to begin the process of re-negotiating the North American Free Trade Agreement (NAFTA) [text, PDF]. NAFTA is an international trade agreement between the US, Mexico and Canada, and has been in place since 1994. Lighthizer cited a lack of modernity in light of more recent digital trade developments as the reason for renegotiation. Lighthizer wrote:

In particular, we note that NAFTA was negotiated over 25 years ago, and while our economy and businesses have changed considerably over that period, NAFTA has not. Many chapters are outdated and do not reflect modern standards. For example, digital trade was in its infancy when NAFTA was enacted. In addition, and consistent with the negotiation objectives in the Trade Priorities and Accountability Act, our aim is that NAFTA be modernized.

US President Donald Trump had previously threatened to withdraw completely from the agreement.

The US’ place in international trade has been uncertain since Donald Trump took office. The letter from Lighthizer comes on the heels of an executive order directing the Commerce Department and Lighthizer to review all US trade agreements and the country’s membership in the World Trade Organization (WTO) to determine the cause of the US trade deficit [JURIST report]. The order called for a comprehensive review of whether previous free trade agreements and membership in the WTO have brought the benefits that were predicted. The order came just days after Trump announced he would not order a withdrawal from the NAFTA, but would rather renegotiate its terms with Canada and Mexico. Secretary of Commerce Wilbur Ross responded [press briefing] to the order, stating that an analysis of NAFTA will be a significant part of the required study.