The head of the biggest U.S. business lobby group said that by the middle of next year, a basic accord over reworking the North American Free Trade Agreement (NAFTA) would most likely be reached by the United States, Mexico and Canada.
Pledging to ditch it if he could not rework terms in favor of the United States, clouding the outlook for Mexico in particular, the future of the deal binding the three nations has been in doubt since Donald Trump won the U.S. presidency in November.
However, increasing aware ness of the need to get a new deal and move on without disrupting business were being felt by the business leaders and policymakers, and this was the belief of Thomas Donohue, president and chief executive officer of the U.S. Chamber of Commerce, who made this comment.
“We’re not going to be fooling around with this deal in 2018,” he said in an interview with Reuters on a visit to Mexico City where he will meet policymakers and make the case for free trade.
Jobs in the United States has indeed been lost due to Mexico’s growth as a manufacturing power since NAFTA took effect in 1994 and this the contention of Trump against the deal. However, it has benefited all three nations and helped American firms compete globally, defenders of the deal say.
The potential start of talks on NAFTA is now drifting into August as the U.S. government has yet to send a letter to the Congress that tell it that the government wants to launch the NAFTA negotiations in 90 days. This is the notice period that is required under the fast-track process.
Because of the economic damage it would do, neither Trump nor U.S. firms had an interest in dragging out the NAFTA talks and that step should follow in the next few weeks, Donohue said.
“(Trump) is looking at how to get things done,” he added. “And I can tell you that he wants to speed this thing up.”
“Yes. That’s my opinion. That’s my view. The bottom line is we need to move forward on this deal. It is critical to our economic and geopolitical well-being. Period,” Donohue said when asked if he thought a basic agreement on a reworked NAFTA would likely be in place by July 2018.
The next presidential election in July next year would be held by Mexico, a country that sends 80 percent of its exports to the United States.
And before that elections, attempts to wrap up the NAFTA talks would be made by Mexican President Enrique Pena Nieto’s government.
Trump caused dismay in Mexico with a pledge to build a southern border wall to keep out illegal immigrants during his own Presidential campaign and he had threatened to slap hefty tariffs on Mexican-made goods, including a 35 percent tax on cars.
Even though Trump again railed against NAFTA over the past week and he has returned to the issue of the wall, saying Mexico would pay for it “eventually,” ever since taking office, Trump’s tone has softened about the revoking of the deal.
Nevertheless, Donohue argued the prospect of punitive tariffs was receding and said that understanding was growing over the need for a deal that would accelerate, not reduce trade.
“In fact, we haven’t heard of that in a long time,” he said. “Because if a country were to put a 35 percent tariff on products moving into their country, the guys you’re trading with are going to do it the next morning.”
(Adapted from Reuters)