White House proposes only small changes in NAFTA negotiations
The Trump administration outlined its renegotiating goals in a draft letter to Congress that advocates only small changes in the trade deal Trump called "terrible" on the campaign trail.
Press spokesman Sean Spicer said that the letter is "not an accurate assessment of where we are at this time." But the letter points out that the administration is constrained by law from some reforms that Trump highlighted during his campaign.
Critics are pointing out that the White House blueprint for changing NAFTA sounds a lot like the defunct Trans-Pacific Partnership deal negotiated by the Obama administration because it includes calls for U.S. trading partners to adhere to strict labor and environmental standards. At the same time, it doesn't address issues that Trump touted on the campaign trail, such as currency manipulation.
“For those who trusted Trump’s pledge to make NAFTA ‘much better’ for working people, it’s a punch in the face because the proposal describes TPP or any other same-old, same-old trade deal,” said Lori Wallach, director of Public Citizen’s Global Trade Watch and a leading critic of current trade policy.
The U.S. Trade Representative sent the draft to lawmakers this week. But White House press secretary Sean Spicer said Thursday that the document is "not a statement of administration policy."
"That is not an accurate assessment of where we are at this time," Spicer said at the daily White House press briefing. Spicer said the administration's policy toward NAFTA wouldn't fully materialize until Trump's pick for U.S. Trade Representative, Robert Lighthizer, is confirmed.
The draft, obtained by POLITICO on Wednesday, implicitly recognizes that Trump's hands are tied by laws requiring trade agreements to meet certain requirements to get speedy approval from Congress.
The Obama administration included those provisions in the TPP agreement that Trump abandoned right after he took office. They include enforceable labor and environment standards aimed at leveling competition in poorer countries, rules requiring that state-owned enterprises operate on commercial terms and data free flow requirements, among other things.
"It is ironic that they want to fix a ‘terrible’ agreement by including provisions from the TPP, one deal that the administration claims is even worse,” said Bill Reinsch, a distinguished fellow at the Stimson Center.
The letter also lays out a proposed NAFTA deal that retains concepts maligned by critics as counter to Trump’s populist message.
One example is a process allowing companies to seek damages from governments for policy decisions damaging to their bottom lines. The document suggests that it would be improved to minimize abuse, but labor groups have advocated that it be taken out of a revamped NAFTA.
Unfortunately, Trump can do little about labor laws in many countries that allow work rules that put US companies at a huge disadvantage as far as labor costs are concerned. Nor can the president force Mexico, for instance, to enforce its strict environmental laws. The fact that many companies in Mexico ignore environmental concerns in manufacturing means that production costs for American firms - closely watched by the EPA and environmental activists - give Mexican produced products a leg up.
These are perfectly legitimate concerns and were subjects for debate even when the NAFTA agreement was being considered in Congress. The Trump administration believes that if other countries refuse to play by the rules, they should be penalized.
But the process of bringing complaints against other nations who cheat is too long and too complicated to be of much good. Trump was right on all of these counts during the campaign. The problem is turning that rhetoric into reality.
Both Mexico and Canada have indicated a willingness to negotiate on certain points. But neither country is willing to accept the significant changes Trump is proposing. It then remains to be seen whether Trump will follow through on his threat to scuttle the deal entirely if he can't get what he wants.