Trump Administration Takes Tough Line as NAFTA Talks Begin

Trump Administration Takes Tough Line as NAFTA Talks Begin

The first day of negotiations of the North American Free Trade Agreement got off to a bumpy start Wednesday as the Trump administration's first demand was to cut the trade deficit between the United States and Mexico.

Negotiations to revise the North American Free Trade Agreement began Wednesday with President Donald Trump's top trade official insisting that there are fundamental problems with the 23-year-old pact while Canadian and Mexican officials lauded NAFTA's benefits to the region and emphasized the importance of protecting those gains. "We feel that NAFTA has fundamentally failed many many Americans and needs major improvement", said Lighthizer.

The tri-lateral agreement removed most tariffs between the U.S., Canada and Mexico but the Trump administration says the deal only encouraged manufactures to move south of the border to take advantage of lower wage Mexican labor.

The foreign minister also dismissed Lighthizer's insistence that the US will seek "substantial" USA content requirements in addition to a higher regional content requirement to qualify for duty-free trade. One in 10 acres of farmland in the U.S.is used to service exports to Nafta neighbours.

Dan Ujczo, an international-trade attorney who advised members of Trump's trade team, said, "Most economists will tell you that trade deficits are not necessarily a bad thing". Lighthizer said that at least 700,000 Americans have lost their jobs because of the way NAFTA rerouted commerce.

In remarks Monday, Canadian Minister of Foreign Affairs Chrystia Freeland appeared to take a tough stance as she briefly outlined Canada's main goals - including adding new provisions to protect the environment and the rights of workers, women and indigenous people, as well as preserving a mechanism for settling disputes that some USA industries have opposed.

She noted that the US had an $8.1 billion trade surplus with Canada in 2016 and that a holistic view of trade includes services, an area where the USA dominates.

One of the US priorities is changing the auto production rules to require cars to include more American parts.

Mexico's secretary of economy, Ildefonso Guajardo Villarreal, spoke more briefly and took a more defensive posture. "Just as farmers have new tools and technology for food and fiber production, we believe that an updated NAFTA agreement can help the three nations become even stronger trading partners", AFBF President Zippy Duvall said.

"For a deal to be successful, it has to work for all parties involved, otherwise it's not a deal", Guajardo said.

Of the $68 billion in goods and services Alberta shipped south of the border past year, 64 per cent was crude oil and oil from bitumen, according to Industry Canada. Negotiators are expected to continue talks next month in Mexico.

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