{"id":101086,"date":"2017-08-16T02:19:43","date_gmt":"2017-08-16T00:19:43","guid":{"rendered":"http:\/\/www.arabtelegraph.com\/?p=101086"},"modified":"2017-08-16T02:19:43","modified_gmt":"2017-08-16T00:19:43","slug":"rhetoric-over-drive-to-ease-nafta-impact-on-workers-begins","status":"publish","type":"post","link":"https:\/\/www.arabtelegraph.com\/?p=101086","title":{"rendered":"Rhetoric over, drive to ease NAFTA impact on workers begins"},"content":{"rendered":"
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American farmers, for example, fear losing easy access to the Mexican market. Manufacturing companies have built supply chains that crisscross NAFTA borders; they worry about having investments jeopardized.<\/h4>\n

Of all the trade deals he lambasted on the campaign trail as threats to American workers, President Donald Trump reserved particular scorn for one: The North American Free Trade Agreement. The NAFTA agreement with Mexico and Canada was \u201cthe worst trade deal in history,\u201d candidate Trump declared. He accused NAFTA of having swollen America\u2019s trade deficit with Mexico, pulled factories south of the border and killed jobs across the United States.<\/p>\n

Trump promised to renegotiate the 23-year-old deal -or walk away from it. Now the time has come. Five days of talks aimed at overhauling NAFTA begin Wednesday in Washington, with negotiations to follow in Mexico and Canada. The United States has never before tried to overhaul a major trade agreement. So analysts aren\u2019t sure what will emerge from the talks.<\/p>\n

But it\u2019s clear that delivering on Trump\u2019s campaign promises will be difficult. A new version of NAFTA would require approval from a divided Congress. And even an improved NAFTA might not deliver the payoff Trump and his supporters are hoping for: The restoration of millions of lost manufacturing jobs. Economists and trade analysts do see opportunities to improve NAFTA, which eliminated most barriers on trade among the United States, Canada and Mexico. If nothing else, the pact could be updated to reflect the growth of the digital economy.<\/p>\n

But a technocratic rewrite is unlikely to satisfy Trump supporters and NAFTA critics who want a revamped agreement to shrink America\u2019s trade deficit and return jobs to the United States. A more aggressive approach _ demanding more made-in-America content for products that qualify for NAFTA\u2019s duty-free status, for example risks imperiling some benefits that Americans think the trade deal provided to them<\/p>\n

American farmers, for example, fear losing easy access to the Mexican market. Manufacturing companies have built supply chains that crisscross NAFTA borders; they worry about having investments jeopardized. And Canada and Mexico are sure to respond to any harsh American demands with their own. Plus, the clock is ticking. Next year brings a presidential election in Mexico and congressional elections in the United States. Forging a complex agreement will be even tougher if the political temperature is running hot.<\/p>\n

Last month, the Trump administration listed its objectives for the renegotiation. Some of them will meet fierce resistance from Canadian and Mexican negotiators. The administration has riled Canada, for example, by saying it wants to eliminate a dispute-resolution process established under NAFTA. That process lets Mexico and Canada appeal unfavorable rulings by U.S. courts and agencies in trade cases. They can appeal to five-person NAFTA panels, composed of two members from each county in the dispute and a fifth that usually alternates between them. The panels\u2019 rulings are binding.<\/p>\n

But the panels have a reputation for overturning U.S. trade decisions. That is especially so in cases involving Canadian softwood timber imports to the United States _ a long-standing source of conflict. America complains that Canada subsidizes its loggers, allowing them to dump cheap timber in the United States. \u201cWe lose lots of sales,\u201d says Jason Brochu, co-president of Pleasant River Lumber in Dover-Foxcroft, Maine. \u201cIt\u2019s not fair to have subsidized lumber come in unchecked.\u201d The ruling panels, he says, lack \u201ca proper dispute-resolution process.\u201d He\u2019d like to see them eliminated.<\/p>\n

That idea causes heartburn in Ottawa. Before they could rely on the panels, Canadians \u201cfelt they were not getting a fair shake\u201d in US courts and administrative proceedings, says Daniel Ujczo, a trade lawyer with Dickson Wright in Columbus, Ohio. \u201cThey see (the panels) as something they earned.\u201d The United States also wants more leeway to slap tariffs on imports that are found to hurt American industry. For now, NAFTA limits America\u2019s ability to use that power in cases involving Canada and Mexico. If America imposes taxes on their exports, would Canada and Mexico retaliate with their own tariffs?<\/p>\n

In another attempt to ensure that any revamped pact promotes US manufacturing, the Trump administration wants tougher rules requiring that goods that qualify for NAFTA benefits are actually made mostly inside the three-country free-trade bloc _ and don\u2019t include too many components from, say, China. Manufacturers, which have built supply chains that straddle NAFTA borders, worry that a NAFTA redo will disrupt their operations. Magna International, an auto supplier based in Aurora, Ontario, for instance, has 55 manufacturing plants in the United States, 50 in Canada and 30 in Mexico. Its products, such as car-seat components, can cross NAFTA borders five or six times. If it had to pay tariffs at each border crossing or produce more paperwork to prove where parts originated, Magna\u2019s costs would rise.<\/p>\n

If a NAFTA overhaul raises costs, \u201ceventually that cost is going to get to you _ you, the end consumer,\u201d says Scott Paradise, a Magna senior executive.<\/p>\n

American consumers have benefited, after all, from low-cost small cars built south of border.<\/p>\n

Renegotiating NAFTA is part of the administration\u2019s plan to restore a chunk of the 7 million factory jobs America has lost since US manufacturing employment peaked in 1979. NAFTA lured many manufacturers to Mexico to capitalize on cheaper labor.<\/p>\n

But Matthew Gold, a former US trade official who teaches at Fordham University\u2019s School of Law, says robots and competition from China have played a bigger role in wiping out American factory jobs.<\/p>\n

\u201cNothing in the NAFTA renegotiation will bring back that tens of thousands of manufacturing jobs that America lost to automation and to trade with China in the years since we entered into NAFTA,\u201d he says. \u201cWhile this renegotiation will improve NAFTA, it will be a great disappointment to those who expect the see its impact on their lives.\u201d<\/p>\n<\/div>\n<\/div>\n

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American farmers, for example, fear losing easy access to the Mexican market. Manufacturing companies have built supply chains that crisscross NAFTA borders; they worry about having investments jeopardized. 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