Trade Representative Robert Lighthizer yesterday (18 May) formally notified Congress that Trump intends to renegotiate the North American Free Trade Agreement (NAFTA), a trilateral free trade agreement between the US, Canada, and Mexico. He said the negotiations will seek to support higher-paying jobs in the US and grow the country's economy by improving opportunities to trade with Canada and Mexico.

"Today, President Trump fulfilled one of his key promises to the American people," said Ambassador Lighthizer. "For years, politicians have called for the renegotiation of this agreement, but President Trump is the first to follow through with that promise. USTR will now continue consultations with Congress and American stakeholders to create an agreement that advances the interests of America's workers, farmers, ranchers, and businesses.

In the letter to Congress, Lighthizer expressed the Trump Administration's "commitment to concluding the negotiations with timely and substantive results for US consumers, businesses, farmers, ranchers, and workers".

He added: "NAFTA was negotiated 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 Many chapters are outdated and do not reflect modern standards.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."

Lighthizer says the aim is for NAFTA to be modernised to include new provisions to address intellectual property rights, regulatory practices, state-owned enterprises, services, customs procedures, labour, environment, and small and medium enterprises.

The National Council of Textile Organizations (NCTO) welcome the decision.

"Let me be clear: NAFTA is vital to the prosperity of the US textile industry, and NCTO steadfastly supports continuing the agreement," said NCTO president and CEO Auggie Tantillo. "With that said, NAFTA can be improved to incentivise more textile and apparel jobs and production in the US, Canada, and Mexico.

 

"Eliminating loopholes that shift production to third-party countries like China and devoting more customs enforcement resources to stop illegal third-country transshipments are two changes that would make the agreement better," he added.

Lighthizer says the intention is to begin negotiations with Canada and Mexico "as soon as practicable", but no earlier than 90 days from the date of this notice.

Trump called the treaty a "disaster" throughout his election campaign and threatened to withdraw from the agreement if renegotiated terms weren't favourable enough.

Late last month he signed an executive order that required the Secretary of Commerce Wilbur Ross and the USTR, in consultation with several federal agencies, to "conduct comprehensive performance reviews" of all of the US free trade agreements and "renegotiate or terminate" policies that the Administration believes are harmful to the US.