EnThe U.S. Trade Representative has formally notified Congress that President Donald Trump intends to renegotiate NAFTA. The letter has few details, other than referring to “modernization” and calling for a broad range of extra standards. A specific reference to currency manipulation is not made, as discussed in Panjiva research of May 15. However, full details only have to be made available 30 days before negotiations start, i.e. in 60 days from today or mid-July.
One challenge will be timing. The initial letter states the U.S. wants to include new elements in 10 new areas ranging from intellectual property to environmental measures. One shortcut, to ensure the new NAFTA is ratified before the Mexican and U.S. elections in 2017, would be to utilize elements from the Trans-Pacific Partnership. That could leave more time to focus on the U.S. deficit in goods, where the Trump administration’s bigger concerns appear to lay.
Once negotiated, the Trade Priority and Accountability Act requires a notification to House Ways & Means of potential legal changes 180 days before signing the agreement. Also before signing the agreement a notice of intent to sign and details of the agreement have to be published. In order to have the current Mexican government sign the agreement, that would require negotiations to be completed by January 1 at the latest. That effectively gives “formal” negotiations of no more than 138 days.
Once signed the deal also faces: up to 105 days of ITC review; at least 30 days before the bill is submitted to the House the final legal text must be submitted; up to 90 days to pass the bill through the Senate. That would suggest a final Senate vote may not come, and the new rules entry into law, until February 2019. Clearly the ITC review could be accelerated, as could voting, with the U.S. midterm elections in November a complication that could keep the pressure on.
Source: Panjiva
