NAFTA

From the United States Trade Representative's Office 
Monday, July 17, 2017 


U.S. Summary of Objectives for the NAFTA Renegotiation

The North American Free Trade Agreement (NAFTA) entered into force over 23 years ago, and since that time, the U.S. economy and global trading relationships have undergone substantial changes.The America that existed when NAFTA was signed is not the America that we see today. Continue reading...

NASCO's NAFTA Recommendations to USTR Lighthizer
Submitted June 2017  

June 2, 2017

The Honorable Robert Lighthizer
United States Trade Representative
600 17th Street, NW
Washington, DC 20508
USA

RE: NAFTA Negotiations

Dear Ambassador Lighthizer,

North American Strategy for Competitiveness, Inc. (NASCO) is pleased to welcome you to your role as United States Trade Representative, and introduce ourselves as the only tri-lateral, not-for-profit association with members located throughout the United States, Canada and Mexico. NASCO is truly a grass roots organization that does not represent a single business sector or industry, but a variety of sectors with both complementary and competing interests related to North American competitiveness. NASCO strives to prioritize the interests of our members, comprised of government, academia and industry, and to identify key priorities that will promote and enhance North America in three critical areas; supply chain and logistics, workforce and labor, and energy and the environment.

The relationship between the United States, Canada and Mexico is vital to a globally successful and competitive North America. The highly complex and integrated economies of all three North American partners has no doubt been recognized throughout the Trump administration. Having said that, the North American Free Trade Agreement is over twenty years old. Reflecting only briefly on the rate of change over the last twenty years, its stands to reason that NAFTA is due for an update. Consider the astonishing advances in technology over the last twenty years that have and continue to impact trade, employment and energy markets, such as 3D printing, smart phones, autonomous vehicles, social media, and eCommerce to name a few. While the supply chain, labor and energy markets have evolved tremendously, the language of NAFTA has not been updated or modernized to keep pace. It is in this spirit that NASCO supports an update to NAFTA, and encourages the administration to be thorough, swift, and specific, as the “unknown” is not inconsequential to business.

NAFTA Works – Our grassroots members are strongly convinced, and evidence supports, NAFTA has created jobs and saved industries in the United States and across North America from overseas competition. Fourteen million U.S. jobs depend on trade with Canada and Mexico! Since NAFTA, US manufacturing exports to Canada and Mexico have increased by 258%, and in 43 of the 50 states, Canada or Mexico is the 1st or 2nd largest export market. (Bipartisan Policy Center and U.S. Chamber of Commerce)
Optimize NAFTA – DO NO HARM - NAFTA is over 23 years old and should be updated, but this should be viewed as an opportunity to optimize North America’s competitiveness on the global stage. Disrupting the $1.3 trillion in annual trade across our North American borders or reverting to high tariffs and trade barriers that preceded NAFTA could put at risk the tens of millions of jobs that depend on North American trade. (U.S. Chamber of Commerce)

Trilateral NAFTA - The negotiations should be viewed as a trilateral collaboration. NAFTA partners do not compete with each other for jobs and investment, they collaborate fully in order to compete successfully in world markets against Asia, Europe, South America and the Middle East. The aim is not better deals with each other, but a better agreement that promotes North American prosperity in the global marketplace.
Make it Quick – The longer negotiations take, the more uncertainty in the market, the greater the erosion of confidence in our business community and the more advantage will be passed to our global competitors.

Amend it – Don’t end it! To avoid lost exports and lost jobs, NAFTA should be amended, not terminated. NAFTA already has an amendment process built in to ensure that it can be modified as needed. Work within that process while preserving the many parts of the agreement that are working well.

Do the “do”able now – don’t let NAFTA negotiations slow down the great work that is being done on border and customs facilitation, smart borders, regulatory reconciliation and talent development. This work significantly boosts US efforts to reduce the red tape facing businesses and job creators.

NASCO has been doing the “do”able since the inception of NAFTA over 20 years ago. Our priority is to facilitate fair and competitive business for North America. NASCO believes enhanced and secure supply chains facilitate trade. We are dedicated to promoting North American energy independence, security and opportunity. Investing in energy efficient technology and sectors will produce new jobs. Lastly, standardized training for certifiable manufacturing jobs will increase labor access for the manufacturing sector providing some vital relief. We have produced lasting relationships, initiatives – and results – in these key areas for decades, and have kept North Americans engaged and moving forward in critical areas for our continent’s global competitiveness.

As you begin to modernize the North American Free Trade Agreement, stakeholder consultation will be key to ensuring that the interests of not only the US, but North America as whole, are advanced, and that those opportunities for improvement are executed with precision to eliminate the potential for unintended consequences. In an effort to facilitate what will no doubt be an arduous task for the administration, NASCO is pleased to offer, for your consideration, common areas of priority identified by our members. While most are general in nature, NASCO is willing to take the time to engage at a much more detailed level in each of these areas. Additionally, we have included some specific NAFTA recommendations which we would be pleased to discuss in greater detail with you and your team.

Our members recognize that despite unique needs and issues, the North American partnership is built on the integration of our three countries and any sudden and substantial change to this relationship presents a very real threat to the balance that is North America’s competitiveness. NASCO members are standing by, ready, willing and able to work with you towards achieving the great challenge of evolving and adapting NAFTA to make it an agreement that facilitates and improves trade and interchange among and between our North American partners. We look forward to engaging with you in the coming days and months and the mutual successes that will be shared by working together with our Canadian and Mexican partners.

Sincerely,
Tiffany Melvin, President
North American Strategy for Competitiveness (NASCO)

Areas of Opportunity to Enhance North American Trade
NASCO Members have expertise in these areas and are willing to engage in more detail, if desired.

Facilitating Legitimate Commerce
• Ongoing support for the Trade Facilitation Agreement
• Facilitate the legitimate flow of goods by ongoing support, resources, IT infrastructure and priority for Trusted Traveler and Trusted Trade programs
• Exploring and examining ways to include goods regulated by Other Government Departments (USDA, CFIA, SSA / SENASICA) using Trusted Trader programs
• Segregation of Trusted Travelers and Trusted Freight from non-trusted entities to increase throughput of the known and low risk

Infrastructure Improvements
• Consideration of government-industry shared “Infrastructure Bank” that uses market driven approach to identify priorities for necessary infrastructure / upgrades along international borders and assume neutral coordination of transnational projects
• Capital increase / expanded role for the North American Development Bank – development / financing of pipelines, power plants in Mexico for North American energy security, and trade facilitation projects at border crossings.
• Prioritize improvements to existing infrastructure
• Improved sharing of existing facilities between customs agencies at small and remote port locations
• Strategic investment towards use of technology at border (ie. RFID, Facial recognition, autonomous vehicles)
• Conduct in depth review the “Presidential permitting process” with a goal to support expedited approval of infrastructure projects that are critical to national interests (pipelines, transmission lines, bridges, roads, rail, etc.

Energy Market Integration
• Establish North American energy agreement
• Facilitate development of key re-fueling infrastructure that enables greater industry usage of alternative fuels and renewable energy

Regulatory Cooperation
• Continue the efforts of the “Beyond the Border” Initiative that empowered a cooperative process for security and trade facilitation
• Ongoing and prioritized support for Regulatory Cooperation Council (RCC) and continued efforts to identify and reduce duplicative or redundant requirements
• Harmonized vehicle safety inspections between FMCSA, states, provinces
• Increased emphasis on harmonizing state to federal and provincial to federal requirements (ie. regulatory cooperation not just inter-agency but between sub-national jurisdictions)

Skilled Labor and Workforce Development
• Update list of qualifying NAFTA jobs – examine a “negative list” approach – all jobs are included unless explicitly excluded – to avoid the need for future updates
• Expanding North American training and credentials for professionals in North America
• Introduce common standards for training and certifications for North American manufacturing and logistics careers
• Increased flexibility for tri-lateral movement of skilled professionals throughout CA-US-MX
• Inclusion of “trade” in services – access to more services under NAFTA
• Examine restrictive cabotage rules in US where CA/MX are willing to reciprocate thus enabling the flexibility to maximize supply chain and labor efficiencies
• Exception to H2B Visa for returning workers

Automation
• Reduce paper at the border, reduce physical inspection, maximize use of Non-Intrusive Technology consistent with security concerns
• Maximize existing and available technology for expedited border crossings and enhanced demonstration of compliance; such as track and trade technology for Trusted Traders, autonomous vehicles for drayage
• Import/Export data sharing
• Ongoing support towards developing a North American Single Window concept for CA-MX-US to share information; ie. Supplied once by trade, shared thrice
• North American eManifest for seamless transport across borders
• Modernize regulatory process allowing for changes to regulation to be expedited commensurate with the changing needs of industry

Taxes and Fees
• Eliminate all current and future considerations for any sort of “Border Tax” between Canada, the United States and Mexico
• Elimination of cost prohibitive tax policy such as vehicle import tax from MX to US
• Assess current de minimis thresholds of each country to work toward continental harmonization
• Limit the ability to introduce random and arbitrary border crossing fees by both customs agencies and other departments

Reduce Non-Tariff Trade Barriers
• To enhance commerce, emphasize “Buy North American”; unify CA-US-MX; diffuse potential retaliatory action
• Promote strong and balanced Intellectual Property frameworks that facilitate digital trade

Specific NAFTA Considerations
• Expand list of duty free qualifying goods
• Certificates to be modernized/streamlined
• Creation of “How To” easy step by step guide to demystify and reduce subjectivity for certificates of origin; Remove ability to declare ambiguity such as “Unknown” and “Various”; facilitate NAFTA by Small and Medium Enterprise
• Require Importer of Record name and address and Business Number
• Simplify complex rules regarding “preferential treatment”
• Add provisions on the digital economy, data flows, and e-commerce.
• Data is fast and easily accessible, NAFTA certificates should not require paper
• Center of Excellence for NAFTA certificates as trade resource; available 24/7