CPA Statement on Trump Administration's New NAFTA Objectives

July 18, 2017

Washington ~ The Coalition for a Prosperous America (CPA) largely supports the Trump administration’s newly released NAFTA Objectives as an important change in the direction of America’s trade strategy.

“Never before has a president prioritized reduction of the US trade deficit in trade negotiations,” said Dan DiMicco, CPA Chairman. “The Trump administration’s NAFTA objectives for trade in goods importantly begins with this goal as the top priority. Voters elected President Trump because they believe in his vision for job creation and economic growth that will result from trade balance improvement in manufactured goods and agricultural products.”

The Office of the US Trade Representative's (USTR) “Summary of Objectives for the NAFTA Renegotiation” was released July 17, 2017. The document was released after hearing from Congress and over 140 witnesses during NAFTA Renegotiation hearings in June.

“The document rejects the false narrative that mere tariff cuts achieve free trade and that free trade is the ultimate goal,” said Michael Stumo, CEO of CPA. “Trade surplus countries have strategies to win against trade rival nations for the benefit of their workers and employers. Until now, the US had no strategy, resulting in our importing other countries' oversupply and their unemployment.”

The USTR’s NAFTA Objectives include improvements in the treatment and definition of state controlled enterprises which are often dramatically subsidized and used as an arm of foreign governmental policy. It will strengthen the rules of origin so non-NAFTA countries no longer get a free ride, while conceding nothing. The Objectives add important new goals such as eliminating Chapter 19 dispute settlement, raising wage levels in Mexico and preventing currency manipulation.

“The NAFTA Objectives could have been further improved by including country of origin labeling for meat as a goal,” continued Stumo. “Additionally, government procurement rules should be eliminated as interfering with US fiscal policy goals to buy American made products with taxpayer dollars to create jobs, build our infrastructure and protect national and economic security. Canada's and Mexico's border adjustable taxes should also be an issue.”

“If President Trump and Trade Representative Lighthizer cannot achieve a strong renegotiation result, we support ending NAFTA,” said Stumo. “The US has the market power, as the world’s largest consumer market, and the constitutional authority to set domestic rules for incoming goods and services. It is appropriate to think more seriously about how domestic laws and regulations can effectively condition market access upon tariff reciprocity, fair treatment, open investment and safe product standards elsewhere. Trade agreements may be too permanent, cumbersome and inflexible to respond to the future needs of the US.”

About CPA: The Coalition for a Prosperous America is the nation’s premier organization working on the intersection of trade, jobs, tax and economic growth. We represent the interests of 2.7 million households through our agricultural, manufacturing and labor members.

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