Just a year after President Donald Trump discussed during his campaign that he would blow up NAFTA, he will soon notify Congress his intention to renegotiate the two-decade old agreement, according to a draft letter now circulating in Washing-ton.
“I am pleased to notify Congress that the President intends to initiate negotiations related to the North American Free Trade Agreement (NAFTA) and its architecture,” said the eight-page letter signed by Acting U.S. Trade Rep. Stephen P. Vaughn.
“We will be consulting closely with Congress in developing our negotiating positions to ensure that they are consistent with Congressional priorities and objectives,” the draft letter says.
During his campaign for president, Trump called NAFTA the worst trade deal “ever.” He eventually softened his tone and is now looking to renegotiate the pact that governs trade between the United States, Mexico and Canada.
While critics have said that the trade pact has resulted in massive job loss in the United States, local experts have credited NAFTA with an unprecedented economic growth spurt in the Rio Grande Valley.
“My district goes from The Valley up to Laredo and it relies heavily on NAFTA,” U.S. Rep. Henry Cuellar, D-Laredo, said Thursday. “So many jobs have come from it.”
The draft letter being circulated by the Trump administration said U.S. trade with Mexico and Canada has more than tripled, to $1.07 trillion in 2016 from $293 million in 1993.
Although still in draft form, the letter brought Cuellar a note of hope.
“I take this letter as good news, even if it is vague,” Cuellar said. “No straight forward position but the tone is much more optimistic.
“It’s declaring intent to renegotiate, and some general positive goals,” Cuellar added. “I am open-minded and ready to dive into the details.”
McAllen Chamber of Commerce President Steve Ahlenius called this letter a clear starting point.
“You can sense, just from reading the letter, that it’s gonna be an American first proposition,” Ahlenius said. “It seems like it wants to make sure companies that are bringing things into the U.S are benefiting American companies and American em-ployees first and foremost.
“For example, the comment on textiles. Kind of trying to resurrect the textile industry in the U.S.”
Cuellar did express some concerns over some provisions of the draft letter.
“Currently, NAFTA member countries can’t put tariffs on goods imported from other members,” he said. “This letter sug-gests creating a way to apply temporary tariffs in some circumstances. I am wary that such a provision may be a backdoor way to limit our international trade relationships and risk American jobs.”
Cuellar also said Mexico will act on its own – it has options.
“They’re not waiting for us,” he said about Mexico. “We were told a couple weeks ago that China was talking to the Latin-American countries part of TPP (Trans-Pacific Partnership) that, ‘hey, we’re here.’”
McAllen Mayor Jim Darling also cited China, in regards to the U.S.’s trade deficit.
“If trade deficits are a primary concern however, I wonder why we are not considering the China trade deficit as the first and primary effort,” Darling said. “I would be encouraged if the Customs (and Border Protection) discussion ramped up to help our ports of entries, with enhanced efficiencies and more staffing and upgrading of Custom’s technology and processes to better serve trade between Mexico and the U.S.”
The letter spells out few details and sticks with broad principles. But it appears to keep much of the existing agreement in place, including private tribunals that allow companies to challenge national laws on the grounds that they inhibit trade — a provision that critics say allows companies to get around environmental and labor laws.
The draft also contains some provisions that were part of the Trans-Pacific Partnership, a 12-country Asia-Pacific trade agreement negotiated by the Obama administration but rejected by Trump for possibly hurting U.S. workers.
“We’ve got a long ways to go,” said Ohio Democratic Sen. Sherrod Brown. “President Trump made big promises to working people in Ohio, and I’m ready to work with him to deliver on those promises or hold him accountable if he doesn’t.”
NAFTA critic Lori Wallach, director of the left-leaning Public Citizen’s Global Trade Watch, called the letter “a punch in the face.”
If it represents the president’s plan for a revamped NAFTA, she said, “he will have broken his campaign promises to make NAFTA better for working Americans and have a deal that cannot get a majority in Congress.”