Autos and auto parts make up 25 percent of the NAFTA trade, and the head of the trade group that represents Detroit's Big 3 auto firms says they will push aggressively to get the NAFTA rewrite through Congress next year. Matt Blunt, CEO of the American Automotive Policy Council, said, "If party control changes in one of the chambers, that does make it more difficult to gain approval of USMCA, but I still think it's highly doable." Blunt is the former governor of Missouri, and his father Roy Blunt is in the Republican leadership in the U.S. Senate.
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The U.S. will not meet with China to talk about trade until he's convinced they're ready to make a deal, President Donald Trump said, speaking with reporters after U.N. Ambassador Nikki Haley announced her resignation on Oct. 9 at the White House. Trump said the U.S. rebuilt China by purchasing so many Chinese goods, and that he wants to put an end to the unbalanced trading relationship. "China wants to make a deal. And I say they’re not ready yet. I just say they’re not ready yet. And we’ve canceled a couple of meetings because I just say they’re not ready to make a deal," he said. "It’s been a one-way street for 25 years. We’ve got to make it a two-way street. We’ve got to benefit also, OK?"
International Trade Today is providing readers with some of the top stories for Oct. 1-5 in case they were missed.
Withdrawing from NAFTA before ratification of the U.S.-Mexico-Canada Agreement would "trigger devastating negative economic consequences," the Koch Brothers' Freedom Partners organization told President Donald Trump in a letter sent Oct. 3. The letter, which commended the administration for reaching an agreement, said USMCA has positive elements on digital trade, e-commerce and finances, but the introduction of wage standards and stricter auto rules of origin "drive up costs for everyone while protecting only a few jobs at the expense of many others." Freedom Partners and Americans for Prosperity asked the administration to immediately drop the steel and aluminum tariffs on Mexico and Canada, and to end the threat of Section 232 tariffs on autos and auto parts.
When the head of the Canada Institute asked Canadian negotiators in the NAFTA talks what they were most proud of, they said modernization at the border. "The customs facilitation, the regulatory [change] makes a big difference," said Laura Dawson, director of the Wilson Center's Canada Institute. "Origin certificates used to have to be faxed to the border. The fact that they're going to use iPads is a huge win."
The scaling back of the investor-state dispute system, a wage component to rules of origin and a more enforceable labor and environmental standard all address Democrats' complaints that free trade erodes American workers' wages and jobs and privileges corporations over citizens, said Edward Alden, a senior fellow at the Council on Foreign Relations. "The politics of this are sort of fascinating here," he said of the new U.S.-Mexico-Canada Agreement.
The U.S.-Mexico-Canada Agreement is not a rewritten NAFTA, President Donald Trump said Oct. 1. Instead, "This one is a brand new deal," he said during a White House event. Lawyers who have begun reading the text say the treaty builds on the Trans-Pacific Partnership and the original NAFTA, while including some important new provisions. Mark Warner, a Canadian-U.S. trade lawyer, said that while Trump's speech was full of puffery, "the auto stuff is significant. I don’t think anyone should say it’s not significant."
As effusive as President Donald Trump was about the significance of his NAFTA rewrite, he was cautious about its chances of getting through Congress next year. Polls suggest Democrats could retake the majority in the House of Representatives, and there is a significant number of Democrats voted against the original NAFTA, or who pledged to vote against the Trans-Pacific Partnership. The earliest a vote could come, because of timelines laid out in fast track, would be in February. But it's likely to be later, since that doesn't include the time needed for Congress to draft implementing legislation.