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Plastic Industry Forum - Converse with Plastics Processing Leaders / Business / The Trump's Administration's Softened Tone on a NAFTA "Update"
Posted:  19 Jun 2017 20:39   Last Edited By: Benesch
The Trump Administration gave Congress official
notice on Thursday, May 18, that it plans to
renegotiate NAFTA by providing a two-page
letter to Congress from the newly confirmed
United States trade representative, Robert
Lighthizer. The letter was required under a law
that mandates that the president give Congress
at least 90 days’ notice before opening a trade
negotiation. The notice is a much scaled-back
version of the eight-page draft that Congress
received in March, which proposed adding a
provision to allow tariffs to be reinstated if a
flood of imports threatened to harm a domestic
industry.

Mexico’s Economy Minister released a
statement welcoming the announcement,
reaffirming its willingness to update the
agreement and continue to regulate trade
relations in North America. Canadian Prime
Minister, Justin Trudeau, has echoed Mexico’s
comments that an updated agreement would be
a welcome change.

On May 30, thirty-two chief executives sent
a letter to the Trump Administration, urging
the administration to move swiftly on an
update to NAFTA. They urged quick action and
emphasized the benefits that they currently
receive from the deal. A swift resolution,
however, is unlikely. Transparency rules will
create procedural delays in the negotiations,
which will likely push the negotiations into the
2018 campaign season. Such timing will allow
Democrats to press Republican lawmakers to
live up to their campaign promises of more jobs
and better jobs.

Few among Americans, Mexicans, and
Canadians want a total overhaul of NAFTA. Most
would prefer status quo on the overall structure
and an update in various areas. Stronger
intellectual property rights and a commitment
from Mexico and Canada not to impose customs
duties on digital products is one area in which
we may see an update. Other outcomes that
have been discussed include lower trucking
rates, reduced trade which creates more
warehouse space, and an increase in ocean
rates as demand increases, but it is difficult to
predict with certainty.

With negotiations beginning at the earliest in
August 2017, it is too early to know how the
negotiations will affect manufacturers and
companies in the transportation and logistics
industries. Benesch will continue to monitor
negotiations and pre-negotiation releases of
information to provide updates to our
clients in the manufacturing, transportation
and logistics, and related industries of any
developments.

For more information contact:

Kevin Capuzzi 302-442-7063 kcapuzzi@beneschlaw.com

Paul Obszanski 317-685-6145 pobszanski@beneschlaw.com
© 2014 Manufacturers Association of Plastics Processors