NAFTA Draft Notice Includes Broad Goals on 'Customs Matters' and Other Issues

The Trump administration is considering a push for new World Trade Organization trade facilitation commitments as part of NAFTA renegotiations, according to a draft notice from Acting U.S. Trade Representative Stephen Vaughn (here). That would mean new rules requiring NAFTA countries to conduct "customs operations with transparency, efficiency, and predictability, and that customs laws, regulations, decisions, and rulings are not applied in a manner that would create unwarranted procedural obstacles to international trade," it said. Those commitments were included in a list of three main "customs matters" in the draft. Congress earlier this week (see 1703290038) received the draft, which, once finalized, would formally initiate a consultation period ahead of NAFTA discussions.

Negotiators should also seek "terms for cooperative efforts" to enforce "customs rules and related issues, including in the areas of trade in textiles and apparel and agricultural products of concern and to enhance our ability to prevent and address antidumping and countervailing duty evasion and transshipment," it said. The draft also lists a need to "strengthen collaboration" in implementing the WTO Trade Facilitation Agreement and to "create a procedure for exchanging information on trade facilitation-related issues."

Under a "trade remedies" section, the draft also mentions a "safeguard mechanism to allow a temporary revocation of tariff preferences, if increased imports from NAFTA countries are a substantial cause of serious injury or threat of serious injury to the domestic industry." White House Press Secretary Sean Spicer said during a press conference (here) that the draft is "not a statement of administration policy" or "an accurate assessment of where we are at this time."

The draft notice didn't seem to go as far in terms of a major overhaul as some expected. As a result, the draft is seen by many as a milder approach to the many complaints President Donald Trump has about the deal. “The President set a high bar in his rhetoric about re-negotiating NAFTA, this letter falls short,” Rep. Sandy Levin, D-Mich., said (here). Gary Hufbauer of the Peterson Institute for International Economics also found the draft to be surprisingly meek. "It's very soft, in terms of what they want, and they respect the Congress," he said during a March 30 panel discussion of existing roles of the congressional and executive branches in U.S. trade policy at the American Enterprise Institute. "It reads kind of like the letter that started off the [Trans-Pacific Partnership] TPP negotiations," he said. The "most aggressive part" is on government procurement, he said. "Apart from that, it's a pretty modest initiation, so I'm still of the view that the Trump administration's bark is worse than its bite."

Commerce Secretary Wilbur Ross disputed the notion that the administration shifted its tone, during an interview on CNBC (here). "There's no change in our thinking," he said. "This letter simply describes in very broad outline the topics we'll discuss, so I don't think there's any great reasons for you to overthink it."