U.S More Business as Usual Expected at NAFTA Talks

Despite U.S. criticism of the North American Free Trade Agreement, upcoming talks aren't expected bring about a sea change. But there will be significant changes discussed. Persuading Mexico to improve its labor standards to inch toward a more level playing field with U.S. manufacturers will be among the key priorities of the United States in the talks, U.S. negotiators revealed July 17. Other aims will be increasing environmental standards, updating rules of origin to limit tariff-free imports and altering the bloc's dispute settlement mechanism to make it more transparent.

The objectives, set out by the office of the United States Trade Representative (USTR), will form part of the negotiations with Mexico and Canada, potentially later this year. Though the priorities for a new trade deal were largely laid out in prior statements by U.S. economic and trade officials, a number of elements introduced for the first time could lead to new regulations. These topics include energy, intellectual property rights and cross-border digital information flows.

The published priorities do not reflect any desire on the part of the U.S. administration to substantially change the way the United States trades with Canada and Mexico, and there is nothing in the USTR priorities that immediately suggests a contentious series of talks between Ottawa, Mexico City and Washington. Though the USTR repeated some of the administration's rhetorical criticisms of NAFTA, such as manufacturing job losses, the goals laid out show the administration intends to stick with a more modest negotiation and modernization of the agreement.

Nevertheless, difficulties may still crop up once the negotiations begin and when they continue into next year. While Canada and Mexico are likely to cede issues such as more stringent rules of origin, other demands such as increased labor standards for Mexico may prove controversial. And any attempt to make it easier for the United States to enact anti-dumping measures against Canada and Mexico and to impose extra import taxes in the future will also meet resistance.

source:https://worldview.stratfor.com/article/us-more-business-usual-expected-nafta-talks