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Trump’s vague plans to overhaul NAFTA could make online shopping cheaper

Overall, though, it was short on specifics.
Justin Ling
Montreal, CA

The Trump White House’s plan of attack for the North American Free Trade Agreement contains lots of promises to expand America’s economic footprint in its two closest neighbors, but few specifics.

In fact, an 18-page list of priorities released by U.S. Trade Representative Robert Lighthizer on Monday seem to be aimed more at modernizing the oft-maligned deal than dismantling it.

In a press release unveiling the new priorities, Lighthizer singled out two aspects of the deal he’s hoping to fix: a $64 billion trade deficit with Mexico, and a lack of market access in Canada for dairy, wine, grain, and a few other things.

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Beyond that, Lighthizer’s gameplan is mostly concerned with pushing for more access for American business in those countries — with few details about how to get that done.

President Donald Trump campaigned aggressively against what he called, during a debate, America’s — maybe the world’s — “worst trade deal.”

The priorities make no specific mention of the administration’s original plan to give the United States a large amount of leeway to automatically slap temporary tariffs on its trading partners if the White House feels that cheap imports are causing serious harm to American business, a plan that was identified in a letter sent by the acting trade representative in March. That sort of provision may have amounted to a poison pill, especially for Mexico.

What it does propose, however, is axing a dispute settlement body that reviews complaints of dumping — one that acts as a mediator before a country can impose tariffs on an import that is being sold cheaply, and in great quantity. However, the proposals do suggest creating some sort o dispute settlement body, although it’s unclear how that would differ from the current system.

Mark Warner, who practices trade law in both Canada and the United States, says doing away with the original dispute settlement process — often referred to as “Chapter 19” — maybe be the most controversial. “Americans never liked it. Its status has always been dicey in U.S. law,” Warner told VICE News. “Canada might have to fight harder to keep it in this time.”

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Warner says that these negotiations, as with any trade deal, will still have points of contention. However, he adds: “None unexpected.”

Sections of the proposals may actually draw support from outside of Trump’s camp.

The proposals suggest pushing to protect the right to unionize and bargain collectively — a move undoubtedly designed to go after Mexico’s cheap labor market.

Lighthizer also suggests including environmental protections into the core of NAFTA, whereas it’s previously been a side agreement.

One big change not included in the original agreement, drafted in 1990, is the inclusion of online retailing. Lighthizer’s priorities could prove popular with consumers, as he’s pushing for a commitment not to impose duties on any digital goods, such as music and ebooks.

In effect, that could drive down the cost of goods sold through online retail giants like Amazon.

A potentially controversial part of that section, however, is a plan to forbid member nations from requiring that data or servers be kept inside the country’s borders — a move that has become popular among some cybersecurity and privacy proponents. Because a large amount of Canadian and Mexican data is located on servers based in America, with companies like Facebook and Google, there has been a push to require that data be located under local jurisdiction.

The letter also proposes new country-of-origin labelling rules that would force producers and farmers to clearly state where their products are from. That could help the Trump administration target Mexican manufacturers and Canadian agricultural goods.

But overall, the priorities offer a walk-back from many of the more contentious proposals floated in March.

Bipartisan responses were mixed, but most of the criticism focused on the proposals not going far enough. The Washington Post quoted both Democrats and Republicans who said the proposals have good elements but are ultimately too vague in their current form.

“In certain areas, there continues to be a complete lack of clarity or specificity, suggesting the administration may not even know what it wants in a new NAFTA,” said Democratic Congressman Richard Neal, according to the Post.

Canada released a statement not long after the priorities were published, but did not address any of the details.