Welcome to Weise Wednesday! Twice a month we will share a brief Q&A with the former U.S. Commissioner of Customs, Mr. George Weise. If you have questions, we encourage you to send them to This email address is being protected from spambots. You need JavaScript enabled to view it..

 

Q: What is the status of negotiations to revise NAFTA?

A: The third round of talks for the “renegotiation and modernization” of NAFTA were held in Ottawa, Canada from September 23-27, 2017. The fourth round of talks is scheduled to take place in Washington on October 11-15. 

The original plan was to conclude the negotiations over seven rounds by the end of calendar year 2017 in order to avoid the political implications of elections next year in Mexico and the United States. However, based on the progress made so far and the contentious issues that remain, the goal seems overly optimistic. A more realistic, yet still challenging, timetable would be to reach an agreement by the spring or summer of 2018.

According to the Trilateral Joint Statement issued by the three countries at the conclusion of the talks in Ottawa, the negotiators “made significant progress in several areas through the consolidation of text proposals, narrowing gaps, and agreeing to elements of the negotiating texts.” 

More specifically, the Trilateral Statement sets forth “meaningful advancements in the areas of telecommunications, competition policy, digital trade, good regulatory practices, and customs and trade facilitation.” Many of these issues were not contentious and can be viewed as an update of the nearly 25-year-old agreement. Several of the provisions were drawn from the recently negotiated Trans-Pacific Partnership and were conceptually agreed to by all three parties before the U.S. pulled out of the agreement.

One of the primary reasons the U.S. demanded the renegotiation of NAFTA was to reinvigorate American manufacturing and create more U.S. jobs. To accomplish this objective, the U.S. has proposed the following: strengthening the NAFTA origin rules, increasing the requirements for U.S. content vs. Mexican and Canadian content, bringing labor and environmental regulations into the core of the agreement rather than as supplemental agreements, and changing some of the dispute settlement provisions. These proposals, which are strongly opposed by Mexico and Canada, have not yet been addressed, but are likely to be discussed in the upcoming talks in Washington. Needless to say, the negotiations will be challenging from this point forward as these contentious issues are tackled.

Stay tuned for further developments as the negotiations proceed.