USTR to seek “appropriate mechanism” in NAFTA on currency manipulation

While the United States had a almost $8-billion (7-billion-euro) trade surplus with Canada in 2016 it also had a $63-billion (55 billion-euro) trade deficit with Mexico in goods and services, which the Trump administration believes hurts the US.

Swiftly repealing NAFTA was a campaign pillar of then-presidential candidate Donald Trump, who called it the “worst trade deal in history” and blamed it for the loss of U.S.jobs in sectors like the automotive industry.

According to Monday’s set to objectives, the Trump administration will take aim at reducing US trade deficits. These include subsidies and unfair pricing structures.

The USTR said it would seek to strengthen NAFTA’s rules of origin to ensure that the pact’s benefits do not go to outside countries and to “incentivize” the sourcing of US goods.

It also plans to eliminate a range of non-tariff barriers to United States agricultural exports to Canada and Mexico.

It will also seek to ensure NAFTA countries don’t engage in currency manipulation “to prevent effective balance of payments adjustment or to gain an unfair competitive advantage”. Rules of origin dictate the percent of a product that must be produced in NAFTA countries.

The outcome of those negotiations could significantly shift trade with Canada and Mexico that supports almost 14 million American jobs, according to the U.S. Chamber of Commerce.

Trump railed against NAFTA during the election and moved to renegotiate it after reportedly wanting to scrap the deal entirely earlier this year. “Under President Trump’s leadership, USTR will negotiate a fair deal”.

Negotiations with Canada and Mexico are scheduled to begin on August 16.

Trump’s bark has largely been harsher than his bite on NAFTA since his inauguration, and concerns that he will take radical action on the agreement have waned, at least temporarily.

Canadian Minister of Foreign Affairs Chrystia Freeland said the US list was “part of its internal process” although a source familiar with Canadian government thinking said the document was “not earth shattering”.

“As the administration looks to highlight American-made products this week, there is no better way to do so than by charting a path to economic advancement for America’s farmers, ranchers and foresters”, Conaway stated in a prepared press release. His companies and his daughter’s, which manufacture their products overseas, were not invited.

Members of Congress were already weighing in Monday on what they hope to see in any renegotiated deal, with their goals ranging from prioritizing American workers, enhancing environmental standards and supporting specific US industries.

President Richard Trumka of the AFL-CIO, an umbrella organization of unions representing 12.5 million workers, said the North American Free Trade Agreement had been an “unequivocal failure” and should be completely renegotiated.