A trade deal in distress: It’s time to save NAFTA

As neighbors on the North American continent, the United States, Canada and Mexico share a responsibility not only to promote and safeguard the interests of their citizens, but to work together to constantly improve the bonds among our three countries. For more than two decades, the North American Free Trade Agreement (NAFTA) has stood as a symbol of that shared vision.

As representatives of the American, Mexican and Canadian business communities, we believe that NAFTA has helped our respective companies and workers become more globally competitive and has significantly strengthened the North American economy, benefiting citizens of all three countries.

{mosads}At the same time, we support efforts to improve and modernize NAFTA. As a 23-year-old agreement, it needs to be updated in key areas to better address the challenges and opportunities of doing business in today’s environment.

However, we are deeply concerned that, in the round of talks that concluded this week, the United States has introduced a number of proposals into the ongoing negotiations that are inconsistent with the principles of free trade and free enterprise. 

Such demands, which together constitute a dramatic reversal of long-held U.S. trade policy objectives going back long before NAFTA, are not only unacceptable to Canada and Mexico but to the business community across the three countries.

We are concerned that we may face either a complete U.S. withdrawal from NAFTA or critical changes to the pact in ways that would greatly restrict, rather than enhance, cross-border commerce.

—

RELATED STORIES FROM THE HILL

• JEFF FERRY: Trump team rightly rattles cages at NAFTA talks
• RAYMOND J. KEATING: Fair and balanced: NAFTA needs neutral deal judges
• CLAUDE BARFIELD: US’ NAFTA demands: the moronic and the simply misguided

—

Either result would be a big step backward for businesses, farmers, workers and consumers in each of our countries, and would undermine our national and continental competitiveness and security in ways that could reverberate for decades to come.

In the United States alone, millions of jobs depend on trade with Canada and Mexico, and American companies have developed complex, “just-in-time” supply chains built around an integrated North American market. This is especially true in the automotive and textile industries.

A NAFTA withdrawal would eliminate at least 1.3 million jobs across the region, with a significant hit on the volume of both Mexico’s and Canada’s imports from the United States.

The United States meanwhile has put forward solid proposals on digital trade, trade facilitation and other areas which we support, and the parties have reported progress in efforts to modernize and improve NAFTA. 

However, the introduction of a sunset clause, setting out unrealistic objectives for rules of origin and government procurement and weakening investment protection provisions would be harmful for businesses from all three countries, within our region and globally as well.

Instead of opening new markets and strengthening global trading rules, these proposals would lower standards, add burdensome costs and undermine the competitiveness of American businesses and workers. Such measures would wreak havoc on North American supply chain relationships.  

More broadly, NAFTA is not just a trade agreement; it is the foundation of our economic, foreign policy and national security relationship between the United States and two of its strongest allies. We need to keep that bigger picture in mind in any changes to the agreement.

Businesses in North America call upon the governments of our three countries to remain at the NAFTA negotiating table, ensuring that the agreement remains fundamentally about expanding, not restricting, cross-border commerce.

In the United States, current Trade Promotion Authority gives the U.S. Congress a clear set of procedures to guarantee its participation in the process of trade negotiations. We urge members of Congress to voice their concerns about the course of negotiations.

Expanded trade and cross-border exchange among the three North American neighbors strengthens our national and continental economies. By all means, let’s modernize NAFTA. But abandoning or crippling the pact would mean abandoning our shared vision of prosperity. 

Perrin Beatty is president and CEO of the Canadian Chamber of Commerce and of ICC (International Chamber of Commerce) Canada. Maria Fernanda Garza is chair of ICC Mexico. Peter Robinson is president and CEO of the United States Council for International Business, ICC’s U.S. affiliate.