President Trump can officially begin renegotiating NAFTA today, August 16th. The negotiation process can only start 90 days after President Trump officially notified Congress of this intention, which took place on May 18th.

The North American Free Trade Agreement (NAFTA) became law in 1994. NAFTA is a comprehensive trade agreement that sets the rules of trade and investment between the U.S., Canada, and Mexico. NAFTA created one of the world’s largest free trade zones. Pursuant to the deal, each NAFTA country forgoes tariffs on imported goods originating in the other NAFTA countries.

Supporters of NAFTA believe the agreement has helped boost the economies of the NAFTA countries. According to the U.S. Chamber of Commerce, 14 million U.S. jobs depend on trade with Canada and Mexico. Others believe NAFTA has hurt the economy by creating incentives for companies to relocate manufacturing and other jobs offshore.

President Trump has called NAFTA the worst trade deal in history, and he believes NAFTA is responsible for sending millions of U.S. manufacturing jobs to Mexico. Instead of leaving the trade pact and scrapping it entirely, the Trump administration will renegotiate the agreement.

Since announcing the decision to renegotiate the trade deal, the United States Trade Representative (USTR), Robert Lighthizer, has been consulting with and receiving input from members of Congress, the public, and various trade associations and special interest groups. For example, members of Congress have supported the inclusion of a competition chapter in NAFTA as a way to demonstrate the U.S.’s leadership in promoting competition and fairness in trade.

The public has also been responsive to the USTR’s request for public comment, which resulted in more than 12,000 responses and testimony from over 140 witnesses during three days of public hearings. See our earlier post here regarding the public comments on matters relevant to the modernization of NAFTA.

The USTR released a detailed summary of the negotiating objectives related to the NAFTA renegotiation. The USTR has included deficit reduction as a key objective of the renegotiation. Another major goal is to improve market access in Canada and Mexico for U.S. manufacturing, agriculture and services.

We will be following the negotiations in the coming weeks and months to see how the renegotiation will impact trade policies and practices moving forward.

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