US Trade Representative announces Administration plans for new NAFTA agreement.
The North American Free Trade Agreement became law following the signing of the agreement by the then-Presidents of Canada, the United States and Mexico in 1992. It became law after ratification by the elected governments in each of the three countries, and it passed the US House and Senate in November, 1993. The law came into force on January 1, 1994.
Citing the loss of manufacturing jobs and a greater trade imbalance, particularly with Mexico, President Trump campaigned on a platform that NAFTA needed to be re-opened and renegotiated to the benefit of the American workforce. The Chamber of Commerce credits NAFTA with increasing trade between the three nations from $337 billion in 1993 to $1.2 trillion in 2011. US exports to NAFTA grew from $170 billion in 1993 to $599.5 billion in 2012.
Last week, United States Trade Representative Ambassador Robert Lighthizer took the first steps by formally notifying Congress of the Administration’s goals in the renegotiation of NAFTA.
The foci will be:
- Tying deficit reduction to the agreement, as they cite a swing from a $1.3 billion surplus to a $64 billion deficit in bilateral goods trade balance.
- Addressing the bilaterally-negotiated agricultural issue about market access for products like dairy, wine, grain and other products.
- Addressing the side agreements (language not part of the main text) that covers the digital economy and also strengthening labor and environmental obligations.
While this is happening at a policy level, what we don’t envision changing anytime soon are the requirements for documentation of origin claims and requirements, one of the fastest ways to earn a trilateral audit from the Customs agencies of all three partner countries. If your company is looking to commence doing NAFTA business, either as an importer or exporter, talk to us here at RIM to help you put the right procedures in place. At RIM, we want to ensure that you and your buyer or seller across the border to the north and south remain compliant while taking full advantage of the terms of the agreement.