Possible Key Points in the NAFTA Renegotiations

In his campaign for the White House, Donald Trump stressed the dangers of consistently running a trade deficit. A USA Today article says the administration will likely focus on ways to cut into the trade deficit when renegotiations formally begin on the North American Free Trade Agreement. One key point that Trump wants to revise is the “Rules of Origin.” The article says Trump believes too many parts used to assemble goods in NAFTA countries are supplied by non-NAFTA nations. When those goods are assembled, they come into the U.S. tax-free. Government contracts are another key topic for the administration. NAFTA requires the three governments to consider suppliers from other countries when it comes to infrastructure projects. That means the U.S. government must look at Mexican and Canadian suppliers as favorably as it does with American suppliers. However, Trump wants the U.S. government to favor American suppliers and experts worry that could lead to retaliation by Mexico and Canada. American suppliers would have a much harder time getting contracts with Mexico and Canada. Dispute resolution is another item of concern. Current NAFTA rules say disputes should be heard by a panel of members from all three countries. Trump believes cases involving American businesses should be heard in American courts. He believes American businesses don’t always get a fair shake in dispute resolution.