Industry Outlines Priorities for Modernizing NAFTA
As US President Donald Trump appears ready to start renegotiating NAFTA – a treaty he has described as a “catastrophe” for the country – industry associations from the US, Canada and Mexico have taken the unusual step of releasing a joint statement defending the free trade agreement and stating their priorities.
The American Chemistry Council (ACC), the Chemistry Industry Association of Canada (CIAC) and the Mexican Chemical Industry National Association (ANIQ) said NAFTA’s success lies in the economic partnerships and supply chain synergies and efficiencies that have been created through reduced barriers to trade. They noted that since NAFTA entered into force, trade in chemicals between the three jurisdictions has more than tripled, from $20 billion in 1994 to $63 billion in 2014.
However, they conceded that while NAFTA has delivered important gains for the North American chemicals sector, the trade deal could have an even larger impact if it reflected progress in regulatory, customs, transportation and communication practices and procedures.
Their statement was issued just two days after Trump aide and billionaire investor Wilbur Ross – owner of major chemical distributor Nexeo Solutions – was confirmed by the Senate as commerce secretary. Ross is expected to be a key player in renegotiating the 23-year old pact with Canada and Mexico, something he has been reported as saying would be a “top priority” in his appointment.
ACC, CIAC and ANIQ said the most important issue for a new NAFTA would be to maintain the existing duty-free status of chemical products traded between the three countries. Both during his campaign and after his election, Trump has threatened to impose high tariffs against imports from Mexico.
In addition, a modernized NAFTA should facilitate digital trade, set key standards - such as on the competitive practises of state-owned enterprises - and close inefficiencies on trade disciplines, including rules of origin and duty drawback, the associations said.
They added that they would also advocate for enhanced regulatory cooperation commitments, which would provide a significant boost to innovation, growth and jobs.