The US Chamber of Commerce (USCC) on Friday warned that US President Donald Trump’s administration was making “highly dangerous demands” in the North American Free Trade Agreement (NAFTA) modernization talks that could erode US business support and torpedo the negotiations.
The chamber’s vice president for international policy John Murphy said the largest US business lobby was urging the administration to drop some of its more controversial proposals, including raising rules of origin thresholds to “extreme” levels.
“We’re increasingly concerned about the state of play in negotiations,” Murphy told reporters.
US, Canadian and Mexican negotiators are preparing for a fourth round of talks to update the 23-year-old trade pact in a Washington suburb from Wednesday to Monday next week.
US companies large and small were worried about a proposal by US Trade Representative Robert Lighthizer to add a five-year termination clause to NAFTA, Murphy said.
He said there was also concern about Lighthizer’s proposal to reduce Canadian and Mexican companies’ access to US public procurement contracts and to include a US-specific content requirement for autos and auto parts.
“We see these proposals as highly dangerous and even one of them could be significant enough to move the business and agriculture community to oppose an agreement that included them,” Murphy said.
He also voiced similar concerns about US proposals to revamp dispute settlement mechanisms and trade protections for seasonal US produce.
US lawmakers and congressional staff are also growing increasingly concerned that the talks could reach a successful conclusion.
US House of Representatives Ways and Means Committee Chairman Kevin Brady, a pro-trade Republican, has invited Canadian Prime Minister Justin Trudeau to speak to the tax- and trade-focused panel on Wednesday as negotiators return to the table, a committee spokeswoman said.
Inside US Trade, a trade publication, stirred concerns among auto industry groups by quoting unnamed sources as saying that the Trump administration was also moving forward with a bid to increase North American content requirements for autos to 85 percent, from the current 62.5 percent, with a new 50 percent US content requirement.
US Trade Representative spokeswoman Emily Davis declined to comment on the report, but said that Trump had been clear about the need to shake up the agreement governing the trade bloc.
“NAFTA has been a disaster for many American, and achieving his objectives requires substantial change,” she said. “These changes of course will be opposed by entrenched Washington lobbyists and trade associations.”
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