The Wall Street Journal (subscription required) has the scoop from sources within the Trump administration that the changes requested to NAFTA would be ‘modest.’ One change would be in government-procurement section of the deal that would allow for ‘Buy American’ policies.
According to an administration draft proposal being circulated in Congress by the U.S. trade representative’s office, the U.S. would keep some of Nafta’s most controversial provisions, including an arbitration panel that lets investors in the three nations circumvent local courts. The draft, reviewed by The Wall Street Journal, talks of seeking “to improve procedures to resolve disputes,” rather than eliminating the panels.
Similarly, the U.S. wouldn’t use the Nafta negotiations to deal with foreign currency policies or to hit numerical targets for bilateral trade deficits, as some trade hawks have been urging. One of the most far-reaching changes would allow a Nafta nation to reinstate tariffs in case of a flood of imports that cause “serious injury or threat of serious injury” to domestic industries.
The draft could be revised. The administration must give Congress 90 days’ notice under trade law before beginning formal Nafta renegotiations. It is far from clear that Canada and Mexico would agree to the changes the U.S. seeks.