Wilbur Ross and NAFTA
Media is packed with discussions about Wilbur Ross and NAFTA. US Commerce Secretary Wilbur Ross has recently indicated the US will soon begin formally renegotiating the North American Free Trade Agreement (NAFTA). The announcement came close upon the heels of his being confirmed to head the Commerce Department in Donald Trump’s new administration and concerned some who believe the US is vying for a trade war with Mexico. What Wilbur Ross does next is somewhat unknown, yet his comments in recent weeks leave room for optimism.
Wilbur Ross Planning to Move Quickly (Watch Video)
One thing we can be sure of is Ross will not leave NAFTA on the back burner. The newly confirmed secretary quickly stated in his first interview as Commerce Secretary that the US will be proactive on trade, emphasizing the importance of negotiating positive deals that will benefit the US – starting with NAFTA.
The US government is legally bound to notify Congress at least 90 days before signing any international trade agreement, and the new cabinet official indicated in March that such a notice would be forthcoming within a matter of weeks. This would put the beginning of talks in July of this year, 2017. The notification is part of the fast-track negotiating authority delegated to the executive branch by Congress, and requires only an up or down vote from Congress.
Specific Plans for NAFTA Renegotiations
Based on previous statements made by Wilbur Ross and NAFTA, it is possible to ascertain what future changes to NAFTA might entail. While talks have yet to begin or even be officially called for, many of the following items and visions may play a part in the new agreement based on what Ross has stated in recent months.
- According to comments made by Wilbur Ross prior to his confirmation, “The first emphasis will be on facilitating US exports to other countries, getting rid of both tariff and non-tariff barriers to trade.”
- Ross followed up with a secondary objective, stating, “The other side of that will be preventing illegally subsidized goods from coming in, and really enforcing it.”
- Remaining skeptical on the border-adjustment tax, Ross also commented, “Border adjustable is certainly one powerful mechanism for [balancing the budget], but let’s see what else evolves…what the alternatives are.”
- Speaking on the nature of a trilateral agreement, Ross has indicated he is open to negotiating separate trade deals with Canada and Mexico, but Mexico is opposed to a bilateral alternative to NAFTA.
- Additionally, the commerce secretary has indicated the government will aggressively roll back job-threatening regulations and restrictions. He pointed out, “Many of these were put in by executive orders and agency rules and those wouldn’t require acts of Congress.”
The controversy of Wilbur Ross and NAFTA will continue through summer months and on into the fall. Given Ross’ positive personal experience with manufacturing in Mexico and his awareness of the needs of manufacturing companies to maintain the lowest possible product production costs it is believed that an orderly agreement will be reached with the United States and Mexico. However it is too early to judge.
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