United States Trade Representative

President Trump can officially begin renegotiating NAFTA tomorrow, August 16th. The negotiation process can only start 90 days after President Trump officially notified Congress of this intention, which took place on May 18th.

The North American Free Trade Agreement (NAFTA) became law in 1994. NAFTA is a comprehensive trade agreement that sets the rules of trade and investment between the U.S., Canada, and Mexico. NAFTA created one of the world’s largest free trade zones. Pursuant to the deal, each NAFTA country forgoes tariffs on imported goods originating in the other NAFTA countries.

Supporters of NAFTA believe the agreement has helped boost the economies of the NAFTA countries. According to the U.S. Chamber of Commerce, 14 million U.S. jobs depend on trade with Canada and Mexico. Others believe NAFTA has hurt the economy by creating incentives for companies to relocate manufacturing and other jobs offshore.

President Trump has called NAFTA the worst trade deal in history, and he believes NAFTA is responsible for sending millions of U.S. manufacturing jobs to Mexico. Instead of leaving the trade pact and scrapping it entirely, the Trump administration will renegotiate the agreement.

Since announcing the decision to renegotiate the trade deal, the United States Trade Representative (USTR), Robert Lighthizer, has been consulting with and receiving input from members of Congress, the public, and various trade associations and special interest groups. For example, members of Congress have supported the inclusion of a competition chapter in NAFTA as a way to demonstrate the U.S.’s leadership in promoting competition and fairness in trade.

The public has also been responsive to the USTR’s request for public comment, which resulted in more than 12,000 responses and testimony from over 140 witnesses during three days of public hearings. See our earlier post here regarding the public comments on matters relevant to the modernization of NAFTA.

The USTR released a detailed summary of the negotiating objectives related to the NAFTA renegotiation. The USTR has included deficit reduction as a key objective of the renegotiation. Another major goal is to improve market access in Canada and Mexico for U.S. manufacturing, agriculture and services.

We will be following the negotiations in the coming weeks and months to see how the renegotiation will impact trade policies and practices moving forward.

North America from space
Copyright: antartis / 123RF Stock Photo

Public comment on NAFTA renegotiations has been extended until midnight tonight ET, according to an Alert by Nevena Simidjiyska published on June 13:

The process of renegotiating the North American Free Trade Agreement (NAFTA) with Mexico and Canada officially began on May 18 when the Office of the U.S. Trade Representative (USTR) notified Congress, triggering a 90-day period during which the administration will consult with Congress before NAFTA negotiations can begin. The USTR requested public comments on its negotiation of NAFTA, which were initially due by June 12. The USTR has extended its deadline to June 14 at 11:59 p.m. ET.

After originally calling for a complete withdrawal from NAFTA, the administration displayed a more lenient position in its announcement and notice to Congress. The administration continued to criticize NAFTA’s provisions on labor and environmental protection, digital trade, intellectual property protection, and state-owned enterprises, however, it called for modifying certain aspects of the agreement, rather than comprehensive revisions.

Canada and Mexico have shown a willingness to renegotiate portions of NAFTA, provided that the majority of the Agreement stays intact.  The two countries are likely to push back on certain topics, including the administration’s plan to increase local content for country-of-origin calculations, including that of automobiles, reduction in Canada’s protective measures of its dairy industry, and easing of Mexico’s restrictive policy on foreign investment in its energy sector.

The USTR requested public comment on its negotiation of NAFTA on a broad number of topics listed at the end of this article.  Parties may also testify at an open hearing scheduled for 9 a.m. on June 27, 2017 held in the Main Hearing Room of the U.S. International Trade Commission in Washington, D.C. Written comments and requests to testify must be submitted to USTR.  Although the deadline for submission was originally June 12, the deadline has been extended to June 14 at 11:59 pm ET.

To read Nevena’s full update on the USTR’s call for public comment on NAFTA, including topics open for public comment, please visit the Fox Rothschild website.

In a letter dated May 16, 2017, the Internet Association, a trade group representing some of the largest internet companies in the country (and the world), pressed newly confirmed U.S. Trade Representative Robert Lighthizer to see their perspective on trade policies in the digital age.

Among the companies that the Internet Association represents are established giants such as Google, Amazon, and Facebook as well as those pushing the newest frontiers of Internet commerce, including Uber, Airbnb, and Dropbox.  This distinguished group of companies set forth six key principles that it asked Representative Lighthizer to consider implementing to defend and grow digital trade around the world.

First, the Internet Association calls for the creation of specific policies to clarify and support the cross-border transfers of information.  Specifically, the group highlights the need to eliminate requirements that data stored or processed in facilities located within the United States.

Second, the coalition requests that the Representative defend and promote the ‘balance’ achieved by current U.S. copyright laws.  The Internet Association cites the centrality of ‘fair use’ to web search, machine learning, data mining, and cloud technologies and notes that internet companies rely on safe harbors and liability limitations in copyright law as they push to create innovative new products and services.

Third, the Internet Association similarly lauds section 230 of the Communications Decency Act which insulates internet content host from liability for the ‘speech’ of its users.  As the letter notes, this protection, which fosters an environment of open discourse, is not realized in all countries.

Fourth, the group believes that streamlining customs procedures would foster growth in small and micro internet business who connect consumers to new goods from around the world.

Fifth, the Internet Association cautions that restrictions and outright prohibitions on access to the internet and specific digital services will negatively affect the U.S.’s strong internet economy and that the Representative should work to ensure non-discriminatory market access.

Finally, the group calls for the designation of a senior-level official to oversee digital trade matters and negotiations.

The Internet Association’s letter underscores that the internet sector of the U.S. economy is – and must remain – a focus of U.S. trade policy.  While the Internet Association represents some of the largest internet companies in the world, concerns over potential liability, customs delays, and non-discriminatory access to international markets are shared by all companies with an internet presence.  As the internet drives an ever growing sector of the U.S. economy, all companies must be ready to navigate their compliance with import and export barriers that are no longer merely physical.

The Senate confirmed Robert Lighthizer as the US Trade Representative (USTR) on Thursday. The USTR is a Cabinet position, and thus Lighthizer will now serve as President Trump’s top trade negotiator.

The Senate confirmed Lighthizer with support from both Republicans and Democrats. The 82-14 vote followed months of delays prior to his confirmation.

In order to serve as USTR, Congress had to first pass a waiver to confirm him. Section 141 of the Trade Act of 1974 bars anyone who has “directly represented, aided or advised a foreign entity … in any trade negotiation, or trade dispute” from serving as USTR or Deputy USTR. In the mid-1980s Lighthizer represented Brazil in a trade dispute over ethanol with the US, and in the early 1990s he represented an electronics trade group linked to the Chinese government.

The Senate Finance Committee approved a waiver of this restriction, and the waiver passed the House and Senate and was signed into law on May 5, 2017. The confirmation of Lighthizer means that the administration can now begin the formal process to begin renegotiating the North American Free Trade Agreement (NAFTA) between the US, Canada and Mexico, as well as moving forward with other trade deals.

 

The U.S. Senate Finance Committee will hold a hearing on March 14th to consider the nomination of Robert Lighthizer, of Skadden, Arps, Slate, Meagher & Flom LLP, to serve as the next U.S. Trade Representative. The U.S. Trade Representative is the head of the Office of the United States Trade Representative (USTR) and is a Cabinet member who serves as the President’s principal trade advisor.

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Lighthizer, who has focused his career on trade litigation and policy, was a deputy trade representative during the Reagan administration, and he was chief of staff for the Senate Committee on Finance. Lighthizer is a vocal advocate for an enforcement-focused U.S. trade policy.

Former King & Spalding LLP attorney Stephen Vaughn, who worked with Lighthizer at Skadden, is the current trade representative, on an interim basis.

The selection of Lighthizer as President Trump’s pick to serve as the new U.S. Trade Representative has not been as controversial as other recent Cabinet nominees. However, Lighthizer’s status as an advocate for the Brazilian government in a 1985 trade case appears to require a waiver before he can serve as the U.S. Trade Representative.

President Trump has promised to renegotiate international trade deals like the North American Free Trade Agreement (NAFTA) and punish companies that ship work overseas, and it appears that the selection of Lighthizer is consistent with this approach. President Trump said in announcing Lighthizer as his choice for the U.S. Trade Representative that Lighthizer would help “fight for good trade deals that put the American worker first.”

The USTR is an agency that negotiates directly with foreign governments to create trade agreements to resolve disputes and participate in global trade policy organizations. The USTR is responsible for developing and coordinating U.S. international trade, commodity, and direct investment policy, and overseeing negotiations with other countries. The USTR works closely with Congress and specifically with the House Committee on Ways and Means and the Senate Committee on Finance, the two Committees with principle responsibility for international trade issues.