#1 – NAFTA ROUND SEVEN DETAILS
- WHEN: The seventh round kicked off yesterday and is expected to go until March 5th.
- WHO: Negotiators responsible for specific chapters are meeting now, chief negotiators for each country will meet toward the end of the week, and ministers will meet over the course of the final days of negotiations. A Congressional delegation led by House Ways and Means Chairman Kevin Brady is expected to travel to negotiations next weekend.
- WHERE: Negotiations will take place at the Real Camino Hotel in the Polanco neighborhood of Mexico City.
- WHAT WILL BE DISCUSSED: It’s very possible that negotiators close out chapters on digital trade, telecommunications, and food safety measures. Ministers are expected to discuss the thornier issues of auto rules of origin and a potential sunset clause now that Canada and Mexico have offered counter-proposals to the U.S.’s controversial initial proposals on those subjects.
Bloomberg previews the upcoming round and the potential for talks to drag on beyond March HERE.
#2 - TRUMP OFFERS UP RED MEAT ON TRADE AT CPAC
President Trump both renewed his threat to withdraw from NAFTA and tied the renegotiation of NAFTA to Mexico “paying for” his long-sought wall on the U.S.-Mexico border at a speech on Friday to the Conservative Political Action Committee’s (CPAC) annual conference in Maryland. Watch here:
#3 - TRUMP ECON TEAM CONTRADICTS HIM ON TRADE BALANCE WITH CANADA
This is awkward…One of President Trump’s favorite lines on the need to renegotiate NAFTA with Canada is a supposed “$17 billion trade deficit” faced by the U.S. The line has repeatedly drawn criticism from Prime Minister Justin Trudeau and independent fact-checkers who have noted that it’s false.
Well, add Trump’s own Council of Economic Advisors (CEA) to the list of those who have contradicted the President’s statement with accurate information about the U.S. trade balance with Canada. Last week the annual CEA report noted that the U.S. actually has a trade surplus with Canada. Most economists agree that trade balance is not an effective way of measuring trade relationships or the performance of free trade agreements. More from the Toronto Star HERE.
#4 – ISDS ON THE CHOPPING BLOCK IN NAFTA?
Inside U.S. Trade reported last week that all three NAFTA partners are nearing an agreement to drop Investor-State Dispute Settlement (ISDS) from the agreement. According to the report, Canada is expected to offer eliminating ISDS, something that U.S. Trade Representative Robert Lighthizer has favored. Mexico, which has used ISDS protections to attract foreign direct investment is not expected to oppose the agreement.
Dropping ISDS, which the largest U.S. business groups support, could create even more friction between some of the most influential and deep-pocketed business associations and the Trump administration on trade issues. It could also put Congressional Republicans in a tough spot if and when a final NAFTA agreement is sent to the Hill.
#5 - MATTIS OFFERS QUALIFIED SUPPORT FOR STEEL TARIFFS IN DOD MEMO
Last Thursday, the Department of Defense released a report which supported Commerce Secretary Wilbur Ross’ finding that imports of steel and aluminum pose a threat to national security.
BUT, importantly, Mattis said that DoD would rather see targeted tariffs aimed at isolating the problem of Chinese overproduction rather than a global quota or import tariff. The memo also noted concerns Mattis has over the impact of tariff on U.S. allies and suggests waiting on aluminum action until after taking any proposed steel action. Read more from CNBC HERE.
#6 - EUROPEAN COMMISSION READIES RETALIATORY TARIFF RESPONSE TO STEEL AND ALUMINUM
European news outlets are reporting that the European Commission is preparing for a quick retaliatory response should they be targeted by steel or aluminum tariffs. Among their primary targets for tariffs are products exported from states that supported Trump including Harley Davidson motorcycles, Bourbon, and ag products. More HERE (click on google translate).
#7 – NAVARRO’S RETURN?
Inside U.S. Trade reported on Friday that Peter Navarro, the trade hawk who many believed had been effectively sidelined in internal trade discussion by National Economic Council head Gary Cohn, may be returning to the fold. The report cites sources saying Navarro is being promoted by Trump to “Assistant to the President” which would put him back in the room as major trade decisions are being made. More from IUST HERE.