Manufacture This

The blog of the Alliance for American Manufacturing

Depends on what "breakthrough" means, but there's movement between the U.S. and Mexico.

The Trump administration had a rough news cycle on Tuesday. Lost in all of the din of guilty pleas and verdict, though, was a NAFTA announcement.

There’s been a thaw. A breakthrough! U.S. and Mexican negotiators are reportedly close to resolving their disputes over the trade deal, and White House officials are reportedly planning an announcement to that effect on Thursday.

Politico reports:

The U.S. and Mexico have been focused primarily on negotiating contentious automotive rules that govern how much of a car must be sourced from within North America to qualify for reduced tariffs under NAFTA. The U.S. has been seeking to increase that threshold and to add new mandates requiring a certain percentage of each car be produced by workers earning at least $16 an hour.

That won’t wrap up the NAFTA renegotiation, of course. It takes three to tango (in this case) and Canada -- the other sovereign nation involved in this deal -- will have to agree to any new consensus before the deal can move forward. What’s more, some among the transition team of Mexican President-elect Andres Manuel Lopez Obrador aren’t thrilled with existing NAFTA rules governing energy industry investment. That could throw a wrench in the deal’s progress; and, oh yeah, there are reportedly a ton of outstanding issues unresolved.

Nevertheless, there’s movement. And President Trump (after lots of bad press early in the week) is likely to be very happy with the breakthrough with Mexico.

But what’s actually in this renegotiation?

It’s hard to say. They’re closed-door negotiations, after all. But here’s what the Alliance for American Manufacturing is looking for:

Strong rules of origin, because only a country that has signed onto this deal should be able to obtain its benefits.

A rule on currency manipulation to serve as a model for other trade agreements.

Better coordination of national trade remedy rules, so that a country outside the trade zone can’t maneuver dumped or subsidized products through one NAFTA country to avoid duties in another.

No further opening of American government procurement markets for Canadian and Mexican firms unless their governments make concessions that are reciprocal to U.S. companies in volume and access.

Much more stringent environmental and labor standards, because NAFTA’s current side agreements on these don’t cut it.

Read more on AAM's NAFTA priorities here.