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Manufacture This

The blog of the Alliance for American Manufacturing

But the negotiations are just getting started. Here are AAM's positions.

At a political rally in Phoenix last night, President Trump said he thinks NAFTA is finished.

“I personally don't think you can make a deal without a termination,” he told the crowd. “But we’re going to see what happens, okay?”

What should be made of that statement? Is the deal as good as dead?

Probably not. Donald Trump says a lot of things off the cuff at his rallies, very fast and loose. And he didn’t vow to kill the deal, just that he’s considering it. That’s a world of difference, especially to Trump, who has railed against NAFTA since the beginning of his presidential campaign.

But it’s still an important statement. Off the cuff or not, the president’s remarks caused the peso to weaken. And the first round of negotiations have only just wrapped up.

Though there are concerns that the speed of the talks may trump substance, something may get done. If something does, the Alliance for American Manufacturing has its positions laid out in a letter sent to United States Trade Representative Robert Lighthizer.

Among other issues it discussed are rules of origin:

Automobiles, auto parts, and the steel used in their production, from countries such as Japan, South Korea, and China, all of which heavily protect their own industries, should not be permitted to displace North American production through outdated rules of origin.

Exchange rates:

The United States, Canada, and Mexico should set a high, state-of-the-art standard in NAFTA for market-based exchange rates free from manipulation and misalignment.

Better labor and environmental rules:

NAFTA’s side agreements on labor and the environment are completely inadequate as a tool to remove these market distortions. To ensure the benefits of NAFTA are more broadly and sustainably shared, its labor and environmental commitments should be strengthened and made as enforceable as the commercial elements of the new agreement, subject to strong trade penalties.

And government procurement:

The United States should make no new procurement market access concessions in the renegotiations unless such new concessions are stringently reciprocal in both volume and access.

Read the whole letter here.

All of these are important topics that require a great deal of attention, so they had better get cracking; Mexico has a national election coming up, putting the negotiations are on a tight timeline. Should a deal be reached, we expect it to keep these issues in mind.