Trade Cases

NAFTA Round Three Produces Limited Results
Written by Sandy Williams
September 29, 2017
The third round of NAFTA discussions ended Wednesday with consensus on small and medium enterprises.
The chapter on small and medium-size enterprises will enhance “their ability to participate in and benefit from the opportunities created by this agreement, including through cooperative activities, information sharing, and the establishment of a NAFTA Trilateral SME Dialogue, involving the private sector, non-government organizations, and other stakeholders,” said a statement on the issue.
Proposals on government procurement, textiles and fresh produce are proving prickly, with Canadian and Mexican officials seeing little or no hope of agreement.
The U.S. wants a bigger share of government procurement contracts. The U.S. proposes that the value of Canadian and Mexican contracts combined cannot exceed the value that U.S. firms could win in the other two countries.
On the question of textiles, the U.S. wants to eliminate over the next two years preferential tariffs on textiles from Canada and Mexico. U.S. proposals on fresh produce would open products like fruit to dispute-resolution mechanisms that could lead to tariffs on Mexican exports.
U.S. Trade Representative Robert Lighthizer told reporters Wednesday that “significant progress continues to be made” in areas including competition, state-owned enterprises, digital trade and telecommunications. He added that there is still “an enormous amount of work to be done, including on some very difficult and contentious issues.”
One of those contentious issues will be rules of origin. In the next round of negotiations, the United States is expected to present proposals on rules of origin for NAFTA-produced automobiles that will ask for increased U.S.-produced content.
The recent tariffs on Canadian-built Bombardier aircraft may throw a wrench in the talks, as well. In a preliminary determination, Commerce slapped duties of 220 percent on Bombardier C Series jets that would effectively stop the import of the planes from Canada to the United States. Boeing filed for a dumping and countervailing investigation asserting that Bombardier planes were being sold to U.S. firms at below market prices due to subsidization. The World Trade Organization announced Friday that it will establish a panel to review C Series subsidies.
“While this is only a preliminary stage in the investigation, and no duties can be imposed until the final investigations are completed, Canada strongly disagrees with the anti-dumping and countervailing duty investigations into imports of Canadian large civil aircraft,” Canadian Foreign Minister Chrystia Freeland said in a statement. “This is clearly aimed at eliminating Bombardier’s C Series aircraft from the U.S. market.”
Trump has repeatedly threatened to withdraw completely from the agreement if favorable U.S. terms are not met. So far, Canada and Mexico have downplayed the threats and say they are committed to constructive talks to renegotiate the agreement.
The fourth round of NAFTA talks will be held Oct. 11-15 in Washington, D.C.

Sandy Williams
Read more from Sandy WilliamsLatest in Trade Cases

US and Canada expect positive outcomes from tariff negotiations
Canadian Prime Minister Mark Carney and US President Donald Trump told reporters at the White House on Tuesday that they’ll be formulating a trade deal that works for both nations.

Leibowitz: When the shutdown should end
There is no doubt that the current government shutdown reflects the vast divisions between the extremes of American politics, society, and even geography. Almost all Americans agree that government is necessary, but voters disagree...

Price: The U.S. Steel shutdown that wasn’t and a call to stop ‘valuation cheating’
How can the U.S. government block U.S. Steel’s Granite City rolling mill closure without harming other American steelmakers? Reducing imports should be the first step. Foreign producers continue to aggressively target the U.S. market, especially now as they find themselves displaced by Chinese exports.

US steel industry applauds ITC final determination in coated trade case
Domestic mills praised the US International Trade Commission’s (ITC's) final determination that imports of corrosion-resistant (CORE) steel from 10 countries pose a threat to them.

ITC’s final ruling: Dumped, subsidized CORE imports are harming domestic market
The US International Trade Commission (ITC) finds that corrosion resistant steel (CORE) imports from 10 countries have caused material damage to domestic product producers, according to the ITC’s statement.