North America Not busy Trade Agreement negotiations will probably start late this year, muscle take about a year, and will include serious changes that could classify the addition of several entire new chapters to the landmark agreement.
That’s according to U.S. Traffic Secretary Wilbur Ross, tasked by President Donald Trump to promote negotiations. And while the president suggests he simply wants minor jerks in the arrangement with Canada, his point man foresees substantive changes.
“The Mexicans differentiate, the Canadians know, everybody knows, times are different. We are going to from new trade relations with people,” Ross told a Bloomberg publish interview Wednesday.
“And they all know they’re going to have to win concessions. The only question is what’s the magnitude, and what’s the form of the concessions.”
Ross credited the president for refractory talk that he says has prepared the other countries to make concessions: “He’s turn up tell of my job easier by softening up the adverse parties. What could be better than affluent into a trade negotiation where the fellow on the other side recognizes he has to make concessions?”
Talks to begin near end of year
In the interview, Ross disclosed multiple aspects of his thinking on the upcoming renegotiations of the seminal 1993 understanding with Canada and Mexico.
He answered two lingering questions:
- Will the U.S. aspire only minor administrative changes, or more substantive ones that whim require consultations with Congress, under the rules of so-called fast-track legislation, and then a attest to in Congress? Ross said he intends to involve Congress.
- When choice the U.S. start negotiations, which must follow a 90-day consultation method with Congress? Not right away, he said. The U.S. has yet to get its entire cabinet endorsed, including the U.S. trade representative, who is the legally designated point of contact with Congress.
The U.S. has yet to get its complete cabinet confirmed, including the U.S. trade representative, who is the legally designated time of contact with Congress.
“You’re talking probably the latter part of this year in the forefront real negotiations get underway,” Ross said.
“[Then] I think the settlements hopefully won’t take more than a year.”
Ross said he has an unblock mind on another key question — whether the final deal should be a three-country disposition or two bilateral ones. As for the substance, he says there will be significant variations.
‘There’s a lot to fix’
Ross hopes to add entire new chapters to NAFTA, which currently has 22 chapters. He guessed the additions would reflect the modern digital economy.
“It’s an old treaty. Our thrift is very different from what it was when … that treaty was invaded into,” he said.
“There were some things in [the original] that were dodged. There were things in it that were not done correctly to in with. And a lot of things that might have been OK back then but don’t develop now. So there’s a lot to fix … Several chapters need to be added because of the digital conservatism and other things that have developed subsequently.”
He also intimated at substantive changes on auto parts — significant enough to require a phase-in years as car companies adjust their global supply chains. Ross has fared no secret of his desire to adjust the rules of origin for tariff-free vehicles, to teach auto-parts production closer to home.
What’s unclear is whether his determined target would be limited to Asian parts suppliers, or whether Mexican and Canadian a specifics might also get hit. Ross didn’t elaborate on that.
What he did intimate was that car assemblers might need time to adapt.
“You need to be mindful also of the fill chains that have developed [for auto parts]. And to the degree that a mutation, a geographic transition, is needed, that takes some time.”