Trump to Seek Limited Changes to NAFTA

The Trump administration is seeking mainly limited changes to the North American Free Trade Agreement with Mexico and Canada, the Wall Street Journal reported on Thursday, citing an administrative draft proposal circulated in Congress by the Office of the U.S. Trade Representative.

Under the changes, proposed after President Donald Trump called the pact a “disaster” during the election campaign, Washington would keep some of NAFTA’s most controversial provisions, including arbitration panels that let investors in the three nations circumvent local courts to resolve civil claims, the Journal said.

Some critics say these entities infringe on national sovereignty.

The draft proposal, reviewed by the newspaper, seeks to improve these bodies’ procedures to resolve disputes.

One potential major change, however, is a recommendation to allow a NAFTA nation to reinstate tariffs in case a flood of imports causes serious injury or threat of serious injury to domestic industries, the Journal reported.

Another draft objective says the administration wants to establish rules that require government procurement to be conducted in a manner that is consistent with U.S. law and the administrations policy on domestic procurement preferences, the paper reported.

This could allow for Trumps Buy American plan, but also cause U.S. companies to lose business in Mexico and Canada.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza