Agriculture Outcomes a Wild Card in NAFTA Negotiations, Lobbyist Tells Brokers and Forwarders
Agricultural trade could have a greater chance than other sectors in North America of being reshaped through NAFTA renegotiations, National Customs Brokers & Forwarders Association of America (NCBFAA) lobbyist Jon Kent said July 11 during a webinar. “That’s, I think, where we’re most concerned about maintaining the status quo, and there’s a reasonable amount of contention between all three countries” party to the agreement, Kent said. Promoting free data flows will be another major issue of renegotiation, and the high-tech industry is likely to weigh in “very affirmatively” on the topic, but the U.S. will seek to adjust several parts of the agreement merely “around the edges,” he said.
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The Trump administration is probably sorting through three days' worth of June stakeholder testimony on their hoped-for renegotiation objectives (see 1706270047, 1706270074, and 1706290045), and “taking stock” of the interests at play, before submitting the objectives to Congress, Kent said. In the meantime, “I think everyone is keeping their cards close to their vest” as far as NAFTA plans. Trade Promotion Authority requires the administration to submit negotiating objectives for trade agreements to Congress at least 30 days before talks formally start. The administration has stated that it intends to start renegotiating NAFTA as early as Aug. 16 (see 1705180043), in which case it would legally have to send the objectives to Congress by the end of July 17 at the latest. U.S. Trade Representative Robert Lighthizer formally notified Congress on May 18 of the Trump administration’s intention to start renegotiating NAFTA, starting a 90-day clock before formal negotiations can begin (see 1705180043). It might not be easy to track the substance of talks after they start, as Kent said that the Office of the U.S. Trade Representative and other involved federal agencies “typically like to stay pretty mum” during negotiations.
Broadly speaking, administration trade policy will reveal itself on a “case-by-case basis,” with a more hawkish approach to certain issues and a more “moderated” approach to others, Kent said. Outside of NAFTA, another important legislative issue is ACE funding, as CBP’s fiscal year 2018 budget requested an increase of $45.1 million for “ACE Core Functionality” (see 1705250030), NCBFAA Legislative Committee Chairman Charles Riley said during the webinar. “Originally, [CBP] had the funding to be able to initiate ACE, but they did not have any funding for ongoing corrections to ACE,” Riley said. “So that’s going to be something big.” The House Appropriations Homeland Security Subcommittee is scheduled to mark up its FY18 spending legislation on July 12 (here).
Further into 2017, expected miscellaneous tariff bill (MTB) and Generalized System of Preferences (GSP) legislation will present a “reality check” for an administration that champions domestic manufacturing, Kent said. The U.S. isn’t capable of manufacturing all of the products and needed inputs that have received benefits under those programs, and the administration will face the question of whether the programs would “compromise” its drive for more U.S. production, he said. “Frankly, I think GSP and MTBs will move along without a lot of consternation, but we shall see there.” Congress is shooting to complete consideration of MTB legislation in November or December, Kent said. Trade groups have flagged anticipated MTB legislation as a potential renewal vehicle for GSP, which expires Dec. 31 (see 1706200050).