Harmony in the private sector on NAFTA priorities

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Politico | 17 May 2017

Harmony in the private sector on NAFTA priorities

By MEGAN CASSELLA

That’s the ultimate goal, at least, of top industry groups in both the United States and Mexico that are planning weekly conference calls and bi-weekly face-to-face meetings to align their priorities ahead of the upcoming NAFTA renegotiation. The idea is to bring groups like the Chamber of Commerce, the National Association of Manufacturers and the American Farm Bureau Federation together with their Mexican counterparts to establish a common agenda before talks begin, said Moises Kalach, a Mexico City-based businessman who leads private-sector engagement with the Mexican government on trade issues.

“You can propose to both governments, and even Canada if it’s included : This is what the industry wants, this is what the ag community or the sector wants, and I think it helps a lot,” he said, adding that agricultural and manufacturing groups already tend to agree on “90 to 95 percent” of the issues. “It makes it easier when we’re aligned, and the private sector tells the governments what we want together in NAFTA.”

Kalach said the cooperation is currently much closer between the Mexican and U.S. industries, but that they want to pull the Canadians in closer as well. “We should have done this years back, because if we do this right, when the next — hopefully there’s not a next — but when the next renegotiation of NAFTA comes up, you’ll have hundreds of different sectors saying, ‘We’re doing fine and this is working ; we don’t need many changes,’” he said.

Industries are pushing to mostly maintain the status quo in NAFTA, Kalach added, emphasizing to both governments that they would prefer a few tweaks rather than a broader renegotiation. Some sectors say areas that could use changes include enforcement, which should be tougher, and digital trade and e-commerce, which were not addressed in the original deal.

In the event that government officials attempt to make changes that the industries worry could be harmful — tightening rules of origin, for example — groups are gathering data to be able to point out product by product what the effects would be. Led in part by Herminio Blanco, Mexico’s chief NAFTA negotiator, analysts are working to evaluate things like how supply chains would be affected and how much rules of origin can be tightened before they would lose competitiveness compared to other markets, particularly in Asia.

Taking a cue from sugar talks

Industry and private-sector officials are watching ongoing discussions surrounding a sugar dispute between the U.S. and Mexico closely, Kalach added, because they consider those talks a “lab example of how things are going to work” in the NAFTA renegotiation.

“We think it’s a first stage of what’s coming for NAFTA,” he said. “I think it’s setting the tone … and hopefully we can agree to something that benefits both industries, both countries.”

source: Politico