By: MEGAN CASSELLA
Canada and Mexico pushed back Thursday against a U.S. proposal to incorporate a provision in NAFTA 2.0 that would automatically terminate the trade agreement after five years unless all three countries agree before then to renew it.
The Office of the U.S. Trade Representative began circulating the so-called “sunset” provision among U.S. government agencies late last week — as POLITICO first reported on Thursday — in anticipation of formally proposing it at the third round of NAFTA negotiations, slated to begin next weekend in Ottawa.
But David MacNaughton, Canada’s ambassador to the United States, criticized the idea, citing not only Canadian concerns, but also those he said were sure to emerge from U.S. businesses.
One of the reasons countries establish trade agreements in the first place is to “create an environment within which business can make investments, and in many of those investments people look for 20, 25 years for payback,” MacNaughton said at the POLITICO Pro Policy Summit in Washington, D.C., this afternoon. He added that the Trump administration “may get some pushback from U.S. businesses, who are saying, ‘My goodness, how do we make a 20-, 25-, 30-year investment when it could be overturned in five years?’”
A USTR spokeswoman declined to comment on Wednesday night after sources told POLITICO the proposal was being considered, but Commerce Secretary Wilbur Ross confirmed on Thursday that both he and USTR Robert Lighthizer “have been in favor of this concept for quite awhile.”
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