USMCOC SUBMITS COMMENTS TO THE U.S. TRADE REPRESENTATIVE ON NEGOTIATING OBJECTIVES REGARDING MODERNIZATION OF NAFTA

June 8, 2017. – Irving, TX. In response to the Office of the U.S. Trade Representative Request for Comments on Negotiation Objectives Regarding Modernization of the North American Free Trade Agreement with Canada and Mexico, the United States-Chamber of Commerce submitted the recommendations developed by the USMCOC North American Working Group, along with a notification of intent to testify during the public hearing to be held on June 27, 2017 in Washington, D.C.

Below a summary of the testimony and comments submitted to the USTR.

In 2014, the U.S.-Mexico Chamber of Commerce began to look more closely and analyze how the economies of North America were evolving and integrating, and the extent to which key sectors were meeting global challenges, including energy, technology, security, manufacturing, supply chains and logistics. As a result, the Chamber began to focus its attention on this evolution, creating and organizing activities and initiatives to address the challenges of a changing economic, security and trading landscape. The Chamber has been organizing events to convene principal stakeholders from the private and public sectors in North America to review these issues and challenges, such as the North American Sustainable Economic Development Summit.

The 2016 Presidential Elections in the U.S., especially the heightened focus and debate on the impact of international trade, immigration and the growing concern relative to cyber and physical security in the hemisphere, prompted the Chamber and the Foundation to highlight the need to document its research activities and recommendations in this regard, hence the North American Working Group initiative.
The U.S.-Mexico Chamber announced in late 2016 the formation of the North American Working Group, (NAWG) inviting from its own board of directors senior level executives in key sectors to participate in this important initiative, and received favorable and enthusiastic agreement from them to collaborate. Similarly, former policy makers were also invited and agreed to participate.

This report and its recommendations have been compiled based on the ongoing work and collaboration of the Working Group, plus meetings undertaken in The Woodlands, TX; Mexico City; Monterrey; Saltillo; and Plano, TX.

Trade in North America from Panama to the Arctic has seen dramatic changes in the last 20 years, creating the world’s largest free trade area with 450 million people producing $17 trillion in goods and services annually. Now we must address the North American context in today’s challenges of securing the safety and efficient movement of goods and people, with considerations for a workforce that is justly treated and compensated among the NAFTA partners, and availing the necessary leading edge technology.

The success of NAFTA and its impact on the U.S. economy cannot be refuted, with tri-national trade up by 245% since 1993. The U.S. is $127 billion richer each year due to the “extra” trade growth that results from the cooperation of the NAFTA partnerships. As an example, Mexico is the largest market for the U.S. in energy while Canada is the biggest energy supplier, creating a combined $100 billion in energy goods and commodities. In 2016 the U.S. exported $231 billion to Mexico, which is more than it did to the UK, Germany, France and Italy combined, and nearly twice as much as it did to China. In agriculture, NAFTA provides the third largest destination for American grown produce and crops.

It is also telling to note that the current $500 billion trade gap was created by the relocation of American manufacturing and technology based business out of the NAFTA partnership. China accounts for more than 60% of the U.S. trade deficit, and petroleum accounts for more than a quarter of the balance.
The Working Group’s recommendations include:

• Protecting the U.S. and Mexico trade positions by creating an innovative SMART Border, leveraging technology, achieving an energy balance, reviewing trade agreements, and workforce optimization in technology.
• Implementing a Smart Border to provide essential security, improve efficiency an ensure the smooth and timely transport of goods and persons through the borders
• With regard to IT, developing and implementing platforms to achieve efficiencies in national and border security (physical and cyber), trade and the safe and effective trans-border movements of people and cargo;
• Achieving supply chain efficiencies with continued evolution of a shared economy with respect to trusted trader programs, pre-clearance programs, improvements in innovation and infrastructure;
• Developing priorities and need relative to other international agreements,
• Pursuing Public/Private Partnerships to ignite mobile digital learning, skills development and job training, and expanding innovative financing to drive growth in all sectors.

The USMCOC also submitted the complete North American Working Group report, dated May 24, 2017.

To view the full version of the comments submitted by the Chamber please go to:

https://www.regulations.gov/document?D=USTR-2017-0006-0001