U.S. business lobby joins Canada and Mexico counterparts in call to uphold NAFTA

Share

One of the U.S.'s largest business lobbies is joining forces with its Canadian and Mexican counterparts in a united front aimed at pushing President Donald Trump to preserve the North American free-trade agreement.

Leaders of the U.S. Chamber of Commerce on Tuesday hunkered down at Washington's St. Regis Hotel with representatives of the Canadian Chamber of Commerce and Mexico's Consejo Coordinador Empresarial to plan strategy ahead of the NAFTA renegotiations this summer. The three organizations will be launching the North American Economic Alliance, a common front to champion the trade deal and push for continental economic integration.

In a joint op-ed, the leaders of the three groups call on the Trump administration and its negotiating partners to build on the current pact and keep its open markets in place, rather than tearing it up and starting over. The missive also calls for the deal to remain trilateral – as opposed to the U.S. doing separate deals with Canada and Mexico – and for the negotiations to unfold swiftly.

Read more: Tough trade: What Canada can learn from NAFTA's flaws

Read more: As NAFTA negotiations loom, Mexico faces a pivotal moment

Read more: In this Tennessee town, NAFTA is a dirty word

"Any effort to update NAFTA must not undermine the strong foundation that already exists. Put simply, we must 'do no harm,'" says the document, signed by U.S. Chamber CEO Thomas J. Donohue, and his Canadian and Mexican counterparts, Perrin Beatty and Juan Pablo Castanon. "We should not disrupt the $1.3-trillion [U.S.] in annual trade that crosses our borders."

Mr. Trump was elected in part on a pledge to overhaul NAFTA, which he blames for hollowing out U.S. manufacturing. He has dubbed it "a disaster," and accused Canada and Mexico of using the agreement to "take advantage" of the United States. Last month, he delivered 90 days' notice to Congress of intent to renegotiate the deal, allowing talks to start in mid-August.

The op-ed is a further sign that U.S. industry is lining up with Canada and Mexico, which both want to keep as much of the deal as possible intact. The strategy is to divert NAFTA talks into ways to update the current deal and open markets further, rather than allowing the United States to turn back the clock to a time of greater protectionism.

The U.S. Chamber of Commerce claims three million members. The organization and its subsidiaries spent more than $100-million (U.S.) on federal lobbying last year, according to figures compiled by the Center for Responsive Politics. Among the multinationals that took part in Tuesday's talks were courier companies FedEx and UPS, and Tenaris, which builds pipelines for the oil industry.

Getting U.S. business onside is viewed by Canada as a key way to stop the White House from tearing up NAFTA.

"It's sending a very strong signal within the United States to the U.S. administration that NAFTA is good for all three countries," Mr. Beatty said in an interview.

A contingent of Canadian premiers, including Ontario's Kathleen Wynne and Brian Pallister of Manitoba, attended the Chamber of Commerce meeting Tuesday. Ms. Wynne was also scheduled to meet Wednesday with several Trump advisers – including Stephen Schwarzman and United States Trade Representative counsel Stephen Vaughn – along with sundry senators.

The Tuesday meeting also included the signing of a deal between U.S. Commerce Secretary Wilbur Ross, Mr. Trump's NAFTA point man, and Mexican counterpart Ildefonso Guajardo Villarreal to resolve a trade dispute related to sugar. The move is a good sign for NAFTA talks, as it takes an issue of contention off the table before the negotiations begin.

American business has flexed its muscle in favour of NAFTA previously. In April, when Mr. Trump was said to be mulling an executive order to kick-start the process of pulling out of the pact, U.S. companies bombarded the White House with requests not to go through with it. The agriculture sector, which is heavily dependent on the Mexican export market, was particularly vocal.

Mr. Beatty said business would like to see the framework of NAFTA remain in place, with some of the provisions of the Trans-Pacific Partnership layered on top. This would include, for example, adding language covering e-commerce, which was not contemplated when NAFTA came into force in 1994. The TPP was a 12-country deal from which Mr. Trump pulled out in the first week of his presidency.

"We can make the deal stronger and better. A lot of that work was done with TPP – it created a more robust structure," he said.

Mr. Beatty said the North American Economic Alliance will also look beyond the negotiations themselves to tackle the anti-free-trade sentiment that flared up during last year's U.S. election. He said he planned to continue travelling in the United States, meeting with governors, mayors and local chambers of commerce to impress upon them how much they benefit from having open markets under NAFTA.

"It was very clear in 2016 there was a significant issue related to trade. We need to make people aware of the benefits of trade," he said, adding that many Americans simply do not know how many Canadian companies have set up shop in the United States. "The Canadian presence is ubiquitous but it's not conspicuous."