Tag Archives: Lighthizer


By Stephen Lande

On the 1st of July, voters in Mexico will go to polls to elect a new president. Both the Mexican and U.S. governments should emphasize the importance of completing at least the substance of a new NAFTA agreement before then.

The Obrador Factor

The danger is that without a full or substantive agreement in place before the end of April or early May at the latest, negotiations will take an electoral hiatus.  If the current, left-wing front runner, Manuel López Obrador, popularly known as AMLO wins, the considerable progress that has already been made in the negotiations will be lost.

He is the candidate who is most skeptical of NAFTA since he supports more self-sufficiency in agriculture by cutting imports from the U.S., and reducing foreign investment in the energy sector. The likelihood of AMLO becoming the next president of Mexico is increasing since the other two candidates are poised to split the opposition vote. Even if one of the two pro-NAFTA candidates – Ricardo Anaya Cortés for the PAN (National Action Party) and José Antonio Meade Kuribreña for the PRI (Institutional Revolutionary Party) were to drop out, AMLO, might still be the winner. All he needs is a plurality. Mexico does not require a runoff. It is also worth noting that AMLO is running as an outsider, and we seem to be living in the age of outsiders. It is outsiders who have been the most recent winners in India, the United States, and France, and they have done extremely well in other European elections, most recently in Germany and Italy.

An AMLO win in the July election in Mexico, however, would not necessarily mean the end of NAFTA. He has not said he would tear it up. If there was a completed agreement in place or even only an agreement on substancewhen he takes office, AMLO may decide to go with it. After all, he will have a host of other priorities for reform in Mexico, and he may not want to get bogged down. It is worth remembering that President Bill Clinton pushed only for cosmetic changes in the original NAFTA, which had been negotiated by his predecessor, the first President Bush – even though in the previous election, he had expressed many misgivings about the draft agreement. In addition, the dislocation brought on by the current renegotiation would only continue and possibly intensify.

On the other hand, if major elements of the revised NAFTA are still unsettled in July, AMLO may want them to reflect his left-wing views. To say the least, those positions would complicate an already difficult negotiation. And even if an agreement under those circumstances were possible, it would probably be less expansionist than the current agreement or the modernized agreement now being negotiated.

Steel and Aluminum Announcement

Any inordinate delay in a negotiation is fraught with danger, as with wine making or mackerel, waiting too long could result in vinegar or stinking fish. Note what happened to the Free Trade Agreement of the Americas and the Doha Round last century and the TPP last year.

The longer the negotiations drag on, the greater the possibility that there will be an intervening event that will prevent a successful conclusion. For example, until last week, there was no question that momentum was building towards an agreement. Then came an announcement on steel and aluminum restrictions which would have a serious impact on Canada. The current indication is that the announcement will not prove fatal to the NAFTA talks since President Trump and his United States Trade Representative (USTR), Ambassador Lighthizer, have indicated that Canada and Mexico would be exempt from restrictions if the modernization negotiations were completed in a few months. In fact, in a strange way this deadline may move the negotiations forward. However, the longer one waits, the greater the chance that an exogenous matter will intervene and derail the process.

Also, the President is under pressure to either conclude the negotiations successfully or withdraw from the agreement. More than one year has elapsed since he assumed office, and he has not yet acted on his electoral commitment to either leave or fix NAFTA. Since the new president of Mexico will not formally assume office until later in 2018 and because it will take time for him and his team to gear up for negotiations, negotiations are not likely to resume until sometime in 2019. Given President Trump’s temperament, it is doubtful that negotiations will be allowed to extend into a third year.

Leave It to The Negotiators

The suggestion here is that, currently, it is best to leave the negotiations to the negotiators. An agreement appears to be within reach, especially between Mexico and the United States. One should not be misled by negotiating statements emphasizing the remaining differences, the slow progress, and the unwillingness of the other NAFTA countries to offer meaningful concessions. This is normal negotiator talk to keep the pressure on the other side to make concessions in the final phases of negotiations.

These tendencies are reinforced by the Trump method of negotiating through attention getting tweets. Although one does not know whether they are part of an overall strategy or simply a whim of the moment, one positive result of the tweeting is that the President demonstrates toughness to his supporters while allowing his negotiators to be flexible.

In point of fact, the negotiators have been the heroes of the day. They were faced with a highly charged political atmosphere at the launch of the negotiations. NAFTA had been widely and strongly criticized, particularly U.S. concessions to Mexico. In the United States, withdrawing from NAFTA was an element in President Trump’s election campaign in 2016, and one frequently mentioned by the President since.

Lighthizer’s Good Work

In this regard, the role of Ambassador Lighthizer should be recognized. Despite having his hands full with a full trade policy agenda, going well beyond NAFTA, he has been able to focus on the NAFTA negotiations. This is even more amazing when one considers that as a result of delays in Congressional approvals of his deputies, he has been forced to operate the agency virtually alone. In the circumstances, he was fortunate that the USTR staff is considered among the most professional and hard-working in Washington, but a large amount of credit is due to the managerial ability of Ambassador Lighthizer himself.

Originally an outsider to the Trump team, he now has the confidence of the President. This may be crucial to concluding the negotiations ¬ when Presidential support of the final package will be critical. If Lighthizer believes the deal meets the campaign criteria for a renegotiated NAFTA, there is a solid chance the President will accept his assessment. Also, Presidential intervention may be required either to sell a compromise to hard-liner Trump supporters or to pressure Mexico or Canada into making final concessions.

The U.S. Private Sector

The private sector – particularly the trade associations – also deserve credit. America’s withdrawal from TPP led to the expectation that it was only a matter of time when NAFTA would be next. The Administration’s statements blaming U.S. job losses on NAFTA suggested that it might be. In short, NAFTA was on life support, with only the smallest chance of recovery. Yet since President Trump’s assumption of office, political support for NAFTA has increased significantly. This is due in large part to the private sector which, by focusing on NAFTA’s constituents in key states, has made everyone – the public and the politicians – aware of the serious dislocations that would follow quickly on the heels of a U.S. withdrawal from NAFTA.

A Guide for Success

It would help now if America’s private sector could shift its focus. So far, the major business groupshave focused on demonstrating the advantages of NAFTA. They have been particularly successful in border and agricultural states, where Trump’s support is strong and withdrawal from NAFTA could undermine his prospects for reelection.

The private sector’s priority now should be urging the Administration to complete the negotiations quickly and getting an agreement in place before the Mexican election. If not, and if the current front runner wins, one of two outcomes appears likely. One is that the differing positions of Presidents AMLO and Trump will make negotiating a modernized agreement impossible. The other is that they cobble together an alternative, new agreement. Such and agreement, however, would inevitably be at a much lower degree of ambition than that which seems possible today.

The building blocks for a successful negotiation are in place. The well-considered negotiating strategy laid out by the lead negotiators, have seen steady progress, notwithstanding the political rhetoric. The negotiators have kept their eyes on the ball. They have moved toward completion of the less disputed chapters and ironed out many of the issues in the more difficult ones. Where the original objective was “do no harm” in the NAFTA negotiations, they have reached the point where a truly improved NAFTA now seems within reach.

This does not mean that successful renegotiations are assured. There is still strong opposition to staying in NAFTA both within the White House and among core Trump constituents. Indeed, recent changes within the White House may have dampened the prospects for a deal.

As for the President, he has yet to move on from his campaign position that “NAFTA’s a horrible deal; we’re renegotiating it. I may terminate NAFTA, I may not – we’ll see what happens. … Any renegotiation must provide a better deal for our workers and companies.” This means the question is still open.

Thus, the private sector’s support for a timely and successful conclusion of negotiations is particularly important. Those in the Administration who argue that NAFTA modernization will meet the President’s goals to make NAFTA more effective in promoting manufacturing and US employment must be reinforced. The challenge for the private sector, of course, is how to support the Administration’s effort to conclude the negotiations while continuing to fight those Administration proposals they oppose.

A three-prong approach is suggested.  In some areas – automotive rules of origin and a sunset clause for example – Canada and Mexico can be relied upon to take the same line as the strongest U.S. business groups. There are other issues, however, issues which are not deal breakers for Mexico and Canada,  where the positions of the U.S. government and America’s leading private sector groups are still far apart. These include U.S. proposals to opt out of investor state dispute settlement (ISDS) and some government procurement obligations.

A second prong could be areas where the U.S. private sector should recognize that there are some issues where the Mexican and Canadian governments will accede to U.S. positions which the U.S. private sector opposes.  The major U.S. trade associations and their members should recognize that they cannot win on all the issues under discussion and my lose on these.  Although they should continue to advocate for their positions, they must send the clear signal that failure to achieve all their goals will not prevent them from supporting a timely conclusion of the agreement.


A third prong could be labor.   It is not clear how hard the U.S. will push for reforms of Mexican labor practices.   If the U.S.  makes changes in Mexican labor practices a make-or-break issue, the private sector should refrain from involving itself in those negotiations.

This may be the time for trade associations and their members to begin considering where they may have to compromise and the best way to alleviate the deleterious impact of measures they oppose. At least in private, they  might consider fallbacks, including compromises and alternative measures.   For example,  a possible fallback for the absence of U.S. to allow third-party arbitration in investor-state disputes could be unilateral Mexican and Canadian commitments to allow such cases to be considered by the World Bank’s arbitration bodies.

Again, the U.S. private sector may have to accept some disappointments, but that would be a small price to pay for getting the NAFTA talks essentially wrapped up in a timely fashion. And who knows: as Lighthizer claims, a compromise on investor-state and labor might bring some added Democratic votes in support of a revised NAFTA. That would be a welcome change from the current situation, where trade bills either pass by the narrowest of votes or languish in legislative limbo because of the partisan divide.


I have not said much about Canada’s role in these negotiations. For the U.S., the talks with Canada are every bit as tough or may even be tougher as the negotiations with Mexico.

US access for dairy exports into Canada and trade remedy arbitration are the best examples of intractable U.S.-Canada issues. But the timeline is not so unforgiving since the U.S.-Canada FTA will continue in effect even if the U.S. withdraws from NAFTA. Let me be clear. I am not advocating this position, but, at the end of the day, it may be necessary.

It would be foolish to just assume that the NAFTA negotiators will in fact manage the kind of success they need. Failure is always a possibility. So, we are left with the adage: “where there’s a will, there’s a way”. Personally, I think the will is there. As for the way, that is not clear yet. It is the job of the negotiators to find it. However, chances of the final agreement being accepted will be strengthened by strong private support of their efforts even if there are cases where private sector demands are not met.

Stephen Lande is the President of Manchester Trade. A former U.S. Foreign Service Officer, he has been involved in international trade since the 1960, was the first Assistant USTR and served as chief bilateral US trade negotiator in the Office of the U.S. Trade Representative.



“We want to claim or reclaim some manufacturing employment that has settled itself in Mexico.”

John Magnus
June 23, 2017


Like our last entry,  today’s is from the preliminary comments made by TradeWins president, John Magnus, acting as a panel moderator at GBD’s June 23 event. Earlier we shared with you his thumbnail estimation of the U.S. trade posture towards the European Union. He offered similar comments on America’s apparent goals for a revised NAFTA. The first round of NAFTA renegotiation got under way in Washington yesterday [June 16], beginning with a fairly challenging opening statement from the U.S. Trade Representative, Ambassador Robert Lighthizer. We shall turn to that in a moment.

First, though, this is as good a time as any to review the assessment that John Magnus offered back in June. “Okay, what about NAFT?,” he asked. These points were his answer:

Content, Rules of Origin. “We apparently would like to wring out non-North American content as fully as possible from the goods that have NAFTA eligibility.”

Jobs. “We want to claim or reclaim some manufacturing employment that has settled itself in Mexico.”

Trade Deficits. “And we would like to have a smaller, bilateral merchandize trade deficit with Mexico.”

Dairy. “We want to extract concession from Canada on some offensive issues, most notably dairy trade. I’ll let you decide what the word offensive modifies in all of that. It could be our behavior in relation to dairy trade.”

Investment and Trade Remedies. “We want to overhaul some of the NAFTA’s institutional provisions and dispute resolution provisions and most notably the ones that sit in chapters 19 and 11”.

Government Procurement. “We want to really have a new or continue our new mania for Buy American, meaning that we want to, apparently, refrain from deepening the NAFTA in regard to government procurement. And that matters because our NAFTA partners have some interesting requests and proposals in that category.”

The Cases. “And we seem to want to continue to treat even the highest profile trade remedy proceedings – examples: softwood lumber for Canada, sugar for Mexico – as basically matters of pure law enforcement as opposed to some part of our trade policy that we would be prepared to bargain over.”


Doubtless you have already read or read about Ambassador Lighthizer’s opening statement yesterday. Certainly, it was important, but its importance is bound to fade somewhat as the negotiations — and all that is said and written about them — move on to specific issues. But while it is still fresh, here are a few thoughts on the statement and on the negotiations now in their second day.

First, of course it was a tough statement. It had to be. It was the United States that called for these negotiations, and in a sense that was a fallback from President Trump’s threat to withdraw from NAFTA, to tear it up. And the essential toughness of the statement was in this paragraph:

“The views of the President about NAFTA, which I completely share, are well known. I want to be clear that he is not interested in a mere tweaking of a few provisions and an a couple of updated chapters. We feel that NAFTA has fundamentally failed many, many Americans and needs major improvement.”

That was near the end of his statement. The beginning was somewhat different. There he talked about the many Americans who have benefited from NAFTA. “For many of our farmers and ranchers,” he said, “Canada and Mexico are their largest export markets.” And, he added, “Many are particularly vulnerable today because of low commodity prices.”


In short, at least as we read it, it was a tough speech with a major concession: America too needs NAFTA. Yes, there is some leverage in the belief if not the fact that the other two, Canada and Mexico, need NAFTA more. But America needs it. Think of NAFTA as a leaky lifeboat in an unforgiving sea. It’s three occupants — Canada, Mexico, and the United States — may have, will have, trouble agreeing on the best way to patch it. But agree they must. Scuttling it is unthinkable (or should be).

Much as we would like to end on that rhetorical flourish, it doesn’t quite capture the larger point. NAFTA may have been a mistake. A better set of policies set in motion in the 1990s might have preserved more U.S. manufacturing jobs and led to a stronger U.S. industrial base. The challenge for today’s NAFTA negotiators, however, isn’t to rewrite the 1990s. That can’t be done. Their challenge it is to improve a system that is now deeply embedded in the economies of all three countries and to do so without disrupting the lives and livelihoods of those who have successfully adapted to it.


An Educated Guess is a link to the YouTube video of the Diplomatic Panel at the GBD EU Outreach event on June. This was the source of today’s featured quote.

Opening Statement takes you to Ambassador Lighthizer opening statement at the start of the first round of negotiations toward and an updated and revised NAFTA.

Objectives is a link the U.S. negotiating objectives for the new NAFTA negotiations, which USTR published on July 17, 2017.

About Dairy is the TTALK Quote for June 14, 2017, which focuses on the issue dairy in U.S.-Canada trade, beginning with comments from Shawna Morris of the U.S. Dairy Export Council.

Originally published on Augusut 17 as TTALK Quote No. 51 of 2017.

© 2017 The Global Business Dialogue, Inc.




“President Trump continues to fulfill his promise to renegotiate NAFTA to get a much better deal for all Americans.”

Robert Lighthizer
July 17, 2017


This is a NAFTA week in Washington. We use the indefinite article “a” rather than “the,” because there have been others and there will be more. But this is an important one. On Monday (July 17), the United States Trade Representative, Ambassador Robert Lighthizer “released a detailed and comprehensive summary of the negotiating objectives for the renegotiation of the North American Free Trade Agreement (NAFTA).” Yesterday, July 18, the House Committee on Ways and Means held a hearing on the modernization of NAFTA, and on Thursday, July 20, WITA, the Washington International Trade Association, will begin its NAFTA series.

Today’s featured quote is from the USTR press release announcing the publication of their NAFTA negotiating objectives. Here is the full quote:

“President Trump continues to fulfill his promise to renegotiate NAFTA to get a much better deal for all Americans. Too many Americans have been hurt by closed factories, exported jobs, and broken political promises. Under President Trump’s leadership, USTR will negotiate a fair deal. We will seek to address America’s persistent trade imbalances, break down trade barriers, and give Americans new opportunities to grow their exports. President Trump is reclaiming American prosperity and making our country great again.”


So what are America’s negotiating objectives for NAFTA? Well, by our count, there are 159, including items and subsets of items in each category. And there are 22 categories from trade in goods to currency as follows:

Trade in Goods
Sanitary and Phytosanitary Measures (SPS)
Customs, Trade Facilitation, and Rules of Origin
Technical Barriers to Trade (TBT)
Good Regulatory Practices
Trade in Services, Including Telecommunication and Financial Services
Digital Trade in Goods and Services and Cross-Border Flows
Intellectual Property
State-Owned and Controlled Enterprises
Competition Policy
Trade Remedies
Government Procurement
Small- and Medium-Sized Enterprises
Dispute Settlement
General Provisions


The Sting, which came out in 1973, was the second great movie starring Paul Newman and Robert Redford. The first, of course, was Butch Cassidy and the Sundance Kid in 1969, but it is The Sting we want to talk about because it has a moral, sort of, which is applicable here, sort of.

The title of the film may have been “the sting,” but if there is a single word that dominates the film it is “con.” It is a rich word, and no single synonym really sums it up, but “swindle” comes close. Newman’s character, Henry Gondorff, is the more seasoned con man. Redford’s character, Johnny Hooker, more the apprentice. The wonderfully mean character they want to swindle is Doyle Lonnegan, played by Robert Shaw.

Relatively early on Newman offers this advice:

“You gotta keep Lonnegan’s con, even after you spent his money.”

It is good advice and doesn’t just apply to dishonest transactions. As most good salesmen will tell you — reinforced by their company’s advertising — “Your last purchase with us was a great investment (just as your next one will be).”

NAFTA’s big problem was that really no effort was ever made to keep the con of the American electorate after the deal was done. There are several strands to that rope. One of them, of course, is that no one was elected to negotiate an FTA with Mexico, the new element of NAFTA. A second is that a third party candidate, H. Ross Perot, managed to garner a whopping 18.9 percent of the popular vote by running against NAFTA in the presidential election that came after NAFTA had largely been negotiated but before it was implemented. That was in 1992.

There is one more strand that needs to be mentioned. It is just as real but harder to put your finger on than the other two. And it is this. Over the last century, American politicians have regrettably been increasingly quite successful in their efforts to shield the public from unpleasantness, especially unpleasantness that might hurt candidates at the ballot box. In the Vietnam War, they first gave the middle class draft deferments and then went to an all volunteer Army. In the environmental arena, it was polluter pays. Citizens need not worry. The companies would take care of it. And as for NAFTA, well, people don’t like it. So we won’t talk about it.

Whatever one might think of candidate Trump’s extreme anti-NAFTA language, it provoked a national conversation, and that conversation has, among other things, begun to bring out just how important NAFTA has become to the United States. Earlier TTALK Quotes took note of some of the sectors that have become highly dependent on the North American and particularly the Mexican market over the course of the last 23 years. Later today, we will highlight another such sector, namely U.S. pork producers.

Our impression is that these discussions have begun to reshape the public’s view of NAFTA, and they have clearly had a demonstrably salutary effect on policy. The widely shared first and, we think, accurate impression of the NAFTA negotiating objectives published by USTR on Monday is that they are indeed designed to upgrade and improve a valuable agreement and not, as many feared, to destroy it. That is not to say that these objectives are not ambitious. They are. Nor is it to say that the negotiations that are set to begin next month will not be tough. They will be. There is also every reason to believe, however, that in the end they will  be successful.

We will conclude this entry with something Nick Giordano of the National Pork Producers Council said at the GBD NAFTA event on May 25. It was during the final Q&A session.. A reporter asked what would happen if the negotiations failed. Mr. Giordano said he thought a genuine failure of the talks, an end to NAFTA, would trigger a farm crisis in the United States. The heart of his response, however, was more positive. He said:

“The way I look at this, North America is the low-cost production platform for agriculture — really for manufacturing as well. So the opportunity… There’s opportunity all over the world, but the greatest opportunity is in the Asia Pacific Region. It’s in Asia. They need our [North American] products there. And so, we benefit by working together. We benefit by further harmonizing our standards. …”



NAFTA Objectives Announced is a link to the  July 17, press release from USTR on the newly published U.S. negotiating objectives for an updated and improved North American Free Trade Agreement. This includes the statement from Ambassador Lighthizer that is today’s featured quote.

The Objectives is a link to USTR’s summary of the U.S. negotiating objectives for the upcoming NAFTA negotiations.

WITA Series takes you to the page of the website of the Washington International Trade Association with details for WITA’s upcoming NAFTA series.

Dairy and NAFTA is a link to the TTALK quote for June 14, which deal with this issue.

From Cars to Carrots is the YouTube video recording of the agricultural panel’s presentations, including the Q&A, at GBD’s NAFTA event on May 25, 2017.

Orginally published on July 19, 2017 as TTALK Quote No. 43
© 2017 The Global Business Dialogue, Inc.