Good day,
The long-awaited U.S. outline for the goals of a renegotiation of NAFTA has been unveiled, and there are few surprises in the 17-page document. Basically, the document outlines the U.S. top priority of shrinking trade deficits with Canada and Mexico. U.S. Trade Representative Robert Lighthizer said the goal would be to improve access to U.S. goods.
Talks are expected to be begin in August.
The document does not call for punitive tariffs, which is notable as the U.S. and Canada are currently fighting over the export of Canadian softwood.
Several experts, though, believe the focus on bilateral trade deficits does not take into consideration the global economy.
“The first bullet point shows their preoccupation with bilateral trade deficits and that’s unfortunate,” Chad Bown, a senior fellow and trade expert at the Peterson Institute for International Economics, told Reuters. “There’s not much that trade policy and trade agreements can do to change those. That’s more of a macroeconomic issue.”
Lighthizer also called for the elimination of a trade dispute mechanism that he said prohibits the U.S. from seeking anti-dumping and anti-subsidy cases against Canadian and Mexican companies. It also seeks to strengthen “rules of origin” to incentivize the sourcing of U.S. goods.
Did you know?
The U.S. trade deficit with Canada in 2016 was $11 billion and with Mexico it was $63 billion. The largest trade deficit is with China, $347 billion.
Quotable:
“We will do everything we can to make this a good agreement and to hold the president at his word and make sure we get a renegotiation.”
– Richard Trumka, AFL-CIO president, on NAFTA talks
In other news:
House committee proposes cut to DOT spending
The House subcommittee on Transportation, Housing and Urban Development has put forth a $17.8 billion bill for DOT discretionary spending. That is $646 million less than the current levels, but is $1.5 billion more than President Trump requested. (The Hill)
Reward the good
A panel of academic experts are suggesting that FMCSA’s CSA program should include reporting for drivers and trucks with clean inspections, giving them credit for having no violations. (Transport Topics)
GAO report blasts FMCSA
A new report from the Government Accountability Office says FMCSA is not effectively using its budgetary funds, fails to meet users’ needs, has not completed its IT modernization plan and has too many open positions. (Fleet Owner)
Earnings reports being watched closely
As earnings reports for the second quarter come out this week and next, analysts are looking for signs that increased demand in freight will continue and boost the economy. (Wall Street Journal)
Trailer orders up
June trailer orders climbed 50% over last June and are up 14% from May, according to the latest data from ACT Research. (Trucknews.com)
Final Thoughts
The 17-page document outlining the U.S. priorities in the upcoming NAFTA negotiations lays the groundwork for what the administration will be looking for. As with any negotiations, though, the final product will likely be far from the original document, so U.S. companies at this point should take any talk with a grain of salt.
Hammer down everyone!
