Trump takes first step in NAFTA renegotiation: Sends draft letter to Congress

The report also illustrates how globalization has virtually pitted Mexico against China for access to the USA import market, placing Mexico at a disadvantage due to Beijing's intervention in the economy.

In revamping the North American Free Trade Agreement (NAFTA), the Trump administration will seek tax equality and the ability to reimpose tariffs if a flood of imports from Canada and Mexico causes "a threat of serious injury" to USA industry, a draft of negotiating objectives shows. But it appears to keep much of the existing agreement in place, including private tribunals that allow companies to challenge national laws on the grounds that they inhibit trade - a provision that critics say allows companies to get around environmental and labour laws.

Trump has said that if Mexico does not agree to the U.S.'s demands in the renegotiations, he would likely withdraw from NAFTA.

"There's no change in our thinking", Ross told CNBC.

NAFTA was signed by the United States, Mexico and Canada in 1994 to facilitate the trade between the three countries.

The move was widely expected since Trump once called NAFTA the "worst trade deal in history".




"The language is soft".

For instance, the letter said the president wants to revamp rules on government contracts to allow the USA government to insist that US contractors do more to "buy American" while nudging the Mexican and Canadian governments to buy more USA products, too.

The eight-page letter outlines a number of categories where the USA will seek changes to NAFTA.

At first glance, the administration's plan looks like more than just a tweak to NAFTA, but will not come close to blowing up the system (as it sometimes sounded like during the campaign). It notes that Canada and Mexico are "among the largest export markets for [U.S.] manufacturing". The letter states that a goal of new talks is to boost manufacturers' profits "within the trading bloc".

Outside of the president's own fiery rhetoric, congressional staffers have said it's unclear precisely which administration officials are setting the agenda on trade. Robert Lighthizer, who Trump has tapped as top Trade Representative, is awaiting Senate confirmation.

White House press secretary Sean Spicer said Thursday the document is "not a statement of administration policy", Politico reported.

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