CEOs Urge Donald Trump to Limit Scope of Nafta Changes to an 'Update' -- Update
May 26 2017 - 10:05AM
Dow Jones News
By William Mauldin
A group of top CEOs has a message for President Donald Trump:
Move quickly on an update of the North American Free Trade
Agreement but don't mess with the underlying structure.
In a letter to the White House, the top executives of 32 major
companies emphasized the benefits they currently get from Nafta.
However, they said, they are willing to work with the
administration on a "modernization" of the deal that keeps its
three-way structure with Mexico and Canada, rather than on an
overhaul that starts from scratch.
The executives' letter follows the Trump administration's
notification to Congress last week that it plans to begin, as soon
as August, negotiations on the 23-year-old trade agreement, which
eliminates tariffs and sets the rules for trade among the three
countries.
The letter's signatories include David MacLennan, chief
executive of Cargill Inc., which benefits from duty-free
agricultural sales to Mexico and Canada; Lance Fritz, chief
executive of Union Pacific Corp., which handles about 70% of rail
volume traveling to and from Mexico; and Steven Rendle, chief
executive of VF Corp., the global apparel and footwear giant that
imports many brands bought by American consumers.
"While this remains open, it creates an environment of
uncertainty," said Evan Greenberg, chief executive of insurer Chubb
Ltd. "To bring it to a thoughtful conclusion among all three
parties is important," he said, adding that Nafta allowed the
company to expand and become a dominant insurer in Mexico.
The letter was written as an expression of support for the
effort but contained a clear warning against harming a pact that
the CEOs say supports 14 million American jobs and a trading volume
of more than $3.5 billion daily.
"We encourage the administration to proceed quickly and
trilaterally," the executives said. "Uncertainty about the future
of America's terms of trade with Canada and Mexico would suppress
economic growth and may cause political reactions that undermine
U.S. exporters."
Mr. Trump has at various times backed everything from a
"tweaking" of U.S. trading with Canada and Mexico to a "massive"
renegotiation, and he has brought attention to longstanding
agricultural battles that could complicate the talks.
Robert Lighthizer, the newly confirmed U.S. trade
representative, said last week that the administration would seek
to preserve the current structure of Nafta. But he didn't make any
guarantees and said many issues would be handled bilaterally.
Mr. Lighthizer sent Congress an official notification for Nafta
talks last week, meaning officials are required under a 2015 trade
law to submit in the next two months a set of negotiating
objectives, according to guidelines set by Congress.
The executives on Thursday backed adhering to the guidelines
Congress set in the 2015 law, which allows fast-track approval by
Congress of trade deals.
Mr. Trump faces political challenges in negotiating and winning
congressional passage of a deal. Most Republican lawmakers -- with
the backing of businesses, including the ones that signed
Thursday's letter -- don't want sweeping changes to the pact.
But most Democratic lawmakers, labor groups and much of Mr.
Trump's political base want to add new features to balance trade
with Mexico as part of the renegotiations for Nafta, which Mr.
Trump called a "disaster" in the 2016 campaign.
Write to William Mauldin at william.mauldin@wsj.com
(END) Dow Jones Newswires
May 26, 2017 09:50 ET (13:50 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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