Escalating tensions between the U.S. and Mexico threatened to put the North American Free Trade Agreement (NAFTA) at risk for the first time since its birth in 1994. On January 26, Mexican President Enrique Peña Nieto announced his decision to cancel Mexico’s participation in the ‘three amigos’ meeting in Washington, D.C. The purpose of the planned meeting between the U.S., Mexico, and Canada was to discuss their current trade relationship, including the possibility of renegotiating NAFTA.

Following cancellation of the presidential summit, however, President Trump and President Peña Nieto spoke by phone on January 27 in an effort to put the bruised bilateral relationship back on track. The two leaders agreed not to talk publicly about “the wall” between Mexico and the U.S., or how it would be ultimately financed. Mexico’s Secretariat of Economy soon published a notice that it was proceeding with a 90-day consultation period with Mexican companies, to determine priorities from Mexico’s point of view for renegotiating NAFTA. Mexico is also pursuing a parallel renegotiation of its free trade agreement with the European Union.

Although the Trump administration has not as yet issued any notice calling for consultations or public comments from interested parties about NAFTA, President Trump remarked to members of the House Ways and Means and Senate Finance Committees in a meeting at the White House on February 2 that he hoped to accelerate discussions with Mexico and Canada on reworking NAFTA. All indications are that President Trump seems focused on renegotiating NAFTA – and perhaps even rebranding it – but not withdrawing from the agreement.

The prospect of renegotiating NAFTA raises a number of possible issues, including efforts by the Trump administration to develop certain “model approaches” to trade issues in NAFTA that could then be applied in subsequent negotiations with other partners. Examples of issues likely to be prominent in the Trump administration’s thinking are rules of origin for the auto sector and possibly textiles and apparel, disciplines over the production of steel and aluminum to prevent over capacity in the market, and rules governing trade in the North American energy sector. Details await the confirmations of Secretary of Commerce-designate Wilbur Ross and USTR-designate Robert Lighthizer. House Ways and Means Ranking Member Richard Neal (D-MA) has already mentioned including provisions on currency manipulation, and incorporating articles on labor and the environment in the NAFTA text.

American business will need to provide views to shape such proposals and minimize disruptions to North American supply chains.

For more information, contact: Melissa Morris, Patricia Wu, John Brew, Daniel Cannistra, Eduardo Mathison

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Photo of Daniel Cannistra Daniel Cannistra

Dan Cannistra is a partner in the firm’s Washington, D.C. office. His practice focuses on legislative, executive and regulatory representation of domestic and international clients on a broad spectrum of international trade matters. Dan has represented domestic and foreign companies in over 75

Dan Cannistra is a partner in the firm’s Washington, D.C. office. His practice focuses on legislative, executive and regulatory representation of domestic and international clients on a broad spectrum of international trade matters. Dan has represented domestic and foreign companies in over 75 U.S. antidumping and countervailing duty cases before the U.S. Department of Commerce and the U.S. International Trade Commission under the Tariff Act of 1930. Many of these matters involved appeals to the U.S. Court of International Trade, the U.S. Court of Appeals for the Federal Circuit, binational panels under the North American Free Trade Agreement (NAFTA), and dispute settlement proceedings before the World Trade Organization (WTO). Dan has also represented clients in antidumping proceedings in the European Union, Canada, Mexico, Brazil, India, Thailand, Singapore, Guatemala and Taiwan.

Prior to joining Crowell & Moring, Dan was a director in a national accounting firm providing customs and international trade guidance to multinational clients related to the supply and distribution of goods and services across international borders. Areas of specialization included antidumping and countervailing duties and policy, trade remedies and litigation, free trade agreements and negotiations, classification and valuation, and international trade and development.

Dan’s government appointments include service to U.S. Trade Representative on the roster of international trade practitioners to resolve antidumping disputes involving NAFTA members. For the European Commission, Dan provided advice and training on international trade and antidumping methodology and practice. In addition, Dan has served as an international trade consultant to the governments of Guatemala and Singapore, providing technical advice to these governments on the application of international trade regulations consistent with international law and World Trade Organization agreements and the General Agreement on Tariffs and Trade, Agreement on Antidumping.

Photo of John Brew John Brew

John Brew is the co-chair of Crowell & Moring’s International Trade Group and a partner in the firm’s Washington, D.C. office. He has extensive experience in import and export trade regulation, and he regularly advises corporations, trade associations, foreign governments, and non-governmental organizations…

John Brew is the co-chair of Crowell & Moring’s International Trade Group and a partner in the firm’s Washington, D.C. office. He has extensive experience in import and export trade regulation, and he regularly advises corporations, trade associations, foreign governments, and non-governmental organizations on matters involving customs administration, enforcement, compliance, litigation, legislation and policy.

John represents clients in proceedings at the administrative and judicial levels, as well as before Congress and the international bureaucracies that handle customs and trade matters. He advises clients on all substantive import regulatory issues handled by U.S. Customs and Border Protection and Immigration and Customs Enforcement, such as classification, valuation, origin, marking, tariff preference programs, other agency regulations, admissibility, import restrictions, quotas, drawback, audits, prior disclosures, penalties, investigations, Importer Self Assessment and Customs-Trade Partnership Against Terrorism programs, importations under bond, the Jones Act, vessel repairs, and foreign trade zone matters.