On December 1, a day after signing the new U.S.-Mexico Canada Agreement (USMCA), President Trump suggested to the press that he would formally notify Canada and Mexico of U.S. withdrawal from the existing NAFTA, in order to pressure Congress to pass USMCA in 2019.

Meanwhile, on December 6, U.S. Trade Representative Robert Lighthizer met with Rep. Nancy Pelosi (D-California), House Democratic Leader and expected Speaker of the House for the 116th Congress, on USMCA. Lighthizer had expressed the wish during the USMCA negotiations that the final agreement would attract substantial bipartisan support.  Following the meeting, Pelosi noted a number of positive aspects of the new agreement, but concluded that the USMCA lacked “real enforcement on the labor and environmental protection[s].” Other House Democrats including Rep. Richard Neal (D-Massachusetts) and Rep. Bill Pascrell. Jr. (D-New Jersey), who are expected to be chairs of the House Ways and Means Committee and the Ways and Means Trade Subcommittee respectively, have made similar statements.

These events set the stage for the debate in Congress over the fate of the newly signed USMCA in 2019.

While some Republicans have expressed concerns about the agreement[1], USMCA will likely face a greater challenge in the Democratic-majority House than in the Republican Senate. Despite some changes to NAFTA that may appeal to Democrats (such as limitations on investor-state dispute settlement and a wage-based rule of origin for autos), we expect the Democrats to seek additional concessions from the Administration, in particular on the enforceability of USMCA’s labor and environmental provisions.

Depending on the scope and magnitude of the changes sought by Democrats, any concessions might not require formally reopening negotiations with Canada and Mexico, which would likely delay USMCA passage. Democrats could seek to include any such changes in the implementing legislation or through side-letters or other types of political agreements with Mexico and Canada. The Democrats led by Pelosi have struck an agreement on labor and trade with Republicans in the past—the so called “May 10” Agreement in 2007 that Democrats reached with the George W. Bush Administration that added labor provision to pending and future U.S. trade agreements.

If needed in renewed talks with Canada and Mexico, the United States could use another point of leverage—prior to the USMCA entering into force, the President must certify that both Canada and Mexico have taken the necessary domestic steps to comply with their respective FTA commitments on “day one” of the agreement, according to TPA procedures.  Accordingly, implementation of the agreement can be delayed until all such steps have been taken.

If domestic disagreements over USMCA escalate, however, and lawmakers are not able to reach a resolution with the Trump Administration, we may see the President continue to raise the possibility of U.S. withdrawal from NAFTA. As we’ve previously noted, the President initiating NAFTA withdrawal would likely come with significant obstacles, both legal and political, and there is significant uncertainty over how Congress and in particular the Democrats will react. Congress would have a number of tools to oppose the President’s unilateral withdrawal from NAFTA—the question is if it would have the will to use them.


[1] A group of 40 Republicans criticized USMCA for its protections for LGBTQ workers. However, the final text version of USMCA included a footnote essentially excepting the United States from implementing any policy changes related to the LGBTQ commitment.

After more than a year of negotiation, the United States, Mexico and Canada reached an agreement to update the North American Free Trade Agreement (NAFTA), which governed trade among the three nations. The new agreement may not go into effect until 2020 because leaders from the three countries must sign it and then Congress and the legislatures of Canada and Mexico must approve it – a process that will take months.

The three NAFTA parties are expected to sign the agreement on November 30. After signing, for ratification in the United States, Trade Promotion Authority (TPA) procedures require the U.S. International Trade Commission (USITC) to perform an economic analysis of the agreement, for which it can take a maximum of 105 days. If USITC takes the maximum allotted time, Congress could vote on the agreement in March 2019 (though it is possible for this process to be accelerated). The November midterm elections in the United States could have an impact on whether and when the agreement will pass Congress.

Functionally, the proposed U.S.-Mexico-Canada Agreement (USMCA) picks up elements of the Trans-Pacific Partnership (TPP) and tightens others relative to what NAFTA provided.  Essentially, the major accomplishment of the USMCA is to keep the three-country agreement in place, despite Trump’s threats to withdraw from the NAFTA.  Some think that President Trump could still threaten to withdraw from NAFTA as a means of pressuring Congress to act on the USMCA.

The USMCA makes a number of significant upgrades to environmental and labor regulations regarding Mexico. It also requires additional Intellectual Property protections. U.S. pharmaceutical companies are provided 10 years of protection against generic brands in Canada.

Some of the other key industry points in the proposed USMCA are that Canada made concessions on dairy in exchange for being able to keep in place Chapter 19, the dispute settlement mechanism for reviewing Antidumping/Countervailing Duty determinations. Canada has used this provision to challenge softwood lumber provisions.

Investor-state dispute settlement (ISDS) will phase out for Canada and be limited to certain sectors in Mexico – oil and gas; power generation services; telecommunication services; transportation services; and ownership or management of infrastructure.

Below is a breakdown regarding how the various industries might be affected:

  • Steel and aluminum tariffs – remain in place, as do Mexico’s retaliatory tariffs.  These industries are subject to additional discussion.
  • Autos/auto parts – The goal of the new deal is to have more cars and trucks made in North America. The side agreements with Canada and Mexico spell out how much trade would be excluded from any future section 232 tariffs in this sector, if imposed.  The auto and auto parts sector will have new rules of origin (with the hourly wage component of $16/hour or “labor value content” required initially for 30% of the work accomplished, phasing up to 40% over three years) that could affect supply chain decisions.  For example in order to qualify, a car or truck must have 75% of its components manufactured in the United States, Mexico, or Canada (this is up from the current 62.5% requirement).
  • Textiles/apparel – More North American content is required.  Tariff Preference Levels (TPL) allowing use of non-originating fabric will be more restrictive.
  • Chemicals – a new approach to rules of origin for chemicals spells out a number of methodologies that could apply. This was an approach that industry wanted and is expected to make it easier for chemicals to qualify under the agreement.  The industry had done a study under the NAFTA and found that only about half of chemicals transactions received duty-free treatment under NAFTA because the paperwork discouraged claiming the treatment.
  • Dairy – Canada agreed to increase access under the USMCA to 3.59% (from the 3.25% that would have applied under TPP), and to eliminate Class 6 and 7 price mechanisms. But Canada will be required to establish safeguards (through specified price surcharges) to prevent surges in shipments of milk protein concentrates, skim milk powder and infant formula

The deal among the countries must be reviewed in six years before it goes into effect for the full 16 years. It will then be reviewed in another 16 years.








On August 31, after a week of talks, Canada and the United States failed to reach agreement on a new NAFTA that aligns with the bilateral U.S.-Mexico agreement reached on August 27. Among the key outstanding issues is the U.S. objective of opening up Canada’s dairy market and the Canadian objective of maintaining Chapter 19 of the original NAFTA’s dispute settlement for antidumping and countervailing duty cases. Canada will resume negotiations with the U.S. on September 5.

Despite the breakdown in talks, the Trump administration notified to Congress its intent to sign an agreement with Mexico, noting also the possible inclusion of Canada if agreement is eventually reached. The notification begins the 90-day timeline under Trade Promotion Authority (TPA) after which the administration can, according to USTR, legally sign an agreement with both Mexico and Canada. Although there are some legal questions as to whether adding Canada after the notification would fulfill TPA notification requirements, it is not likely to face significant challenge (most would like to see Canada included in the agreement).

60 days prior to signature, however, the Trump administration is still required under TPA to publish the text of the new NAFTA agreement, meaning a text must be agreed to and released by October 1 in order to achieve the administration’s goal of a signed agreement before December 1, when Mexican President Enrique Pena Nieto’s term ends. This likely means that Canada and the U.S. would have to agree on terms by the start of October, if not before.

If no agreement with Canada is reached, it remains possible that the Trump Administration would seek to terminate the existing NAFTA and replace it with the August 27 bilateral U.S.-Mexico agreement. This of course would raise the significant legal and political concerns noted in our August 29 post.


On August 27, the U.S. and Mexico announced a “preliminary agreement in principle” on the renegotiation of NAFTA—a deal reached without Canada, which sat out the latest bilateral talks. Canada’s Foreign Minister, Chrystia Freeland, has joined negotiations this week in hopes of reaching a trilateral agreement by Friday, August 31. Despite the significant publicity around this announcement, the ultimate fate of NAFTA still remains uncertain, given that Canada was not part of the bilateral deal and many details have yet to be released.

Link to CNBC Squawk Box discussion on NAFTA with Ambassador Robert Holleyman, Crowell & Moring (8/29/18).

The parties are attempting to conclude negotiations to allow for the Mexican President Enrique Peña Nieto’s Administration to sign the deal before he leaves office on December 1. By statute, U.S. Trade Promotion Authority (TPA) procedures require the Trump Administration to notify Congress 90 days before it can sign any agreement, which it seeks to do while Peña Nieto is still in office. U.S. Trade Representative (USTR) Robert Lighthizer has said he will notify the agreement to Congress this Friday, with or without Canada.

While the U.S. President has the authority to negotiate trade agreements, he does not have the authority to implement trade agreements.  Once negotiations are complete, the President must notify Congress and then submit an implementing bill for approval by both houses of Congress (see TPA statutory timelines below). The vote under TPA is a yes or no majority vote on the negotiated agreement and amendments are not permitted.  The preliminary “agreement” with Mexico, or one to be reached with Mexico and Canada, has no legal significance until it is approved by Congress. This process is expected to continue into 2019.

Trade Promotion Authority Timeline

Source: Congressional Research Service

According to USTR fact sheets, the preliminary agreement with Mexico includes the following:

  • Market access: Maintains zero tariffs on originating agricultural and industrial products
  • Autos/Auto parts: Requires 75% of auto content to be made in Mexico or the United States and 40-45% of automobile content be made by workers earning at least $16/hour in order to qualify for duty-free treatment; it is unclear if existing facilities will be exempted from this requirement
  • Other industrial products: Strengthens rule of origin for other industrial products such as chemicals, steel-intensive products, glass, and optical fiber
  • Textiles: Limits rules that allow for non-originating inputs to qualify for duty-free treatment, including for sewing thread, pocketing fabric, narrow elastic bands, and coated fabric
  • Agriculture: Enhances rules for sanitary and phytosanitary standards and protects use of certain geographical indicators (GIs)
  • Intellectual property: Protects biologics data for 10 years, extends minimum copyright terms to 75 years, and enhances patent and trademark protections
  • Digital trade: Minimizes localization requirements on data storage and processing, limits requirements for disclosure of proprietary source code and algorithms, and limits civil liability of Internet platforms for hosting non-IP content

According to press reports, the agreement also includes the following:

  • Sunset clause: Requires the U.S. and Mexico to renew the agreement 6 years after entry into force, for the agreement to extend beyond a 16 year-period
  • Investor-State Dispute Settlement (ISDS): Limits ISDS protections outside of the oil and gas, energy, telecommunications, and infrastructure sectors
  • Autos/Auto parts: While not made explicit, reports suggested that Mexico could receive an exception from supplemental import duties arising from the national security investigation into autos and auto parts.  This suggests that the U.S. is still considering implementing new supplemental import duties on autos and auto parts pursuant to Section 232 of the Trade Expansion Act of 1962.

NAFTA termination and replacement?

In announcing the deal, President Trump suggested he could terminate NAFTA and replace it with the bilateral U.S.-Mexico agreement if no agreement is reached with Canada. Actually doing so would raise two immediate legal concerns: 1) whether President Trump can withdraw from NAFTA without Congress, and 2) whether the Trump Administration has legal authority to enter into a bilateral agreement with Mexico under TPA procedures, given that the Administration previously notified intent to renegotiate NAFTA in May 2017.

Termination:  The consensus is that President Trump can unilaterally terminate NAFTA – although not all of the provisions enacted as part of the original NAFTA implementing legislation approved by both houses of Congress and signed into law in 1993.  NAFTA is not a “treaty” from a constitutional perspective because it was not approved by two-thirds of the U.S. Senate in accordance with Article II, section 2 of the U.S. Constitution. NAFTA is an “executive agreement” approved through the adoption of ordinary legislation adopted by both houses of Congress under TPA.

Article 2205 of NAFTA provides that “[a] Party may withdraw from this Agreement six months after it provides written notice of withdrawal to the other Parties.” The president shall have 60 days following the day of withdrawal to submit to Congress recommendations as to the appropriate rates of duty for those articles which were affected by the termination.

To date, there has been no litigation challenging the President’s power to withdraw from a trade agreement. A legal challenge may be made in U.S. courts on the basis that the President had exercised his delegated powers to negotiate trade agreements in a manner inconsistent with what the Constitution and/or Congress intended. As noted above, however, the legal consensus is that the President can withdraw from NAFTA given the explicit termination clause embedded in the agreement. Therefore, it is not likely that such a challenge will be successful.


Bilateral or trilateral replacement agreement: A Mexico-U.S. only agreement would face political difficulties: Mexico has thus far indicated a strong preference that Canada remain a part of any agreement, and leading U.S. lawmakers have also made statements in favor of a trilateral agreement.  Mexico has suggested that Canada could join the agreement during the 90-day period before it is signed.  Further questions also remain about whether Canada’s later entry would satisfy TPA notification procedures.

On April 19, Crowell & Moring’s International Trade Attorneys hosted a webinar on “Trade in 2018 – What’s Ahead?”

Please click here to register and view the webinar on demand.


From the Section 232 national security tariffs on steel and aluminum imports to the ongoing NAFTA re-negotiation, the Trump administration is seeking to implement significant changes in international trade policy and enforcement. Economic sanctions on Russia continue to expand, the future is far from clear regarding Iran, and perhaps North Korea is coming into focus. A new Asia trade agreement without the United States, and a bumpy road ahead for Brexit all make for uncertainty and the need for enhanced trade risk management. Join us as we identify the international trade risks and opportunities likely to continue and grow in 2018.

Our Crowell & Moring team discussed predictions for the remainder of the year, with cross-border insights from our practitioners in the U.S., London, and Brussels. Topics included likely trends and issues in the U.S. and EU including:

  • Trade policy developments: Section 232, NAFTA renegotiation, and trade remedies
  • Sanctions in Year Two of the Trump Administration: Russia, Iran, North Korea, and beyond
  • Anti-money laundering (AML) and beneficial ownership
  • Supply chain risk management: blockchain, forced labor, the U.K. Modern Slavery Act, and GDPR
  • Europe: Brexit, the EU’s 4th AML Directive, and the EU/U.K. AML enforcement
  • CFIUS: how significant is the new legislation?
  • Export controls: Wither reform?
  • Import and customs

On March 26, 2018, the U.S. Court of International Trade (CIT) dismissed U.S. Customs and Border Protection’s (CBP) attempt to collect $4.5 million in penalties against a Canadian textile company, Tricots Liesse 1983, Inc. (Tricots).  U.S. v. Aegis Security Insurance Co. and Tricots Liesse 1983 Inc., Slip. Op. 18-29.

Tricots produces quality knit fabrics and sells its fabrics to high-end U.S. swim and active wear producers. Fabric imports made from NAFTA yarn are duty free under the rules of origin (ROO) and fabric imports made from non-NATA yarn are duty free if the Canadian government issues Tariff Preference Level (TPL) certifications under the TPL quota program.  Tricots attempted to correct certain past NAFTA ROO claims by filing a disclosure with CBP and submitting TPL certificates issued by Canada.  However, CBP rejected Tricots’ disclosure and corrections saying the TPL certifications were untimely.  CBP issued Tricots an administrative penalty and duty demand, but did not provide Tricots an opportunity for an oral hearing during the administrative proceedings as required by statute.  After CBP filed suit against Tricots in the CIT to collect the $4.5 penalty and duties, Tricots filed a motion to dismiss the penalty claims because CBP failed to exhaust administrative remedies.

The CIT held that “[t]he facts demonstrate that, despite Tricots’ efforts, Customs did not follow the statutory injunction to provide the company with a ‘reasonable opportunity’ to make oral representations ‘seeking remission or mitigation of the monetary penalty’ following issuance of the notice of penalty, and thus did not provide Tricots with the statutorily required opportunity to be heard.”   The court added, “Accordingly, Customs failed to perfect its penalty claim and thus is barred from bringing it.”  The CIT found that the hearing was necessary before the government could bring its penalty claims in the CIT. The court rejected CBP’s arguments that Tricots failed to show it suffered “substantial prejudice” because of the government’s failure to hold a meeting where Tricots could make its arguments in person.  Now the court must decide if it should also dismiss CBP’s claims for duties.

This decision should help importers by ensuring that they receive a full and fair administrative hearing before CBP imposes a penalty.

Tricots is represented by Crowell & Moring attorneys John Brew, Frances Hadfield and Ade Johnson.

The 7th round of NAFTA negotiations took place in Mexico City from February 25-March 5 with relatively little fanfare as the talks were overshadowed by President Trump’s comments that his administration would impose Section 232 tariffs on aluminum and steel imports. Following the close of the round, President Trump issued Presidential Proclamations announcing the tariffs on March 8.

Officials are nearing completion of chapters on telecommunications and technical barriers to trade and closed discussions on good regulatory practices, administration and publication, and sanitary and phytosanitary measures (SPS). The three parties also agreed to a specific chapter dedicated to energy, which the U.S. previously opposed.

On the more difficult issues, some discussions are taking place but the path to completion remains unclear.

  • Autos rule of origin: Officials reportedly continued discussions over Canada’s proposal on the rule of origin for autos, which would incorporate intellectual property and technology in determining country of origin. However, the U.S. has still not given any sign it will move away from its initial proposal requiring a regional content requirement of 85 percent and a U.S.-originating content requirement of 50 percent.
  • State-to-state dispute settlement: Mexico and Canada have proposed modifying the rules for selection of panelists in state-to-state dispute settlement. However, it remains unclear whether the U.S. will agree to a form of binding dispute settlement.
  • Investor-state dispute settlement (ISDS): Canada and Mexico have initiated bilateral discussions on ISDS without the United States. The Unite States has not shown signs of seeking any ISDS commitments thus far beyond the “opt-in” system it initially proposed.
  • Procurement: Similar to ISDS, Canada and Mexico are discussing bilateral options for liberalizing procurement access for their respective markets. The U.S. has thus far not engaged in these discussions.

There was no joint statement following the March round. U.S. Trade Representative (USTR) Robert Lighthizer noted progress made on relatively non-controversial chapters but warned that “time is running very short” for the negotiations.

NAFTA talks could be further complicated by President Trump’s action to impose Section 232 tariffs on imports of steel and aluminum, effective March 23. President Trump’s March 8 Presidential Proclamations on the tariffs initially exempts imports from Canada and Mexico, but appears to suggest that the exemptions are conditioned on ongoing discussions to address transshipment through both countries.

Meanwhile, statements by USTR Lighthizer and President Trump have suggested that the aluminum and steel tariffs could be used as a bargaining chip during NAFTA negotiations. Canada and Mexico have insisted that the discussions are on separate tracks.

The next NAFTA round is tentatively scheduled for the week of April 8 in Washington D.C.


During the long-anticipated sixth round of talks in Montreal to update NAFTA, from January 23-29, negotiators made progress in some issue areas while avoiding any major clashes that might have led to U.S. withdrawal from the existing agreement. Officials advanced discussions on digital trade, sanitary and phytosanitary measures, and technical barriers to trade to near completion while closing a chapter on anti-corruption measures.

Following the round, U.S. Trade Representative (USTR) Robert Lighthizer acknowledged progress in these areas, while highlighting the importance of the need to make progress on the “core issues” of greatest interest to the United States. These core issues, which could include the rules of origin for automobiles as well as other difficult issues (i.e., investment, procurement, dispute settlement and the U.S. proposal for a five-year “sunset clause” in the agreement), are ultimately what the U.S. will judge as determining the success or failure of the talks.

Despite some initial constructive engagement, however, negotiators remain far from resolving these issues. Canada responded to a few U.S. proposals during the round:

  • On the rule of origin for autos, Canada reportedly proposed expanding the formula for calculating regional and national content values to include intellectual property and new technologies. Lighthizer rejected this approach in his closing remarks, finding it to be the “opposite” of U.S. interests because it would lead to less regional content than the status quo. The initial U.S. proposal would increase the regional value content for automobiles from the current 62.5 percent to 85 percent, with 50 percent reserved for U.S.-origin content.
  • On investor-state dispute settlement (ISDS), Canada proposed a mechanism that would exclude the U.S., while maintaining mutual protections only for Canada and Mexico. While it is unclear whether USTR will favor this approach, U.S. industry groups will likely be opposed.
  • On the “sunset clause,” Canada made a counterproposal of a five-year review process for the agreement, without the threat of automatic termination.

Canada also proposed departing from a proposed rule that would require the NAFTA parties to automatically extend to one another the same level of market access for services as each commits to in future trade agreements—the so-called “MFN-forward” rule that Canada had already agreed to in TPP. Lighthizer said in his closing remarks that the proposal was “unacceptable” and referred to it as a “poison pill.”

The Trump Administration overall appears to be signaling that negotiations are likely to proceed without disruption at least through the next round, which will take place in Mexico City from February 26-March 6.

While officials initially set a target date of concluding talks by March 31, there are hints that negotiations could last beyond that date, even perhaps after Mexico’s general election on July 1. President Trump said on January 11 that he could be flexible on the timetable, and U.S. Secretary of Agriculture Sonny Purdue testified to the House Agriculture Committee on February 6 that he expects talks to be extended beyond March but completed before the end of the year.

Members of Congress representing agricultural interests continue to press the Trump administration to conclude an agreement that will “do no harm” to the U.S. agricultural sector, which has benefitted from expanded access to Canada and Mexico under NAFTA. These Members would prefer to see the negotiations extended beyond March, provided that the overall result remains favorable for U.S. agribusiness.

NAFTA negotiators at the working level met intersessionally from December 9-15 in Washington D.C., conducting technical discussions on digital trade, financial services, customs, energy, state-owned enterprises, and textiles, among other chapters.

No chapters were closed during the latest meeting. Negotiators also mostly avoided addressing in detail the most controversial proposals tabled by the United States at the fourth round of negotiations last October (i.e., rules of origin for automobiles, dispute settlement, the “sunset clause,” or procurement). These will likely be discussed at the next formal round on January 23-28.

Please click here for more information on the negotiations.

The fifth round of NAFTA renegotiation, held for the first time without participation by the NAFTA trade ministers, took place in Mexico City from November 17-21. The negotiators made progress at the technical level on some NAFTA chapters, including on digital trade, sanitary and phytosanitary measures (SPS), customs, and regulatory cooperation.

Little progress was made on the most politically sensitive issues. At the close of the round, U.S. Trade Representative (USTR), Robert Lighthizer issued a statement outlining his concerns that the U.S. has “seen no evidence that Canada or Mexico are willing to seriously engage on provisions that will lead to a rebalanced agreement.”

Canada and Mexico did not submit substantive responses to several contentious U.S. proposals, in particular on rules of origin for automobiles. Neither party made a counteroffer to the U.S. proposal to increase the regional content requirement to 85 percent and establish a national content requirement of 50 percent for U.S.-origin content. Canada and Mexico are holding back on making a response—at least for the moment—in hopes that USTR will give in to pressure by U.S. industry and Congress to withdraw or soften its proposal. The two parties did ask for clarification of the U.S. analysis used to formulate the regional value and local content proposal.

Meanwhile, the Trump administration continues to signal that if deadlock on these issues continues through early next year, the President may announce an intention to withdraw the U.S. from the agreement, triggering a 180-day waiting period mandated by Article 2205 of NAFTA. The threat of such a move could create negotiating leverage, particularly with Mexico, though triggering withdrawal would be strongly opposed by agricultural groups, most U.S. industries, as well as likely a majority of Congress. U.S. agriculture groups have been vocal in recent weeks about their opposition to the Trump administration threatening withdrawal from the agreement, noting that it will cause enormous economic disruption in agriculture-dependent states that are important suppliers to Canada and Mexico.

A set of updated negotiating objectives released by USTR on November 17 reflect many of the U.S. proposals thus far, but also leave enough room for the U.S. to negotiate key outcomes. They include the following:

  • Sunset clause: An updated objective is to “provide a mechanism for ensuring that the Parties assess the benefits of the agreement on a periodic basis.” This is aligned with the U.S. proposal to automatically terminate NAFTA after five years unless renewed. Notably, Mexico proposed during the fifth round that NAFTA parties conduct a review of the agreement every five years—without the threat of automatic termination—which would also be aligned with the updated U.S. objective.
  • Investor-State Dispute Settlement: The updated U.S. objective is to seek “meaningful procedures for resolving investment disputes, while ensuring the protection of U.S. sovereignty and the maintenance of strong U.S. domestic industries.” While the objective reflects USTR Lighthizer’s skepticism regarding the benefits of ISDS, it does not necessarily commit the Administration to its proposal to establish an “opt-in” ISDS system.
  • Digital Trade: A new U.S. objective is to “establish rules that limit non-IPR civil liability of online platforms for third party content, subject to NAFTA countries’ rights to adopt non-discriminatory measures for legitimate public policy objectives.” The U.S. at the latest round proposed including legal protections against civil liability for 3rd party online platforms, aimed at protecting major U.S. Internet companies such as Google or Facebook.
  • Intellectual Property: The updated U.S. objective adds language to include “as an appropriate, exceptions and limitations” to protections for copyright and related rights as a part of the agreement. The new objective could suggest that the U.S. will continue to favor inclusion of copyright “safe harbor” limitations for Internet providers and intermediaries consistent with a series of recent U.S. trade agreements, and new provisions recognizing “balance” in the area of copyright similar to provisions on “exceptions and limitations” as first negotiated in the TPP.

The next formal negotiating round is set for January 23-28 in Montreal, Canada, though NAFTA negotiators will also meet in December to work on technical issues. The significant break between rounds will permit the Trump administration and Congress to focus on tax reform through the end of the year, the success or failure of which could have an impact on the political pressure to conclude a favorable NAFTA renegotiation in early 2018.

NAFTA negotiators have given themselves until March 31, 2018, to seek agreement on updating the regional trade agreement.

For more information, contact: Robert Holleyman, Melissa Morris, Evan Yu