New legislation calls for key changes to be made to NAFTA

A House effort introduced this week looks to revamp key principles of NAFTA in the form of introduced legislation entitled a “Blueprint for America’s New Trade Policy.”

Logistics in the News

State of Logistics 2016: Pursue mutual benefit
FedEx set to roll out flight from Liege, Belgium to Memphis
ATA reports declines in February truck tonnage volumes
FTR cites flat trucking conditions with an eye on growth as year goes on
Cass Freight Index report remains in positive territory
More Logistics News

Logistics Resource

The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
All Resources
By ·

During the Presidential campaign and subsequently since being elected President, Donald Trump has been very clear that he is no fan of the North American Free Trade Agreement among the United States, Mexico, and Canada.

President Trump has repeatedly stated that he views NAFTA as a failure while adding he prefers bilateral trade agreements instead of multinational deal-based ones. But putting his preferences aside for a moment, there are many transportation and logistics stakeholders that will not hesitate to tell you that NAFTA has its merits and been key in promoting cross-border trade activity between the U.S. and its northern and southern border neighbors.

How so? Consider these data points. For one, NAFTA eases trade among 450 million people in the U.S., Canada, and Mexico, with NAFTA trade more than quadrupling in 20 years and, in turn, boosting the economies of each country. And according to U.S. Chamber of Commerce data, nearly 14 million U.S jobs depend on trade with Canada and Mexico, coupled with separate data from the Peterson Institute stating that NAFTA makes the U.S. $127 billion richer each year.    

While these are noteworthy statistics to be sure, there are other schools of thought that suggest NAFTA is not all it is cracked up to be, with NAFTA leading to a loss of jobs and lower U.S. wages, causing increased environmental pollution in Mexico, and that it will lead to the privatization of education, health care, energy and water, among other reasons.

For these reasons and others, a House effort introduced this week looks to revamp key principles of NAFTA in the form of introduced legislation entitled a “Blueprint for America’s New Trade Policy.”

Led by Reps. Debbie Dingell (D-Michigan) and Peter Defazio (D-Oregon), some of the key components of this legislation for a replacement, or reset, of NAFTA, include:

  • requiring strong rules of origin for cars and auto parts;
  • requiring strong labor & environmental standards—and ensure they are enforced;
  • adding strict, enforceable disciplines to fight against currency manipulation;
  • eliminating procurement provisions that undermine Buy America;
  • requiring imports and foreign companies operating in the U.S. to adhere to U.S. laws
  • lower the cost of prescription drugs;
  • end tribunals that Undermine U.S. Trade Enforcement Laws, Such as NAFTA’s Chapter 19;
  • requiring foreign operators to comply with U.S. transportation laws;
  • requiring strong rules of origin on cars, auto parts, and other manufactured goods;
  • eliminating the dangerous ISDS provision that undermines U.S. sovereignty; and
  • protect U.S. Energy Policy

And DeFazio’s office said the resolution “directs President Trump to initiate the renegotiation of NAFTA no later than June 1, 2017. All of the provisions included in the resolution must be agreed to by Mexico, Canada, and the U.S. before the agreement can be approved. If negotiations are not completed and all the provisions outlined in the resolution agreed to within one year of beginning talks, the resolution directs the President to consider withdrawing the U.S. from NAFTA.”

Given the typical slow pace of policy implementation in Washington, which, in recent years, continues to take a back seat to the ostensible theater of partisan bickering, it is currently difficult definitively say what the next steps are and whether or not this bill actually goes anyway. Things could be accelerated in the event the President’s proposed border wall plan takes proposal, but that is not a certainty at this point.

For now, it remains business as usual with NAFTA until we see some actual action or legislative progress occur. 


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Cross-Border · NAFTA · All Topics
Latest Whitepaper
The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...