“PLEASANT SURPRISES” TO NAFTA

Law360, New York (April 11, 2017, 9:36 PM EDT) — President Donald Trump on Tuesday insisted that negotiations of updates to the North American Free Trade Agreement — which he has routinely derided as a “disaster” — will result in “pleasant surprises,” while meeting with a group of CEOs and several of his cabinet members at the White House.
According to a Monday briefing from White House press secretary Sean Spicer, Trump was planning to meet Tuesday with cabinet members and a group of CEOs who are part of his strategic and policy forum. During this meeting, Trump promised “pleasant surprises for you” regarding NAFTA negotiations, according to a Tuesday report from the Associated Press.

A draft negotiating proposal, which had been circulating Capitol Hill for a few weeks in March, showed that the president’s blueprint for updating NAFTA borrows heavily from the approach enshrined in the Trans-Pacific Partnership — an agreement that Trump harshly criticized and eventually abandoned.

The proposal called for various tweaks to NAFTA’s investment, intellectual property, government procurement, labor and environmental rules. Overall, it offered a relatively modest plan for tackling an agreement that the president routinely derided as a “disaster” for the U.S. economy throughout the presidential campaign.

While the document echoed Trump’s complaints about a persistent trade deficit with the United States’ NAFTA partners, the most common criticism of the current deal is that it is simply outdated and unfit to govern 21st-century commerce, a position that is likely to curry favor with the Mexican government.

“Rules for intellectual property rights, state-owned enterprises, rules of origin, customs procedures and ensuring the benefits of trade benefit small and medium businesses have all been improved in newer trade agreements,” the document said. “Effective implementation and enforcement of trade agreements is also much more critical today than a generation ago and an area where much can be done.”

This need to modernize trade agreements was among the primary reasons the U.S. pursued the TPP, a 12-nation agreement that included Canada and Mexico. Much like the TPP, Trump’s NAFTA proposal calls for enforceable labor and environmental rules that are meant to assuage longstanding skeptics of trade liberalization.

While the Tuesday AP report did not include any additional comments from Trump regarding NAFTA negotiations, Spicer’s briefing from the previous day indicated that the White House meeting would address a range of issues.

Spicer noted that part of the meeting would involve “small interactive groups,” each led by a cabinet member, to discuss the priorities for his or her respective agency. The administration members expected to be at the meeting were U.S. Department of Commerce Secretary Wilbur Ross, U.S. Department of Education Secretary Betsy DeVos, U.S. Environmental Protection Agency Administrator Scott Pruitt, Office of Management and Budget Director Michael Mulvaney and U.S. Department of Transportation Secretary Elaine Chao, Spicer said on Monday.

The press secretary did not name any of the CEOs with whom Trump was planning to meet, but the AP report noted that Blackstone Group CEO Stephen Schwarzman was present on Tuesday.

–Additional reporting by Alex Lawson. Editing by Jack Karp.

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