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Home / World / We run out of time in NAFTA while facing China

We run out of time in NAFTA while facing China



WASHINGTON – President Donald Trump's team no longer has the time to rewrite a trade pact with Canada and Mexico this year, just as China is facing and importing with its allies over US tariffs Steel argues and aluminum

If negotiators can not agree on reshaping the North American Free Trade Agreement – House spokesman Paul Ryan set an informal Thursday deadline – the talks could go on until 2019. Or Trump could make good on his threat, the One He calls a "deadly" catastrophe and messes up trade between the three NAFTA countries.

"The window closes quickly," said Dan Ujczo, a commercial lawyer with Dickinson Wright in Columbus, Ohio.

NAFTA is barely the only urgent item on the government's trade agenda. Trump was expected to meet Chinese Vice Premier Liu He on Thursday to avert a trade war. Liu will also meet with a US team led by Treasury Secretary Steven Mnuchin.

The US and China, which threatened to threaten in a dispute over Beijing's demand that American companies turn around to gain access to the Chinese market, threatened to threaten 50 billion each other's goods. And Trump has asked US sales representative Robert Lighthizer to tax another $ 100 billion of Chinese products.

The prospect of a trade war between the two largest economies has unnerved global financial markets and alarmed large corporations.

"The stakes are too high for these talks to fail," said Christine McDaniel, a senior researcher at the Mercatus Center of George Mason University. "The US economy, its companies, its workers and its people are all dependent on being able to buy and sell with their colleagues at home and around the world every day."

Speaking to reporters, Trump took the prospect of successful negotiations with Beijing:

"Will this be successful?" The president asked. "I doubt it."

Trade sanctions could disrupt business between countries and potentially jeopardize jobs. Consumers would be hurt by higher prices for imported products that are subject to customs duties.

Meanwhile, Japan, a staunch US ally, is threatening to protest the World Trade Organization to protest Trump's tariffs on imported steel and aluminum. The president imposed tariffs in March, arguing that dependence on imported metals posed a threat to America's national security. He liberated the European Union, Canada and Mexico – but not Japan – until 1 June.

The steel and aluminum tariffs have upset traditional American allies. These countries want permanent exceptions to the tariffs. Or they want them to be completely withdrawn. Donald Tusk, president of the European Council, tweeted Monday the United States that "with such friends who need enemies."

NAFTA has long been a focus of Trump's wrath. But achieving a NAFTA campaign to the President's satisfaction always seemed like a long time. When it came into force in 1994, NAFTA ended most trade barriers between the US, Canada and Mexico. Trade increased within the NAFTA bloc. American farmers exporting corn and other products benefited from the agreement.

But many US manufacturers, especially automakers, shifted production to Mexico to benefit from low labor costs and sent their products back to the United States. The influx of imports weakened America's trade deficit with Mexico, which last year was $ 69 billion. (The United States recorded a trade surplus of nearly $ 3 billion with Canada in 2017.

Trump is trying to revise NAFTA to reduce car production to the United States and reduce America's trade deficit Percentage of content of a car in one country – the United States or Canada – with average auto worker pay of approximately $ 15 per hour arises to qualify for the duty-free status of NAFTA.

But companies have complicatedly built supply chains that use NAFTA. Crossing borders, using the strengths of each country – such as cheap labor in Mexico, skilled labor and proximity to customers in the US and Canada – would change the rules, warn manufacturers, disrupt their operations, increase their costs, and increase their costs to manufacturers Disadvantage of Asia and Europe.

Ann Wilson, Senior V ice President at the Motor & Equipment Manufacturers Association, representing automotive suppliers, argues that the US proposal could push up the average price of new cars already exceeding $ 35,000.

"$ 35,000 is a lot of money for most Americans," Wilson said.

The Center for Automotive Research, a Independent Research Organization, estimates that as many as 125 types of cars could lose their NAFTA benefits under the US payroll and be subject to tariffs.

"Tariffs would add between $ 470 and $ 2,200 to the cost of these special vehicles" The center closed last month in a report.

US The law establishes a process that must be followed by trade agreements to allow Congress to vote without allowing changes. House Speaker Ryan said last week that an agreement must be reached on Thursday to set a timetable for a vote before the convention leaves at the end of the year. Others say that there is more time. Commercial lawyer Ujczo calculates that the negotiators will have until the day of remembrance on May 28.

Lori Wallach, director of the Global Trade Watch of Public Citizen and keen critic of the existing NAFTA, said the talks could last until June and allow a vote in Congress this year.

"We have no time left," said Rep. Will Hurd, a Republican whose Texas district borders Mexico and benefits from NAFTA. "But I think the deadline is not necessarily today."

"I am very positive," said Canadian Prime Minister Justin Trudeau on Thursday at the New York Economic Club to Susan Li of the Fox Business Network. "But it will not be done until it's done, and people are working very, very hard on it."

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AP Business Writer Yuri Kageyama in Tokyo contributed to this report.

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, transmitted, rewritten or redistributed.


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