Under the changes, proposed after President Donald Trump called the pact a “disaster” during the election campaign, Washington would keep some of NAFTA’s most controversial provisions
The Trump administration is seeking mainly limited changes to the North American Free Trade Agreement with Mexico and Canada, the Wall Street Journal reported on Thursday, citing an administrative draft proposal circulated in Congress by the Office of the U.S. Trade Representative.
Under the changes, proposed after President Donald Trump called the pact a “disaster” during the election campaign, Washington would keep some of NAFTA’s most controversial provisions, including arbitration panels that let investors in the three nations circumvent local courts to resolve civil claims, the Journal said.
Some critics say these entities infringe on national sovereignty.
The draft proposal, reviewed by the newspaper, seeks to improve these bodies’ procedures to resolve disputes.
One potential major change, however, is a recommendation to allow a NAFTA nation to reinstate tariffs in case a flood of imports causes “serious injury or threat of serious injury” to domestic industries, the Journal reported.
Another draft objective says the administration wants “to establish rules that require government procurement to be conducted in a manner that is consistent with U.S. law and the administration’s policy on domestic procurement preferences,” the paper reported.
This could allow for Trump’s “Buy American” plan, but also cause U.S. companies to lose business in Mexico and Canada.
The document also calls for protections of digital trade and commerce, tougher intellectual property enforcement and requirements that state-owned companies operate in a commercial fashion, the paper reported.
The draft proposal is subject to revision, and the administration must give Congress 90 days’ notice under trade law before beginning formal NAFTA renegotiations.
Trump has long vilified NAFTA as draining millions of manufacturing jobs to Mexico, and he has vowed to quit the trade pact unless it can be renegotiated to shrink U.S. trade deficits.