'Fundamentally failed': U.S. vows major overhaul as NAFTA talks formally begin

Effigy of Donald Trump

Dan Ujczo, an international-trade attorney who advised members of Trump's trade team, said, "Most economists will tell you that trade deficits are not necessarily a bad thing".

Lighthizer's rhetoric contrasted with the tone of his Mexican and Canadian counterparts, who emphasized the gains to all sides of the original deal.

The first-round of talks between Mexico, Canada and the United States began yesterday (16 August), with Lighthizer saying NAFTA needs an update since the 23-year old agreement and economies "are very different than they were in the 1990s".

The Trump administration and other NAFTA critics say the agreement encouraged manufacturers to move south of the border to take advantage of lower-wage Mexican labor.

Duvall also warned that negotiators should avoid swapping any US gains in agriculture in order to boost other business sectors.

In her opening statement, Freeland took a swipe at the USA fixation on cutting its trade deficits, saying: "Canada does not view trade surpluses or deficits as a primary measure of whether a trading relationship works".

And, of course, to proceed into the renegotiation, he has had to seek the permission of Congress through the Trade Promotion Authority so we have a pretty clear sense of what the Americans are looking for.

The U.S. trade representative said he wanted to change the pact to require that duty-free NAFTA products contain more content made within the trade bloc and specifically in the United States. "We've said that Brazil and Argentina are two of the big markets that we're looking at, especially for grains and other basic supplies that come from the United States", Mois├ęs Kalach, the global negotiations coordinator of the Mexican private sector, said Wednesday.


Mexican Economy Minister Ildefonso Guajardo said, "I am not denying that there have been some transfer of jobs".

"For a deal to be successful, it has to work for all parties involved". He did, on his first day in office, shelve the Trans-Pacific Partnership which effectively was an updating of the NAFTA but done with 12 countries including Canada, Mexico and the United States.

"The United States seeks to support higher-paying jobs in the United States and to grow the USA economy by improving US opportunities under NAFTA".

The pact also has massively boosted US farm income by increasing agricultural exports to both Mexico and Canada.

The first round of talks will run through Sunday.

Guajardo said he expected the talks this week to lay out opening positions with the hope that when the negotiations resume next month in Mexico City progress can start to be made in narrowing the differences.

Information for this article was contributed by Don Lee of the Los Angeles Times and Andrew Mayeda and Eric Martin of Bloomberg News.

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