Industry associations urge USTR to 'do no harm' on NAFTA

Dive Brief:

Various trade associations and 18 senators wrote to the newly-confirmed United States Trade Representative (USTR) Robert Lighthizer within his first days in office, offering congratulations and stating support for the North American Free Trade Agreement (NAFTA).
The American Apparel & Footwear Association, National Retail Federation, RILA and United States Fashion Industry Association urged the USTR to ensure "renegotiation will 'do no harm' to the successful supply chains that we rely on today."
Similarly, the Senators' letter reiterated the devastating effects leaving or imposing "unnecessary restrictions on trade" with NAFTA partners could have, and the Internet Association earmarked 6 issues related to digital trade (including e-commerce and services) for consideration, POLITICO reported.

Dive Insight:

It's a common practice for industry groups to send congratulatory letters stating their positions to new cabinet officials, but the speed and message of the three letters had a cautionary tone for the USTR, as associations fear the Trump administration's intent to renegotiate NAFTA may have negative consequences if not handled properly. As a result, the pressure on Amb. Lighthizer to "not screw NAFTA up" is high, according to POLITICO.

"There are many companies that would have liked to fight for expanded trade as opposed to 'do no harm,'" United States Fashion Industry Association President Julia Hughes told Supply Chain Dive. Hughes said the decision to include that language came from a realization that "now's not the time" to try and introduce new aspects for the deal.

"We're trying to take a relatively cautious approach," she said. "There's a strong comfort level with the NAFTA supply chain and that's why companies are concerned." The main fear, she says, is that changes to NAFTA could "unintentionally disrupt the business patterns" that have been established over the past 23 years.

However, the industry letters also show trade groups are simultaneously looking to the potential positive effects of a modernized deal. When NAFTA was first negotiated, for example, digital trade both in goods and services had yet to flourish. Meanwhile, the USTR website still recognizes the deal's benefits, noting nearly 60% of goods imported from Canada and Mexico are used to produce Made-in-America goods, and NAFTA trade supports 140,000 small and medium-sized businesses.

Now that Amb. Lighthizer is in place as USTR, his foremost responsibility is ensuring the success of renegotiations. The indicators of success, though, remain up for debate — and industry stakeholders appear to be ready to help define them.