American Coatings Association


U.S. Trade Representative Seeks Comments Prior to NAFTA Negotiations


Trade

On May 23, the Office of the United States Trade Representative (USTR) issued a Federal Register notice requesting comments by June 12 on negotiating objectives regarding the modernization of the North American Free Trade Agreement (NAFTA) with Canada and Mexico. USTR also announced it would be holding a public meeting on June 27 at the U.S. International Trade Commission (USITC) in Washington.

Renegotiating NAFTA is a major goal of the Trump Administration, and NAFTA talks could begin later in August (no earlier than Aug. 16).

Among the issues that the USTR is expected to revisit in NAFTA talks are unfair currency practices; the “rules of origin,” which dictate the amount of North American-made parts that must be used in assembled products such as cars; the process by which foreign companies can be challenged in court by the state; and the ability of government contracts to give preference to U.S. companies. Prior to confirmation, Lighthizer had said he would work to ensure that NAFTA is updated to include enforceable labor and environmental standards.

The USTR is the lead U.S. negotiator on trade agreements and has responsibility for enforcing trade agreements and advising the U.S. government on international trade policies. The USTR is charged with implementing key trade statutes, including those requiring work to identify and address unfair trade barriers and weaknesses in foreign government intellectual property enforcement and protection.

Most U.S. paint and coatings companies are in the global marketplace. Economic data indicate that the coatings industry has benefited from NAFTA.  The U.S. paint and coatings industry exports to Canada ($1 billion) and Mexico (over $500 million) in 2015 totaled $1.5 billion.  These NAFTA partners have consistently been the two largest export markets for the industry.

As such, ACA is focused on federal trade policy and urges Congress to continue working to ensure a level playing field for U.S. exports. The U.S. market is largely open to imports from around the world, but some countries continue to levy tariffs on U.S. exports that, in some cases, are extremely high. Foreign governments have also erected other barriers against U.S. goods and services. America’s trade agreements, however, work to create a level playing field; and by tearing down foreign barriers to U.S. products, these agreements have a proven ability to make big markets even out of small economies. ACA is encouraging Congress to work with the current Administration in a bilateral manner to promote U.S. exports, remove tariff and non-tariff barriers to U.S. goods and services, and increase access to markets through free trade agreements and other bilateral and multilateral agreements.

The USTR is seeking comments on several issues, including the following:

  • General and product-specific negotiating objectives for Canada and Mexico in the context of a NAFTA modernization;
  • Economic costs and benefits to U.S. producers and consumers of removal of any remaining tariffs and removal or reduction of non-tariff barriers on articles traded with Canada and Mexico;
  • Treatment of specific goods;
  • Customs and trade facilitation issues;
  • Appropriate modifications to rules of origin or origin procedures for NAFTA qualifying goods;
  • Sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT) imposed by Canada and Mexico;
  • Barriers to trade in services between the United States and Canada and Mexico;
  • Digital trade issues;
  • Trade-related intellectual property rights issues;
  • Investment issues;
  • Competition-related matters;
  • Government procurement;
  • Issues of relevance to small and medium-sized businesses;
  • Trade remedy issues;
  • State-owned enterprise issues that should be addressed in the negotiations; and
  • Labor and environmental issues.

ACA is working with National Association of Manufacturers to collect industry data. To submit comments, or to request to participate in a public hearing on June 27 at the U.S. International Trade Commission in Washington, D.C., visit https://www.regulations.gov/document?D=USTR_FRDOC_0001-0413.

Contact ACA’s Allen Irish for more information.


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