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November 20, 2017

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US companies try to sway Trump to save NAFTA

THE business world is mobilizing to convince the Trump administration to save the North American Free Trade Agreement, which corporate leaders say has greatly benefited the world's largest economy for 23 years.

With televised ads proclaiming “NAFTA works for America” and study after study enumerating the dangers of withdrawing from the treaty, the US Chamber of Commerce and like-minded trade proponents have taken their message to Capitol Hill.

The effort has taken on added significance now that negotiators from Canada, the United States and Mexico working to overhaul the treaty are conducting their fifth round of talks in Mexico City.

“We — along with several other business, agriculture, and industry groups — made the case on the Hill in recent weeks. On October 24, the group talked about NAFTA with all 100 Senate offices,” a spokeswoman for the US Chamber of Commerce said.

Their message: exiting NAFTA would be a grave mistake that could, among many other painful outcomes, devastate American agriculture, including wheat producers, according to the chamber.

According to Monica De Bolle, senior fellow at the Peterson Institute for International Economics, an outright US withdrawal remains “a very, very clear possibility.”

The last round of talks in October saw radical propositions from the US side, including a “sunset” clause — which would require the three sides to renew the treaty in five years, failing which it would expire — and a call to scrap the trade dispute arbitration mechanisms in Chapter 19 of the agreement.

Both proposals are anathema to investors, and were immediately rejected by Mexico and Canada.

They were also a wakeup call to lawmakers and businesses who until then had not taken President Trump’s threats seriously, said Edward Alden of the Council on Foreign Relations.

“To be fair, this president is hard to predict,” he said. “We’ve never had a president like him before, so it is hard to make a good judgment on what constitutes a laugh and what constitutes a serious threat.”


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