Round Five of the NAFTA talks came to a close last week with little progress to report, fanning concerns in Texas that if the U.S. fails to come to terms with trading partners Mexico and Canada, Texas business would be the worst affected in the months and years ahead.
At the close of talks on Tuesday, Nov. 21, negotiators from Canada and Mexico hinted a new agreement still remains possible if U.S. counterparts become more willing to engage in compromise on difficult issues like the proposed Sunset Clause.
In spite of major differences on a few major issues, the consensus of negotiators following this latest round of talks is that there may be some distant light at the end of the negotiating tunnel. Representatives involved in the discussions reported a glimmer of hope that the next and final two rounds of talks may wrap up as early as next March, a time frame each of the negotiators had agreed on after it became evident in October that the negotiating process could not be completed by the end of the year as hoped.
While a more civil tone to this latest round of talks seems to have been a positive development, not everyone involved in the process feels overly optimistic. All three countries still remain inflexible on key issues according to analysts. The U.S. position on a Sunset Clause, an added demand by U.S. Trade Representative Robert Lighthizer and the Trump Administration, has not faltered. Both Mexico and Canada have expressed strong opposition to the move that requires the trade agreement to be renegotiated every five years.
On the positive side, following the latest round in Mexico City, representatives from the three member nations agreed some progress was made on issues involving food safety measures, regulatory practices, telecommunications, digital trade and custom procedures.
But in spite of that development, Lighthizer said he needs to see more "meaningful progress," and emphasized that both Mexico and Canada need to come back to the table "in a meaningful way" in future talks if there is any hope an acceptable agreement can be reached.
While the Trump Administration has expressed confidence that a hardline approach in the negotiations is the only way forward to improve the agreement for the United States business sector, not everyone agrees. The number of farm groups and other business and industry representatives expressing concern continues to grow, with added worries over the negative impact that would result if an agreement is not reached.
Earlier this month, Justin Yancy, President of the Texas Business Leadership Council, penned a Texas Monthly guest column critical of the administration's strong-arm tactics designed to force Mexico and Canada to accept stiff requirements put forth by U.S. negotiators if they hope to keep the U.S. engaged in the NAFTA agreement.
Yancy said President Trump's threat to withdraw from the agreement is not only counter-productive to the negotiating process but would spell disaster to Texas businesses if he carried through with the threat.
TEXAS JOBS AT STAKE
"Whether you are a banker in Dallas or a farmer in Lubbock, make no mistake, withdrawing from NAFTA would be devastating for Texas," Yancy wrote. "Not only is Mexico the Lone Star State’s largest trading partner, but more than 380,000 jobs in Texas directly depend on trade with Mexico."
Yancy said those jobs include workers in the electronic and manufacturing industries, as well as those involved in agriculture. In addition, he estimated that more than 125,000 small and medium-sized businesses in Texas were directly involved in shipping or providing services to Canada and Mexico last year.
He said Texas alone shipped more than $125 billion in goods to Mexico and Canada last year, and goods crossing the Texas border at land ports and headed into Mexico represent more than 75 percent of all U.S. trade that crosses by ground transportation.
Yancy concluded the op-ed by saying the politics of fear that has stemmed from free trade "is currently being given preferential treatment over jobs and economic growth." To combat this, he said the Texas–Mexico Trade Coalition and its members are raising awareness about the positive, demonstrable benefits of NAFTA, making sure elected officials and policy makers know "that a Texas without NAFTA is a less prosperous, less competitive place to do business."