U.S. Commerce chief sees no major NAFTA talks until later this year

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By David Lawder | WASHINGTON

WASHINGTON U.S. Commerce Secretary Wilbur Ross
said on Wednesday that substantial negotiations to revamp the
North American Free Trade Agreement likely will not get started
until the latter part of this year and could take a year to
complete.

Ross, speaking to Bloomberg Television, said U.S. legal
notification requirements with partners Mexico and Canada create
some built-in delays to the start of substantial discussions.

“You’re talking probably the latter part of this year before
the real negotiations get underway,” Ross said.

The 79-year-old billionaire investor, who was sworn into his
job just last week, said he hoped the renegotiations could be
completed within a year, but it was unclear how long it would
take to see benefits like a smaller U.S. trade deficit with
Mexico.

He said the NAFTA renegotiation would be “complex,” with
more than 20 chapters in the 23-year-old agreement that needed
to be modernized, along with new chapters such as those covering
the digital economy and other sectors that did not exist in the
early 1990s.

Without a U.S. Trade Representative in office, Ross is
taking the lead on trade negotiation issues in the early weeks
of the Trump administration.

In Detroit last week, Mexican economy minister Ildefonso
Guajardo said he was hopeful that Mexico, Canada and the United
States could begin discussions in June to “modernize” NAFTA,
stressing that Mexico would not accept tariffs.

A less belligerent U.S. tone towards Mexican trade in recent
weeks has lifted the Mexican peso from historic lows of
about 22 to the dollar in January to about 19.6.

But Ross said on Wednesday that Mexico would have to make
some concessions to the United States.

President Donald Trump during his election campaign
threatened to slap 35 percent tariffs on Mexican imports. He is
studying a House Republican proposal for a border tax adjustment
system that would levy a 20 percent tax on all imports while
exempting exports. The plan is partly aimed at offsetting
value-added taxes charged on imports by Mexico and many other
countries.

Ross said Trump “has made my job a lot easier by softening
up the adverse parties. What could be better than going into a
negotiation where the fellow on the other side knows he has to
make concessions?”

The new Commerce secretary also said he was not concerned
about starting trade wars, because the United States was already
fighting one.

“We’ve been in a trade war for decades,” he said. “The
difference is now our troops are coming to the ramparts.”



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