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NAFTA has ‘fundamentally failed' Americans, says Trump’s top trade official: Dale

“We cannot ignore the huge trade deficits, the lost manufacturing jobs, the businesses that have closed or moved," said U.S. Trade Representative Robert Lighthizer. "The numbers are clear."

U.S. Trade Representative Robert Lighthizer says U.S. President Donald Trump is not interested in just tweaking and updating NAFTA.

EVAN VUCCI / THE ASSOCIATED PRESS

U.S. Trade Representative Robert Lighthizer says U.S. President Donald Trump is not interested in just tweaking and updating NAFTA.

WASHINGTON—U.S. President Donald Trump’s top trade official opened the renegotiation of the North American Free Trade Agreement with harsh criticism of the deal, saying it has “fundamentally failed” many Americans and cannot not be fixed with mere “tweaking.”

“We cannot ignore the huge trade deficits, the lost manufacturing jobs, the businesses that have closed or moved, because of incentives, intended or not, in the current agreement. The numbers are clear,” U.S. Trade Representative Robert Lighthizer said in his introductory speech.

“The U.S. government has certified that at least 700,000 Americans have lost their jobs due to changing trade flows resulting from NAFTA. Many people believe the number is much, much bigger than that.”

Trump, Lighthizer said at a hotel in Washington, “is not interested in a mere tweaking of a few provisions and a couple of updated chapters. We feel that NAFTA has fundamentally failed many, many Americans and needs major improvement.”

Lighthizer’s remarks underscored the vast gulf between the U.S. and the other two parties to the agreement, Canada and Mexico, whose representatives hailed NAFTA in their own opening statements at a hotel in Washington.

Canadian Foreign Affairs Minister Chrystia Freeland called NAFTA “an engine of job-creation and economic growth,” and she argued that trade between Canada and the U.S. has been “almost perfectly” balanced — though she pointedly noted that Canada does not believe trade deficits or surpluses are the best way to measure if a trade relationship is working.

“Canada is and always has been a trading nation. Our approach stems from one essential insight. We pursue trade, free and fair, knowing it is not a zero-sum game,” Freeland said.

Freeland called NAFTA a “landmark pact,” saying it had produced significant growth in the Canadian economy. She argued that it had also helped the U.S. economy grow.

“It is worth pointing out that we are the biggest client of the United States. Canada buys more from the U.S. than China, the U.K. and Japan combined,” she said.

Freeland delivered her remarks in not only French and English but Spanish. She said Canada would try to cut red tape, harmonize regulations and make NAFTA “more progressive” on labour, the environment, gender and Indigenous people.

Lighthizer conceded that “many Americans have benefited from NAFTA,” referring specifically to the importance of the Canadian and Mexican markets for U.S. farmers and ranchers. But he said the deal had harmed “countless” others, pointing to factory workers.

And he refused to concede that trade with Canada was balanced.

“In recent years, we have seen some improvement in our trade balance with Canada. But over the last 10 years, our deficit in goods has exceeded $365 billion,” he said.

The remarks opened the first round of the multi-round negotiations that the three countries are ambitiously attempting to conclude by the beginning of 2018.

This round will run from Wednesday to Sunday. The next round will likely occur in Mexico in September, the third round in Canada after that.

The negotiations are happening at the insistence of Trump, who campaigned on a promise to alter or terminate the deal. Trump has called NAFTA the worst trade deal in American history.

A senior U.S. trade official, speaking on condition of anonymity, told reporters Tuesday that the talks would begin with each country submitting large quantities of proposed text for a revised agreement. They will put “brackets” around the areas on which there is not yet agreement.

There is broad agreement on the need to modernize the 23-year-old agreement to include provisions on the digital economy that did not yet exist when the original terms were negotiated.

But there are also major disagreements. One Canadian government official, speaking on condition of anonymity, called the situation “volatile.”

“I know we all agree NAFTA needs updating. It’s a 23-year-old agreement, and our economies are very different than they were in the 1990s,” Lighthizer said — but “after modernizing, the tough work begins.”

The U.S. wants to do away with the “Chapter 19” provisions that create an independent system, outside national courts, for resolving NAFTA disputes. Canada wants to keep it.

And Canada has a number of demands that may be tough sells with the Trump administration: freer cross-border movement of professionals, new chapters on gender rights and Indigenous peoples, tougher environmental rules, and more access for Canadian companies to U.S. government contracts.

Trump has made “Buy American” one of his key mantras, endorsed a proposal to cut legal immigration in half, and rapidly slashed environmental regulations.

It seemed likely, as usual, that the subject of continental trade would receive more attention in Canada than the U.S., whose news coverage this week has been consumed with the fallout from the weekend violence at a white supremacist event in Charlottesville, Va. None of Trump’s eight tweets on Wednesday morning was about NAFTA.

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