Former Ambassador Tony Garza Applauds Greg Abbott’s NAFTA Advocacy

The Texas governor supports continued negotiation of contentious NAFTA issues, including rules of origin, and investor state provisions.

By Jill AmentApril 5, 2018 11:39 am,

It seems as though President Donald Trump wants to tie border security to the ongoing negotiations over the North American Free Trade Agreement, or NAFTA. The pact between the U.S., Mexico, and Canada has been in place for 24 years.

Texas Gov. Greg Abbott has written to the U.S. trade representative urging him to keep two key NAFTA provisions intact: one is a dispute resolution mechanism and the other is a provision on so-called rules of origin for goods that cross the border.

So far, NAFTA negotiators from the three countries have completed seven rounds of talks, aimed at ironing out their differences and updating rules. Tony Garza, who served as the U.S. ambassador to Mexico during the George W. Bush administration, says it’s unclear whether an eighth round of negotiations will occur this month, and whether conferees will meet Trump’s May 1 deadline for creating an agreement he would support. Garza says that instead of a formal round of talks, the trade representatives from Canada, Mexico, and the U.S. could meet as early as Friday in Washington for discussions.

“They will focus on how much can we realistically expect to resolve in the contentious areas – the rules of origin, investor state protections, these sorts of things,” Garza says. “If there is a sense they can get there, perhaps they will move into round eight.”

Trump’s May 1 deadline puts pressure on negotiators, Garza says. The exemptions Trump granted to Mexico and Canada to recently-imposed tariffs on steel and aluminum are due to expire. Delay beyond that date could also make it difficult for the administration to obtain needed congressional approval as summer recess and midterm elections approach. Finally, there’s a July 1 presidential election in Mexico.

Garza says that NAFTA negotiations would be complicated even if the president were not exerting pressure to end or substantially change the trade agreement. Far more than was the case when the agreement was signed in 1994, NAFTA countries share production of goods, making it difficult to arrive at trading rules that correctly and fairly assign value to goods and manufacturing materials they trade. Auto production is an example.

“I think [negotiations] have been tricky because they’ve focused around deficits, when they really ought to focus how much of this car is really produced as a North American vehicle?”

Garza says he is happy to see Abbott throw his support behind specific NAFTA provisions.

“I think it was important for him to speak specifically to those issues that remain contentious, and with an understanding and an insight on what that means for Texas,” Garza says. “I think [the fact] that the governor was so specific suggests a real understanding of the real impact of trade on jobs there in Texas.”

Written by Shelly Brisbin.