DISPUTE MECHANISM DISPUTED
Among the other contentious NAFTA issues that U.S., Canadian and Mexican negotiators will tackle starting on Wednesday in Washington is the future of a mechanism for resolving trade disputes.
The United States wants to eliminate a so-called "Chapter 19" provision, arguing that it fails to combat unfair subsidies of some Mexican and Canadian goods. Mexico and Canada have vowed to keep the provision.
Negotiators are expected to pursue new NAFTA chapters governing digital trade, and tightening environmental and labor standards, changes previously agreed by the three countries as part of the now-defunct 12-country Trans-Pacific Partnership.
U.S. negotiators will also seek a provision to deter currency manipulation, aiming to set a precedent for future trade negotiations, such as a revised U.S.-North Korean deal or a bilateral pact with Japan.
The negotiations face an extremely tight timeline, with officials saying they want to complete negotiations by early next year to avoid ratification difficulties posed by elections in Mexico in July 2018 and in the U.S. in November 2018.
Freund, a trade economist for more than a decade at the World Bank and International Monetary Fund, said the negotiators should focus on a few key areas.
"If you really want to do a full-blown modernization of NAFTA, it's going to take a lot more than six months," she said. "Ultimately I think they're going to get bogged down in all these details and pick two to three things and have a smaller agenda."
