NAFTA 2.0 - Latest Developments on Renegotiation of North American Free Trade Agreement

The first round of the renegotiation of the North American Free Trade Agreement (“NAFTA”) with Canada and Mexico has official drawn to a close, and the second round is scheduled for Mexico City in early September. U.S. companies doing business in Canada and Mexico are urged to monitor and stay abreast of new developments, and assess how proposed changes to the NAFTA could impact their products, operations and supply chains. The following provides a timeline of the NAFTA renegotiation process, and where we may be headed from here. 

Upon the conclusion of all seven rounds, if consensus is reached, the agreement will ultimately be submitted to Congress for approval. Because the President currently has what is known as “Trade Promotion Authority,” Congress must consider the renegotiated agreement, work with the Administration on drafting the implementing legislation, and vote without making any additional amendments to the agreement itself. 

The issues that are likely to pose the most obstacles for the negotiators include raising the NAFTA country of origin content requirements for the automotive sector, and the U.S.’s proposal to eliminate the NAFTA’s Chapter 19 dispute settlement mechanism for resolving complaints about illegal subsidies and dumping.

U.S. companies that have operations in, source from, or market to customers in Canada and Mexico should continue to stay updated on the renegotiation of the NAFTA, reach out to members of Congress and other key government decision-makers, assess how proposed changes to the NAFTA may impact their products and supply chains, and ensure that their companies’ interests are considered and protected throughout this process.

© Polsinelli PC, Polsinelli LLP in California
National Law Review, Volumess VII, Number 244