NAFTA Modernization is a reasonable goal: It’s a fact that NAFTA was negotiated more than two decades ago. We need to modernize the terms of trade between our countries for the realities of the 21st century.
How to Modernize
We need to keep a few guiding principles in mind in order to succeed:
- First, Pursue a True Modernization of NAFTA. A NAFTA for the 21st century must maintain and reach beyond current benefits. Companies of the three countries will benefit from a renewed positioning of North America as the world’s most competitive region, today and in the years to come.
- Second, Reduce Uncertainty. Uncertainty about the future of North America’s terms of trade could weaken growth and investment, undermining our competitiveness as a region. NAFTA negotiations must continue on a steady timeline and backed by political leadership until a win-win-win deal is achieved.
- Third, Keep the Agreement Trilateral. Maintaining NAFTA’s three-party framework is critical as transitioning to entirely new bilateral agreements presents real risks. Such a transition could disrupt the flow of commerce and cost jobs. Also, moving to divergent rules would add to costs for companies and erode their global competitiveness.
- Fourth, Ensure a Seamless Transition. Interrupting the $1.3 trillion in annual trade across our borders or reverting to the high tariffs and other trade barriers that preceded NAFTA could put at risk millions of jobs that depend on trade within the region. A modern NAFTA should retain the existing benefits that our businesses depend on. This approach would simplify and expedite the process and minimize the risk of disruption.