The Congressional Research Service says in a report issued last week that there is no clear path for Trump to reduce the USA trade deficit with Mexico, one of his major complaints and an overarching priority for revamping a pact he has repeatedly threatened to tear up.
The fourth round of talks on revising the 23-year-old NAFTA deal wrapped up Tuesday, with more talks set for Mexico next month and additional discussions early next year.
The looser treatment of foreign-exchange issues may frustrate those who have called for tougher language on currencies in trade deals, including US automakers and some American lawmakers.
Noting that she was at a bipartisan dinner Tuesday evening at the home of Ivanka Trump and Jared Kushner, Heitkamp said she emphasized to Trump administration officials that Mexico and Canada are two of the biggest markets for US food products.
The peso has long moved in conjunction with uncertainties over USA trade policy, which you can see in the chart shared by Glossop below.
It suggests using NAFTA to strengthen the Mexican economy to boost imports from the U.S. Trade balances, it notes, are "incomplete measures" of a trading relationship. That situation, he said, has resulted in the large USA trade deficit with Mexico.
Canada is now the country in the best bilateral position, as both Mexico and the United States have expressed interest in continuing trade agreements with the country.
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Last week, Prime Minister Justin Trudeau appeared before the House of Representatives Ways and Means committee, which oversees trade negotiations. Alternate trade objectives are driving a wedge between the US and Canada. It has touted the tightly intertwined supply chains across the USA auto sector. Trade surged within the NAFTA bloc, benefiting American farmers who export corn and other products.
Wrapping up the fourth round of talks on the North American Free Trade Agreement, the US proposed a dismantling of Canada's dairy supply management system.
"NAFTA has resulted in a huge trade deficit for the United States and has cost us tens of thousands of manufacturing jobs".
Lighthizer said he wants to come up with an agreement that both business and labor would support, and said he believes that is possible. (The United States logged an $8 billion trade surplus with Canada in 2016).
Lighthizer said he had no evidence that either Mexico or Canada is willing to "rebalance" this situation. "Any disruption to the economic relationship could have adverse effects on investment, employment, productivity and North American competitiveness", the report states.
"The outcome of NAFTA renegotiations has the potential to affect progress made over the past decade in regard to security, competitiveness, and issues of mutual interest".
"The tradeoff is: either we improve NAFTA or we trade with new rules, those of the World Trade Organization (WTO), but trade with the United States will continue (either way)", Peña Nieto said.