Undeterred by Donald Trump’s decision to shirk much of their advice on climate change, CEOs are nevertheless joining forces to offer guidance on the next big transnational agreement in the president’s sites.
Business leaders from the U.S., Canada and Mexico gathered in Washington recently to swap ideas and make a unified call for the continuation of the three-way North American Free Trade Agreement (NAFTA).
“We urge our governments to preserve and build on NAFTA’s proven benefits for businesses, workers and consumers,” said a joint statement issued by the chairmen of CEO peer group Business Roundtable, the Business Council of Canada and the Consejo Mexicano de Negocios.
To be sure, business groups aren’t interested in maintaining the status quo either. They, too, would like NAFTA, formed in 1993, to be modernized. This could involve incorporating new regulatory reforms adopted in Mexico and Canada, recognizing e-commerce and digital trade and promoting cooperation on infrastructure projects.
“We urge our governments to preserve and build on NAFTA’s proven benefits for businesses, workers and consumers.”
In other words, not the kind of protectionist-style changes that Trump has been touting. “Negotiators must take care not to erect new barriers to the $1.3 trillion in trade across our borders,” the letter said. “Equally, they must avoid disrupting supply chains that enable our companies and workers to produce globally competitive goods and services.”
Negotiations between the three countries are expected to commence mid-August after the administration last month triggered a 90-day notice period.
In the meantime, this week’s resolution to a dispute over sugar tariffs has shown negotiations, while sure to be testing, won’t necessarily crumble in a heap.
On Tuesday, Mexican trade minister Ildefonso Guajardo agreed to stop sending as much refined sugar to the U.S. amid complaints from U.S refiners that subsidized imports were priced too low. In return, the U.S. agreed to allow Mexico to export more raw sugar across the border. More specifically, the ratio of refined-to-raw sugar Mexico exports will be capped at 30%, down from a previous cap of 53%.
The dispute had split the U.S. food industry, with executives on the sugar-refining side supporting increased tariffs and those that put sugar in their products in opposition. The corn industry was also concerned that punishing Mexico could prompt them to retaliate by slapping restrictions on U.S. corn-syrup exports.
“I’m glad to say that Minister Guajardo and his colleagues have been honest and collaborative partners in seeking a fair and sustainable solution,” Commerce Secretary Wilbur Ross said.
But in a sign that there will invariably almost always be a loser, American raw sugar producers complained of a raw deal.
Farmers more generally, however, appear optimistic that Trump can do as he promised on the campaign trail and boost American industry.
A new survey of 400 agricultural producers across America conducted by Purdue University and CME Group found that 83% were in favor of renegotiating NAFTA, while 63% thought it was likely the outcome would be beneficial for the U.S. economy.