Retailers outline priorities for NAFTA modernization

by Inside Logistics Online Staff

The National Retail Federation (NRF), an organization that represents the interests of retailers from the United States and 45 other countries, including Canada, outlined the American retail industry’s priorities for the negotiation of a modernized North American Free Trade Agreement.

“The agreement has benefited US importers and exporters, and more importantly, US workers and consumers,” NRF president and CEO Matthew Shay said in a letter to US Trade Representative (USTR) Ambassador Lighthizer detailing the retail industry’s comments on NAFTA modernization.

“We applaud the administration for the re-evaluation of NAFTA. NRF and its members are very supportive of NAFTA, as well as other free trade agreements that not only open up sourcing opportunities for retailers to provide high quality products to US consumers, but those that also open foreign markets for US retailers to sell US-made goods to foreign consumers.”

“Since the agreement was negotiated over two decades ago, it does not reflect today’s global value chain or many new ways of doing business in the global economy” Shay wrote. “A number of its provisions affecting ‘old’ ways of doing business need to be updated and modernized to reflect today’s business environment as well as what may come in the future.”

Broadly, retailers encouraged the administration to: first do no harm to the existing trade relationship, keep the pact trilateral, conclude negotiations quickly and provide a seamless transition for any changes that are agreed upon. NRF notes that NAFTA has spurred economic activity supporting 14 million US jobs in farming, manufacturing and a wide range of service sectors.

The comment letter also outlines key principles on tariffs, rule of origin, Customs and trade facilitation, digital commerce, labour and environment, and enforcement provisions that would improve trade and support better regional integration among the NAFTA partners.

NRF’s suggestions, while specific to Canada and Mexico, are also broad enough to apply to other US trading partners. This is because retailers recognize that the modernized NAFTA will become a model for the Trump Administration’s efforts to negotiate future trade agreements with countries with which the US does not yet have such agreements.

The USTR officially notified Congress on May 18 that President Trump intends to renegotiate NAFTA, setting in motion the 90-day consultation clock under Trade Promotion Authority (TPA).