Nafta Negotiations: What’s at Stake in the Second Round

The administration has also blamed Nafta for job losses in the United States, a persistent theme during Mr. Trump’s election campaign. But American manufacturers worry that changes to Nafta could disrupt the global supply chain, raising their costs.


How Nafta Changed U.S. Trade With Canada and Mexico

Trade has contributed to economic growth, but changing dynamics have also prompted concerns about lost jobs and the trade deficit. But when something is manufactured in the United States, it is often made up of parts from around the world.

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What does each side want?

While each country will have priorities, three issues have come to the fore.

• Rules of origin

Right now, for example, a car assembled in Mexico is not subject to an import tax if a certain percentage of the vehicle was made in North America. The Trump administration wants to increase that figure, a move that is supported by the biggest automobile union in the United States. Carmakers, however, are wary, saying that such a move could raise their costs.

• Arbitration

Under Nafta, companies in North America can use a system of independent arbitration to force a country to do away with measures that violate the trade deal. The system has been used mostly by Canadian and Mexican companies against the United States, and the White House wants to end it.

• Modernization

One area in which the countries seem to agree is the need to modernize Nafta, which predates the ubiquitousness of the internet. While the sides’ positions differ, updates could address e-commerce and newer workplace and environmental rules.

What has happened so far?

The first round of negotiations was not congenial.

The Trump administration’s representatives railed against Nafta in public while seeking major concessions from their Canadian and Mexican counterparts in private.

“We feel that Nafta has fundamentally failed many, many Americans and needs major improvement,” Robert E. Lighthizer, the United States trade representative, said when the first set of talks began on Aug. 16.

The Canadian and Mexican representatives, however, insisted that the current version of Nafta was…

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