Oregon exports and US industrial production are increasing, according to state economists, which could raise the stakes and blood pressure for Oregon businesses and workers as the Trump administration begins negotiations on NAFTA with Canada and Mexico in about a month.
Trump administration officials outlined their priorities for NAFTA negotiations, which drew mixed and nervous reviews on Capitol Hill and among trade groups. Trump objectives include improving market access for US manufacturing, agriculture and services, adding a “digital economy chapter” and adding labor and environmental obligations.
Administrative negotiators will seek to eliminate “unfair subsidies and market-distorting practices by state-owned enterprises” and improve intellectual property, says US Trade Representative Robert Lighthizer.
Texas Republican Kevin Brady, who chairs the House Ways and Means Committee, said Trump’s objectives are “ambitious” in seeking “strong, enforceable rules that go beyond any agreement ever negotiated.” Brady also said an updated NAFTA agreement can’t remove trade benefits currently enjoyed by US businesses.
Utah Senator Orrin Hatch, who chairs the Senate Finance Committee, made an underwhelming comment that he hopes Trump’s negotiating objectives will be “further developed” as negotiations proceed.
Democrats were less subdued. Oregon Senator Ron Wyden, the ranking Democrat on Senate Finance, called the Trump priorities “hopelessly vague” in explaining how they will “benefit the United States on key topics ranging from intellectual property rights and investment, to currency manipulation and government procurement.”
Wyden also jabbed Trump’s team for including what he called “watered down versions of [Trans-Pacific Partnership] TPP proposals” that candidate Trump belittled in his presidential campaign and withdrew from when he became President.
“Before sitting down with Canada and Mexico,” Wyden said, “I expect the Administration to update this summary, shine some daylight on its negotiations and set the bar high for American workers, businesses and farmers, as it promised it would."
Michigan Democratic Congressman Sander Levin said Mexico’s low wages and a lack of workers’ rights have cost many US jobs, but he said Trump’s priorities don’t evince “that a new NAFTA will be different than the old [NAFTA].”
A number of economists said trying to negotiate a better deal based on a goal of reducing trade deficits is “misguided” and could backfire.
The complexity of trade considerations that go into negotiations was illustrated by South Bend Mayor Peter Buttigieg, who has transformed abandoned factories into a business park for technology companies in his Indiana city. In an interview today with CBS News, Buttigieg said unionized American autoworkers in his city are assembling German Mercedes Benz vehicles to sell to consumers in China.
In the May economic forecast, Oregon economists said changes to international trade agreements, not to mention a trade war, would have a larger impact on Oregon, which has an economy that depends on exports, than on many other states. Even though job growth in Oregon has cooled off, the state economy continues to expand and is already the third longest upswing since World War II.