20180925Avita to Staff Attachment_040A.pdf

9/18/2018 U.S., Mexico Agree to Weaken Rights to Dispute Trade Practices - WSJ
https://www.wsj.com/articles/u-s-mexico-agree-to-weaken-rights-to-dispute-trade-practices-1535394021 1/3
DOW JONES, A NEWS CORP COMPANY
DJIA 26246.96 0.71%▲S&P 500 2904.31 0.54%▲Nasdaq 7956.11 0.76%▲U.S. 10 Yr -1832
This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visithttp://www.djreprints.com.
https://www.wsj.com/articles/u-s-mexico-agree-to-weaken-rights-to-dispute-trade-practices-1535394021
WASHINGTON—The Mexican government agreed to Trump administration demands to
weaken key provisions of the North American Free Trade Agreement that allow business and
government to challenge other member countries over trade policies.
The changes will make it harder for Canada to join the deal hammered out between the U.S. and
Mexico and announced on Monday. It will also draw opposition from big American business
groups whose support has generally been vital for trade deals to win U.S. Congressional
support.
WORLD
U.S., Mexico Agree to Weaken Rights toDispute Trade Practices
Businesses and governments would face new limitations to challenge the trade policies of other
member countries, though Canada may yet object
Robert Lighthizer, left, the top U.S. trade negotiator, and his Mexican counterpart Ildefonso Guajardo, approached the White
House on Monday after negotiations. PHOTO: LENIN NOLLYEFEZUMA PRESS
Aug. 27, 2018 220 p.m. ET
By Jacob M. Schlesinger
Staff_PR_040(AVA) Attachment A 1 of 3
9/18/2018 U.S., Mexico Agree to Weaken Rights to Dispute Trade Practices - WSJ
https://www.wsj.com/articles/u-s-mexico-agree-to-weaken-rights-to-dispute-trade-practices-1535394021 2/3
U.S. Trade Rep. Robert Lighthizer said, in a briefing Monday with reporters, that the two
countries had agreed to drop a portion of the 24-year-old pact that gives participating
countries the right to challenge penalties imposed by the other nations to combat alleged
“dumping” or subsidies.
The three countries would still be able to challenge such trade cases at the World Trade
Organization in Geneva. But that process is seen as much slower and more cumbersome than
resorting to the panels that have been created specially just for the three Nafta members.
The upshot is that is will be harder for member countries to challenge each other over
allegations of dumping, or selling goods at artificially low prices to grab market share. Canada
has said that preserving that provision—known as Chapter 19 in the current Nafta—is
important for its continued support of any rewrite of Nafta. The Trump administration has
ramped up use of such penalties against Canadian exports over the past year.
“That provision will not exist” if the U.S.-Mexico pact is ratified, Mr. Lightzhizer said.
Mr. Lighthizer also said that the two sides had agreed to soften the Investor-State Dispute
Settlement chapter in Nafta, a provision designed to give multinationals the right to challenge
government decisions in special arbitration panels. Corporations say such provisions make it
easier to invest in foreign countries. The Trump administrations has sought to discourage
American investment abroad.
Mr. Lighthzier said the existing protections would remain for “certain sectors where there’s
contact with the government,” such as oil and gas, infrastructure and telecommunications.
Other industries would have more limited recourse to ISDS provisions, making it harder for
them to use the measures to challenge government regulation as they currently often do. Big
U.S. business groups—backed by Republican leaders in Congress—have warned that weakening
ISDS could prompt them to lobby against the new pact.
While the Trump administration appears to have succeeded in getting Mexico to sign on to its
proposals to weaken the enforcement provisions of the pact, U.S. officials in return
compromised by significantly watering down their demands for a “sunset” provision that
would have made the agreement expire automatically after a few years unless each of the
countries took the active step of renewing it.
Instead of an automatic expiration date, Mr. Lighthizer said the countries would review Nafta
every six years. He also said “the agreement will be for a period of 16 years,” and that after each
six-year review, it would be extended for another 16 years. Mr. Lighthizer didn’t say what would
happen if either side fails to sign off on the review.
Staff_PR_040(AVA) Attachment A 2 of 3
9/18/2018 U.S., Mexico Agree to Weaken Rights to Dispute Trade Practices - WSJ
https://www.wsj.com/articles/u-s-mexico-agree-to-weaken-rights-to-dispute-trade-practices-1535394021 3/3
Copyright ©2017 Dow Jones & Company, Inc. All Rights Reserved
This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visithttp://www.djreprints.com.
Mr. Lighthizer acknowledged that much of the detail—including new auto rules—was complex,
joking “if you’re not confused, you’re just not paying attention.”
Mr. Lighthizer said talks with Canada would now begin immediately with the aim of completing
a three-way deal including Ottawa “by the end of the week.”
He didn’t elaborate on how firm that deadline was, and whether the failure to reach a deal with
by then would prompt the U.S. to try and move forward without Canada.
Write to Jacob M. Schlesinger at [e-mail]
Staff_PR_040(AVA) Attachment A 3 of 3