On May 11, 2017, the Senate confirmed Robert Lighthizer as United States Trade Representative (USTR) in an 82-14 vote. Despite bipartisan support as a nominee, Mr. Lighthizer’s confirmation was delayed for months in order to procure a Congressional waiver necessitated by the Trade Act of 1974. Though Mr. Lighthizer is known for representing domestic industries in trade law matters, he also has represented foreign entities, triggering the provision of the Trade Act which states that “A person who has directly represented, aided, or advised a foreign entity…in any trade negotiation, or trade dispute, with the United States may not be appointed as” USTR. This provision may be waived by and with the advice and consent of the Senate.
Outside the waiver, Mr. Lighthizer’s nomination faced some concerns. For instance, Sens. John McCain, R-Ariz., and Ben Sasse (R.-Neb) expressed concerns regarding Mr. Lighthizer’s position on the North American Free Trade Agreement (NAFTA).
As King & Spalding has reported, the Trump Administration has pivoted from positions taken during the campaign to terminate NAFTA to renegotiation with Canada and Mexico. The Administration tied formal renegotiation of NAFTA to Mr. Lighthizer’s confirmation, and ultimately took that step on May 18. The U.S. is required by law to announce its intent to renegotiate 90 days before it can begin talks with Canada and Mexico. USTR Lighthizer’s May 18 letter to Congress states that he is “pleased to notify the Congress that the President intends to initiate negotiations with Canada and Mexico regarding modernization of” NAFTA. Negotiations may begin as early as August.
The 90-day notice occurs against the backdrop of increased tension in North American trade relations. A preliminary countervailing duty ruling from the U.S. Department of Commerce (Commerce) on softwood lumber from Canada garnered great media attention, with Canada now reportedly considering retaliation. In Mexico, trade officials are reportedly threatening to seek business in China to counterbalance U.S. NAFTA withdrawal threats.
As noted above, while President Trump campaigned on a hard line anti-NAFTA stance, on May 26, a group of 32 CEOs from prominent corporations sent President Trump a letter urging him to only update—rather than significantly change—NAFTA.
On May 23, USTR published a request for comments and notice of public hearing on “Negotiating Objectives Regarding Modernization” of NAFTA. This process is designed “to assist USTR as it develops negotiating objectives and positions” for NAFTA modernization negotiations with Canada and Mexico. Written comments and requests to testify at the hearing are due by June 12. A hearing will be held in the main hearing room of the U.S. International Trade Commission (ITC) on June 27. USTR seeks comments on a variety of relevant topics, including rules of origin, government procurement, and trade remedies, among several others. We will continue to monitor the NAFTA negotiations and provide further updates as developments warrant.
