Nafta Revamp Is Slowed by Senate Maneuvering

By Natalie Andrews and Jacob M. Schlesinger Features Dow Jones Newswires

The U.S. won't be able to start renegotiating the North American Free Trade Agreement until late summer at the earliest, as congressional delays bog down one of President Donald Trump's top-priority agenda items.

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The latest snag emerged this week when Arizona Republican Sen. John McCain -- a staunch free-trade backer who has raised doubts about Mr. Trump's "American First" trade policy -- said he wanted to slow down the Senate's approval of Mr. Trump's trade representative, a step required before the talks can begin.

Two weeks after Mr. Trump tried to create a sense of urgency around rewriting the 23-year-old pact by threatening to pull out of it, the timetable for launching the renegotiations remains months away. The slowdown has irritated Mexican and Canadian leaders, who say the uncertainty over the region's trade rules has chilled investment. It also means the talks risk spilling into election years in both the U.S. and Mexico, complicating completion over the next year.

The main cause of the delay is the fact that Senate has yet to confirm Mr. Trump's nominee for U.S. trade representative, Robert Lighthizer. Trade law requires that a confirmed trade representative consult with top trade lawmakers before the White House can seek to negotiate a trade pact -- and that the administration wait 90 days after that consultation before beginning the process with trading partners.

Senate leaders said last week that they would vote on Mr. Lighthizer this week. But Mr. McCain has moved to block quick action.

Mr. McCain told reporters on Tuesday that he has "some questions that I would like answered." Mr. McCain didn't elaborate.

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A McCain spokeswoman later said the questions relate to work Mr. Lighthizer had done as a private lawyer on behalf of foreign governments, his advocacy of trade policies that Mr. McCain considers "protectionist, " and whether he shares Mr. Trump's skepticism about adhering to multilateral free trade agreements, such as Nafta.

That means that Congress can't hold its Nafta consultation until mid-May, and that the mandated 90-day wait before negotiations start won't end until late August at the earliest.

Throughout last year's presidential campaign and in the early days of his presidency, Mr. Trump has regularly decried Nafta as "a disaster," blaming it for accelerating the shift of American manufacturing south of the border, and for expanding the U.S. trade deficit with Mexico. He has said he wants to rewrite the agreement.

Mr. Trump and aides have regularly promised since he took office in January that a renegotiation was imminent, but they have been repeatedly stymied by Capitol Hill.

Mr. Trump expressed his frustration with the congressional delays in an April interview with The Wall Street Journal, decrying "this ridiculous 90-day rule." He added: "We filed a 90-day [notice] 60 days ago, but it hasn't started because they're holding it up and they're holding him up, " a reference to Mr. Lighthizer's stalled nomination.

Mr. Lighthizer is one of the rare Trump nominees who enjoys broad support from both parties, especially Democrats who see Mr. Trump's trade policy as an area where they can support the president. He is likely to win confirmation. But he is the last remaining cabinet-level member who has yet to clear the Senate, as his nomination got caught up for months in a separate, unrelated funding fight between the parties, which was resolved last week.

That appeared to clear the way for Mr. Lighthizer's confirmation this week, and the official start of the Nafta clock. But that could only happen quickly under the Senate's "unanimous consent" procedure. That can only be used if no senator objects to the action. If one senator does object -- as Mr. McCain has -- the request is rejected, and then the Senate needs to take a procedural vote and allow time for debate, before a final confirmation vote. That is now likely to slip to next week.

The latest delay in the Lighthizer vote drew complaints from both sides of the aisle.

Sen. Richard Burr (R., N.C.), a member of the Senate Finance Committee, which oversees trade legislation, said that the lack of a trade representative "makes it pretty tough to do anything trade-related," and that his Republican colleagues blocking the vote "have to decide whether we're going to trade."

"It's a head-scratcher and strikes me as just bizarre," said Sen. Ron Wyden of Oregon, the top Democrat on the finance panel. "It's been a while, and I don't know when they're going to do it."

Write to Natalie Andrews at Natalie.Andrews@wsj.com and Jacob M. Schlesinger at jacob.schlesinger@wsj.com

(END) Dow Jones Newswires

May 09, 2017 19:11 ET (23:11 GMT)