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Trump administration starts countdown to NAFTA talks in mid-August

Reuters  |  WASHINGTON 

By David Lawder

(Reuters) - The Trump administration on Thursday set the clock ticking toward a mid-August start of renegotiations of the North American Free Agreement with and Mexico to try to win better terms for U.S. workers and manufacturers.

With a letter to U.S. lawmakers, U.S. Representative Robert Lighthizer said he triggered a 90-day consultation period with Congress, industries and the American public that would allow talks over one of the world's biggest trading blocs to begin by Aug. 16.

Renegotiation of was a key campaign promise of U.S. President Donald Trump, who frequently called the 23-year-old pact a "disaster" that has drained U.S. factories and well-paid manufacturing jobs to Mexico.

Trump has pledged to use the talks to shrink goods deficits that stood at $63 billion with Mexico and $11 billion with last year, according to U.S. Census Bureau data.

Lighthizer told reporters has been successful for U.S. agriculture, investment services and the energy sector, but not for manufacturing. He added that he hopes to complete negotiations by the end of 2017.

"As a starting point for negotiations, we should build on what has worked in and change and improve what has not," Lighthizer said in a conference call with reporters. "If renegotiations result in a fairer deal for American workers there is value in making the transition to a modernized as seamless as possible."

In his letter to congressional leaders, Lighthizer said needs modernization for provisions on digital trade, intellectual property rights, labor and environmental standards, regulatory practices, rules for state-owned enterprises and food safety standards.

The Obama administration attempted to address many of these deficiencies in the 2015 Trans-Pacific Partnership deal, which included and Mexico, but Trump pulled out of TPP in one of his first official acts as president.

and Mexico both welcomed the U.S. move to launch a revamp.

Mexican Foreign Minister Luis Videgaray, speaking at a conference with Secretary of State Rex Tillerson in Washington, said the pact needed updating after nearly 25 years.

"The world has changed, we've learned a lot and we can make it better," he said.

Canadian Foreign Minister Chrystia Freeland said was "steadfastly committed to free in the North American region," noting that 9 million U.S. jobs depend on and investment with

U.S. Chamber of Commerce president Thomas Donohue urged U.S. officials to "do no harm" to businesses that depend on with and Mexico and to move quickly on a new trilateral deal.

As the administration took its first formal step toward renegotiations, the U.S. Commerce Department launched an investigation on Thursday into Boeing Co's anti-dumping claims against Canadian rival Bombardier's new CSeries jetliners, drawing a threat from to review a deal to buy Boeing fighter jets.

Lighthizer's letter ( is less detailed than a draft sent to lawmakers in March, which listed as objectives tax equality and the ability to reimpose tariffs if Mexican and Canadian imports pose a serious injury threat to U.S. industry.

Trump late in April had considered a full withdrawal from NAFTA, but was persuaded by senior officials in his administration to pursue negotiations instead. Lighthizer said he did not think a new threat to withdraw from would be necessary.

"As the president has said, we are going to give renegotiation a good strong shot," Lighthizer told reporters, adding that he believed and Mexico would negotiate in good faith.

He said he hoped to maintain the current trilateral format of NAFTA, but noted that many of NAFTA's problems are bilateral issues that need to be worked out with either Mexico or

"Our hope is that we can end up with the structure similar to what we have now. If that should prove to be impossible, then we'll move in a different direction."

Asked if the talks would seek to resolve disputes over imports of Canadian softwood lumber or Mexican sugar, Lighthizer said he hoped those issues would be settled before the talks begin under separate negotiations being conducted by the U.S. Commerce Department.

A Canadian source close to the lumber negotiations said it was unlikely an agreement could be reached by mid-August, however.

Lighthizer said he will seek public comment on the process and intends to publish negotiating objectives on or about July 16.

(Reporting by David Lawder and Yeganeh Torbati in and David Ljunggren in Ottawa; editing by Paul Simao and Tom Brown)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)