America's biggest business group is warning the Trump administration that a withdrawal from the North American Free Trade Agreement would be a "political and economic debacle" that would cost hundreds of thousands of US jobs.
Talking with reporters Friday, John Murphy, a senior official with the US Chamber of Commerce, said the chamber would work to rally support for the trade deal and against the administration's hardline demand for concessions from Canada and Mexico. The comments were unusually blunt for America's biggest business group.
The Trump administration, which has threatened to pull out of NAFTA if the three countries can't agree on far- reaching changes to favour American interests, quickly returned fire.
"The president has been clear that NAFTA has been a disaster for many Americans, and achieving his objectives requires substantial change," said Emily Davis, spokeswoman for the Office of the US Trade Representative.
"These changes of course will be opposed by entrenched Washington lobbyists and trade associations. We have always understood that draining the swamp would be controversial in Washington."
The fourth round of talks to overhaul NAFTA, which was enacted 23 years ago, is scheduled for next week in Washington.
NAFTA erased most trade barriers along the United States, Canada and Mexico and led to an explosion in trade between the three countries. US farm exports soared. US manufacturers moved production, and jobs, south of the border to capitalise on lower Mexican wages. In doing so, they built complicated supply chains that crossed NAFTA borders.
Before the renegotiation began in August, many business and farm groups hoped the Trump administration would settle for tweaking rather than abandoning the trade deal, updating it, for example, to reflect the rise of e-commerce.
But US Trade Rep. Robert Lighthizer declared at the outset that the US wouldn't be satisfied with minor changes.
Instead, the administration has been seeking to ensure that more auto production be made in America to receive NAFTA benefits, that more government contracts go to US companies and that NAFTA expire unless the countries agreed every few years to extend it. It also wants to scrap a dispute- resolution process favoured by Canada.
Murphy, the chamber's senior vice president for international policy, said that businesses "broadly and emphatically" oppose the proposals.
"We are increasingly concerned about the state of play," he said.
The first three rounds of talks dealt mostly issues that weren't in dispute. But Round 4 is expected to move into tougher territory.
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