On November 12, 2017, President Trump made an announcement that he would discuss his trade-deal negotiation during his trip to East Asia during early November. In light of this, you might be wondering about some of the trade-agreements that have been in the spotlight lately, such as the North American Free Trade Agreement (“NAFTA”) and the Trans-Pacific Partnership (“TPP”).
NAFTA was established in 1980. The main purpose for NAFTA is to reduce trading costs, increase business investment, as well as help North America be more competitive in the global market place.
This agreement includes: The United States, Canada, and Mexico.
NAFTA’s purpose is outlined in Article 102 of the agreement. There are seven specific goals, two of which are:
- Eliminate barriers to trade and facilitate the cross-border movement of goods and services, and
- Promote conditions of fair
President Trump has promised to renegotiate this agreement in order to get a better deal for U.S. workers. Making substantial changes to this agreement, such as completely withdrawing is something that could potentially have an effect on your company, especially if it has business deals on a global scale.
The TPP was designed to create a single market that would have a model similar to what is seen in the European Union (“EU”).
The countries involved in the TPP would like to slash tariffs and foster trade as a way to improve economic growth. In addition, this agreement would allow for the countries involved to have a better relationship surrounding economic policies and regulation.
Although this agreement was favored by former US President Barack Obama, President Trump would rather not be a part of it. If the U.S. did decide to pull out of this agreement, it would definitely leave a bitter taste.
This agreement would mean that tariffs on goods manufactured in the US would be gone pretty quickly, but some other products would not be exempt immediately.
There are many different industries that would be impacted by this agreement, some of them being: Carmakers, Farmers, Local Job Markets, Drugmakers, and Tech Firms.6
Since President Trump has not yet made an announcement on his trade-deal negotiations, it is important to be familiar with both of these agreements, as regardless of what the President decides, your company is surely to be impacted.
By: Marissa Graniero, Paralegal Intern