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Council Q&A: Changes Could be Coming to NAFTA

We are kicking off a new series, Council Q&A, where we highlight the expertise and knowledge of our council members on the key policy issues we are currently tackling.   To get things started, we asked CanAm Council member Pietra Lettieri Zaffram, a partner at Harris Beach, PLLC, how President Trump’s plan to renegotiate the North American Free Trade Agreement (NAFTA) is likely to impact cross border business and what policy experts think the changes could be.

Zaffram also shared some of the possible changes to NAFTA currently being discussed by the Trump administration and Congress, and how the Partnership’s CanAm Council helps inform these conversations regionally.

Question:  How do you think possible changes in NAFTA will impact companies who have cross-border business?

Answer: Currently, a draft set of White House proposals for changing NAFTA is circulating in Congress.  Key features of the draft at this time include:

  • Develop enforceable rules for conducting e-commerce/digital sales/data warehousing across North American borders. (No actual rules have yet been proposed),
  • Impose stronger labor and environmental standards consistent with those in the U.S. (This is thought to be aimed at Mexico, to increase labor union and environmental compliance costs there and consequently cause the price of Mexican goods to increase, comparable to those in the U.S. and Canada).
  • Authorize tariffs to be used to safeguard ‘national interests;’ so if low-priced goods coming into the U.S. cause “the threat of serious injury to a domestic industry” then the tariffs imposed on those goods at the border can be permissibly raised under international law to target those imports.
  • Canadian and Mexican goods would not receive equal consideration for use in government procurement projects with American-made products (goods from all 3 countries at present must be accorded equal treatment for government contract projects under NAFTA).
  • Employees trying to get work visas through NAFTA could also be impacted. If President Trump decided to pull out of NAFTA, any visas issued under the program would sunset within six months.   There are other options, such as H1B work visas. However, only a limited number of such visas are available each year and distributed by lottery. Additionally, H1B visas are more costly and time consuming to secure than a NAFTA visa.

Question: How does the Partnership’s CanAm Council help drive the conversation around cross-border business in our region?

Answer: The CanAm Council brings together business leaders with a common purpose of expanding both the Southern Ontario and Buffalo Niagara regions into a truly bi-national economy.  With our proximity to the international border and Southern Ontario, we are uniquely positioned to capitalize on business opportunities, advocate for fewer barriers to cross-border commerce, and participate in programs and networking events to stay informed on advocacy initiatives.

Question: What do you see as the strategic advantage of the Partnership’s new membership agreements with the Hamilton Chamber & Greater Niagara Chamber?

Answer: Through the Partnership’s new collaboration with the Hamilton Chamber of Commerce and the Greater Niagara Chamber of Commerce, members of the Partnership have a strategic advantage in accessing a network of thousands of businesses in Niagara and Hamilton, Ontario. These agreements will serve as an additional impetus to build cross-border business relationships and create new opportunities in the bi-national economy.

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