Trump starts clock on NAFTA do-over

The Trump administration formally notified Congress on Thursday of its intent to renegotiate the North American Free Trade Agreement, a step forward on a campaign promise that was widely popular among voters but has unsettled the U.S. companies and industries that have constructed their businesses around the 23-year-old trade deal's provisions.

The notification starts the clock on a 90-day period in which Congress will consult with the administration about its goals. Negotiations with Canada and Mexico will begin as soon as Aug. 16.

The statement, sent from U.S. Trade Representative Robert E. Lighthizer to congressional leaders, offered few clues on what the administration hopes to change.

It also did not reflect the harsh rhetoric the president has used to describe NAFTA or the trade practices of Canada and Mexico in the past. On the campaign trail and in office, President Donald Trump derided NAFTA as a 'horrible deal for the United States,” 'the worst trade deal maybe ever” and 'a defective agreement.”

In a call with reporters, Lighthizer stressed the administration hopes to improve the deal rather than scrap it.

Lighthizer, who is the administration's main trade negotiator, said NAFTA has been successful for some industries like agriculture.

Iowa exported about $10 billion worth of agricultural products in 2015, coming in second in overall ag exports only to California. Iowa ranked first in the nation in pork exports alone.

Canada, Mexico and China are among the top destinations for Iowa's agricultural goods.

Sen. Chuck Grassley, R-Iowa, said NAFTA was due for a review to make sure Americans were not 'getting the short end of the stick,” but cautioned negotiators to be careful.

'Iowa is the nation's leading producer of eggs, pork, soybeans and corn and has benefited greatly from free and fair trade with Canada and Mexico,” he said in a statement. 'The Administration should soundly reject any renegotiation that would harm U.S. agriculture, a notable bright spot in the economy of Rural America.”

Iowa Agriculture Secretary Bill Northey, said to be under consideration for a key job in Trump's USDA, was optimistic a renegotiation would help the economy.

'Both Canada and Mexico are key markets for Iowa agricultural products and NAFTA has been hugely beneficial in strengthening those trading relationships, ' he said in a statement. 'That said, there are opportunities for improvement. It is important that trade work as well for the rest of the economy as it does for agriculture.'

The argument that trade deals should be voided or renegotiated to get more favorable terms for the United States were popular with voters, but businesses and some congressmen have expressed reservations, fearing that missteps could bring unintended consequences.

Economists generally agree that NAFTA has benefited the U.S. economy overall. Yet like all trade deals, its benefits generally have been broadly distributed, while its negative consequences have been felt most sharply by a smaller group of people who have lost jobs as industries reorganized.

Tom Donohue, president and chief executive of the U.S. Chamber of Commerce, said the group welcomed the opportunity to modernize NAFTA, which was negotiated under George H.W. Bush and revised and implemented under Bill Clinton.

In recent speeches, Donohue has said that 14 million American jobs depend on trade with Canada and Mexico, and that the first goal of the administration should be to 'do no harm.”

Democrats, many of whom had opposed NAFTA, criticized the administration's vague letter for not appearing to go far enough.

Reps. Richard E. Neal, D-Mass., and Bill Pascrell Jr., D-N.J., called it disappointing 'for those of us who believe that U.S. trade policy - and NAFTA - needs fundamental reform.”

'The tone and substance of the letter cannot be squared with the statements the President made describing NAFTA as a ‘disaster' and the ‘single worst trade deal' the United States ever negotiated,” they said in a statement. 'The letter, on the other hand, emphasizes that the Administration's goal is merely to ‘improve' and ‘modernize' NAFTA.”

NAFTA does not contain regulations pertaining to e-commerce, and it lacks the tougher environmental standards and intellectual-property protections of more recent trade deals.

Yet trade experts point out that such provisions were incorporated in the Trans-Pacific Partnership, a 12-nation trade deal negotiated by the Obama administration.

Trump heavily criticized that deal, too, during the campaign and signed a memo to formally withdraw from it.

The Washington Post contributed to this report.