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Wilbur Ross, sceptical about border taxes, outlines priorities for NAFTA renegotiation

Commerce Secretary Wilbur Ross, in a March 3 interview, offered insights into general trade priorities and his priorities for the NAFTA renegotiation.

Overall, he said his priorities were:

  • “First emphasis will be on facilitating US exports to other countries, getting rid of both tariff and nontariff barriers to trade.”
  • “The other side of that will be preventing illegally subsidized goods from coming in and really enforcing it. One of the shocks to me when Igot here was to learn that there are billions of dollars of countervailing duties that have been imposed because we won the cases, but never collected.”

Ross also expressed scepticism about the principle of border taxes, adding that “I haven’t said that we’re in accord with anything like a 20% border adjustable tax” He had previously been asked whether Trump’s February 28 speech effectively endorsed a plan by House of Representatives Republicans to levy a border tax of about 20 percent on imports into the United States, and answered “No, he did not.”

On NAFTA he gave three priorities:

  • His major priority on NAFTA seemed to be changing rules of origin, which he described as “far too lenient”
  • He was also concerned about low Mexican wages, pointing out  that:
    • “the theory of NAFTA had been gradual convergence of living standards between Mexico and the US.
    • That really hasn’t happened on the Mexican side.
    • The minimum wage for the peso has barely gone up in peso terms. and since the peso has gone down so severely in dollar terms, Mexican workers are really not at all better off than they had been some time ago.”
  • The savage fall in the peso is part of America’s problem – though he believed a well-managed renegotiation would help the peso regain value.