Japanese Business Interests, USCIB Ask Governors to Push to Preserve NAFTA

The Japanese Business Federation (Keidanren) and the United States Council for International Business wrote to U.S. governors suggesting that foreign-owned U.S. auto and auto parts factories could be endangered if the U.S. trade representative insists on "economically unsustainable" rules of origin for automobiles. "As of 2015, Japanese companies had invested a cumulative $421 billion in the U.S., supporting more than 856,000 jobs in communities throughout the U.S. with average salaries of more than $80,000," the Feb. 21 letter said. The two groups say it's time to update NAFTA to deal with digital trade and intellectual property rights, but that they wish "to emphasize the need to 'do no harm'" in the rewrite.

The letter says the groups support keeping the investor-state dispute settlement mechanism, and they ask that "Buy American" laws not be expanded. "It is important to ensure this critical channel for foreign investment remains open, particularly in light of the need for state, local and private resources in the Trump Administration’s recently announced infrastructure proposal," they wrote. A five-year sunset provision in the new NAFTA would undermine the certainty foreign investors need to open factories in America, the letter said. The letter was sent to each state's governor, in the hope they will lobby an administration that often sounds skeptical of free trade. On Feb. 26, Trump told governors, during a meeting on school safety, that the U.S. is losing in its trade with Canada. "Canada is very smooth," he said. "They have you believe that it's wonderful -- and it is -- for them. Not wonderful for us, wonderful for them."