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NAFTA Renegotiation Policies That Will Strengthen North America
A recently-leaked draft from the U.S. Trade Representative’s office indicates that an official letter to Congress regarding the North American Free Trade Agreement is imminent. When the letter is sent, it will trigger a statutorily required 90-day window before the Trump administration can begin renegotiations with Canada and Mexico.
Given the leak, the administration’s promised action on NAFTA will likely begin this year and is shaping up to have important implications on the future of North American economic competitiveness. In light of this, the Bush Institute’s policy recommendations for strengthening North American economic competitiveness are a good reference point for what ideas should be brought to the table.
REFORMING THE U.S. PRESIDENTIAL PERMIT PROCESS
Currently, building infrastructure across our borders requires a political determination by the State Department that inevitably leads to a lobbyist-and-consultant battle. The results favor the best-connected and best-funded projects instead of the projects that will increase productivity and competitiveness the most. A reform would reduce the cost of developing cross-border infrastructure, make U.S. manufactured goods more globally competitive, and secure manufacturing jobs.
ENCOURAGING PRIVATE CAPITAL TO INVEST IN CROSS-BORDER INFRASTRUCTURE
There are constraints on federal spending in all three countries that keep some value-adding projects from being completed. Establishing a North American border infrastructure bank to drive a market approach to planning, financing, and coordinating border projects would fill the spending gap.
This kind of approach has been used around the world and would prove effective by synthesizing the best thinking on infrastructure needs, deploying innovative lending instruments to help minimize project risk, and reducing time and resource inefficiency.
PROMOTING A REGIONAL APPROACH TO WORKFORCE DEVELOPMENT STANDARDS AND CERTIFICATION
Varying standards across borders raise the costs of recruiting and training. Using private sector leadership to develop higher standards can drive down these costs and raise productivity, making goods more competitive and jobs more secure.
Expanding access to common technical credentials for frontline work in manufacturing and logistics would enable workers to seek the best opportunities, establish recognizable training criteria, improve the “brand” of technical careers, and strengthen ties among training and certification bodies.
STRENGTHENING COOPERATION ON REGULATIONS
Better cooperation on product regulations can lower production costs and eliminate or prevent differing standards that affect health and safety. These efforts would strengthen competitiveness and secure manufacturing jobs in the region.
ENSURING CONSISTENCY OF SAFETY STANDARDS IN THE EXPLORATION, PRODUCTION, REFINING, AND DISTRIBUTION OF ENERGY
As North America continues to benefit from its boom in the energy industry, common standards can help reduce costs, boost production, and increase productivity. Supporting them with infrastructure expansion can also help preserve the advantages of trade with Canada and Mexico while enhancing the efficiency of energy movement through the region.
Addressing these issues is essential to improving the competitiveness and performance of all three of the North American economies. A renegotiation of NAFTA that supports robust value-adding policies can be an asset to the growth and prosperity of the United States, Canada, and Mexico.
Matthew Rooney is director of the George W. Bush Institute’s Economic Growth Initiative and Brian O’Donnell is an intern in the Economic Growth Initiative.
TARIFFIED: Trade Talk with Matthew Rooney
This week, trade relations between the U.S. and India are continuing to escalate. Earlier this month, the U.S. stopped granting India special trade privileges by taking away the Generalized System of Preferences (GSP) program, and India has responded by enforcing more tariffs of its own. The George W. Bush-SMU Economic Growth Initiative Director Matthew Rooney breaks down the trade conflict: For more information on trade groups and the global economy, visit www.bushcenter.org/scorecard.
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Deporting Salvadorans May Lead to Economic Decline
We should think carefully about a policy whose major impacts are likely to be reductions in employment and economic activity here at home, and increased instability and lawlessness along our borders.
Bush Institute's Laura Collins Talks Immigration on Good Morning Texas
Last week, Deputy Director of Economic Growth at the George. W. Bush Institute Laura Collins spoke with Good Morning Texas about immigration myths. During the interview, Collins had the opportunity to set the record straight and address common misconceptions about legal immigrants living in America today. The segment was inspired from facts released earlier this fall by the Bush Institute in the third edition of America's Advantage: A Handbook on Immigration and Economic Growth. Watch the full Good Morning Texas interview here.