Last week, the United States named an obscure deputy assistant trade representative, John Melle, as its chief negotiator and Mexico named Kenneth Smith as its chief negotiator. The profiles of these two men differ profoundly: while the obscure John Melle graduated from the equally obscure Haverford College with a degree in history and a rather undistinguished 30 year career in government, our chief negotiator, Kenneth Smith – a native of Mexico City – in spite of his name, has a degree in International Relations and Economics from the elite Georgetown University and a masters degree in International Economics from the equally renowned Johns Hopkins University’s School of Advanced International Studies. He started his distinguished professional career as a junior member of Mexico’s NAFTA negotiation team in 1993 and currently holds the post of Commercial Attaché in our embassy in Washington. He will need all of his fortitude, however, when he confronts his brutishly aggressive U.S. counterpart from August 16th to the 20th in Washington and thereafter in 7 rounds at 3 week intervals, negotiating, in addition to the issues listed in the authors’ previous bulletins, the following contentious problems:

 

  • - Trade in services, including telecommunications and financial services: this will include secure commitments from NAFTA countries to provide fair and open conditions for services trade, establishing rules prohibiting restrictions on the number of services suppliers in a given market and requiring that cross-border services suppliers first establish a local presence. Where any exceptions from core disciplines are needed, the negotiation will establish, on a negative list basis, the narrowest possible exceptions with the least possible impact on U.S. firms (implementing the concept of “Nice and easy” for the U.S. while leaving us and Canada out in the cold)

 

  • - Trade in telecommunications: Here the U.S. intends to promote a competitive supply of telecommunications services by facilitating market entry through transparent regulation and an independent regulator, secure commitments to provide reasonable network access for telecommunications suppliers through interconnection and access to physical facilities and scarce resources, while establishing provisions protecting the telecommunications services suppliers' choice of technology. (This will be dangerous to the extent that our domestic market is neglected to the advantage of U.S. companies).

 

  • - Digital trade in goods and services and cross border data flows: In this context the U.S. will insist on securing commitments by us not to impose customs duties on digital products (e.g., software, music, video, e-books) (The intent here is that the SAT would be prevented from levying taxes on these transactions as is now being contemplated by the Mexican government). 

Considering these divisive issues, we would do well to coordinate and collaborate with our Canadian partners as respects the negotiating tactics which will need to be employed in order to counter the hostility of Donald Trump’s team. The Canadians have indicated their implacable opposition to Trump’s interminable versions of “Buy American” restrictions that make a mockery of fair, let alone free, trade. Add to that the multibillion-dollar U.S. agricultural subsidies that impede our exports, regulatory demands such as country-of-origin labeling in the name of consumer protection but really designed to benefit U.S. industry and last, but not least, the U.S. insistence of not only reviving compensatory, punitive snap-back tariffs but to also eliminate the current dispute resolution mechanism composed of trilateral arbitration panels and force any trade dispute into the Federal Court System of the United States! The Canadians have their experience with this nefarious position in their free trade negotiations with the U.S. in 1987: Canadian Prime Minister Brian Mulroney shocked the Americans by simply walking away from the conference table! The result: Washington gave in and abandoned its arrogant position. Now, however, they are going to try again – eliminate, as their priority, Chapter 19 of NAFTA – and Canada responded 5 days ago with the treat of not even showing up at the conference table! If aggressive intransigence is to be the U.S. strategy, there are a considerable number of exasperating tactics available to sabotage the process with the aim of frustrating the U.S.’s zero-sum, total victory game-plan. The authors have the collective experience of decades in international negotiations and know full-well of the devastating effectiveness of the following destructive, deterrent tactics:

  1. 1. Refuse to show up for negotiations. (Canada just started the NAFTA process with this one!)
  2. 2. Keep sessions going until the opposition is so exhausted, they can’t think anymore.
  3. 3. Adjourn for the day before the opposition is finished speaking.
  4. 4. Interrupt the meeting constantly for some reason or other.
  5. 5. Say your team is outraged by the arrogance and the bad faith of the opposition and simply walk out!
  6. 6. Repeatedly arrive so late at the conference, that it is too late for anyone to accomplish anything.
  7. 7. Call a press conference at a different location packed with friendly press and noisy supporters, tell the media confidential details that have arisen in the conference and that the opposition is refusing to negotiate in good faith.
  8. 8. Repeatedly accuse the opposition of cheating, lying and having no integrity.(an easy task against any Trump team, hampered by the increasing chaos in Washington)
  9. 9. Depart from the agreed agenda and start negotiating – in coordination with the Canadian team – a totally different subject – such as illegal immigration.
  10. 10. Disorient the opposition by constantly inventing non-existent facts and doing it in such a rapid-fire way that the opposition has no time to either verify or disprove our facts.

The authors would be delighted to assist our negotiators in any way possible…

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