US backs down on NAFTA procurement demands

Date Posted: 20/09/2018 Category:
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US backs down on NAFTA procurement demands

Date Posted: 20/09/2018 Category:

The United States has backed down from the procurement projects it previously demanded as part of the renegotiations of the North American Free Trade Agreement (NAFTA).

Both Canada and Mexico are claiming that the US made this decision because they stood firm against the unfair position that this would impose on them. If their governments had agreed to these conditions, Mexican and Canadian companies would not have been able to bid on government infrastructure contracts. Several anonymous sources said that competing claims by Canada and Mexico led to animosity between the two nations.

Mexico had already hammered out a NAFTA-related deal with the Trump administration in August 2018. While the US and Canada are trying to renegotiate the NAFTA agreement that has helped the continent prosper and thrive, there are still issues concerning cultural differences, the dairy supply chain and dispute resolution.

Canada said that Mexico had made concessions to the deal when it came to automobile products and wage increase for auto workers. The US and Canada opposed the auto production work that was flowing into Mexico due to its cheap and affordable labour.

However, Mexico believes that this was one of the significant reasons for the US backing off on its strict stance concerning governmental procurement projects. The original stance of the US was to limit the ability of Mexican and Canadian firms to bid on its infrastructure projects while giving American businesses more access to similar projects in Canada and Mexico.

When Robert Lighthizer tabled this proposal in autumn 2017, both Canada and Mexico were offended by it. The US had proposed a dollar-for-dollar approach, which would have adversely affected Canadian organisations since its economy is much smaller compared to the US economy.

Unnamed sources said that Mr Lighthizer withdrew the proposal when the NAFTA agreement was being renegotiated in summer 2018 and, as a result, the procurement rules returned to status quo.

Ed Cross

Ed founded Odesma in 2014 with the explicit intent of creating a new kind of procurement consultancy founded entirely on cloud principles. Deploying best-of-breed subject matter experts alongside the best on demand technology to deliver rapid and effective change for customers.

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