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U.S. and Latin America Trade: Who could be affected by a shift in U.S. Trade Policies?

Trade policy has been at the top of President Donald Trump’s agenda since he began his campaign for the U.S. presidency.  Last month, he signed an Executive Order officially withdrawing the U.S. from the Trans-Pacific Partnership (TPP) agreement, a megaregional trade deal between the United States and eleven trading partners in the Asia-Pacific region.  President Trump’s actions effectively terminated the TPP deal, but only mark the beginning of a broader shift in U.S. trade policy that is expected to follow. 

President Trump’s trade policy priorities also include renegotiating the North American Free Trade Agreement (NAFTA), prioritizing bilateral trade deals, and reexamining other existing trade agreements that he believes have not sufficiently benefited U.S. businesses and workers.  The new administration’s free trade platform has left many Latin American countries wondering whether their trade agreements with the U.S. are next on the list. It is also prompting countries to refocus their own trade policies and pursue new trade opportunities, as evidenced Peru’s newly-commenced talks with India and Mexico’s plans to accelerate trade talks with the European Union.

The United States is currently a party to 14 trade agreements with 20 trading partners, including 11 Latin American countries. The most recent of these agreements are separate Free Trade Agreements (FTAs) entered into by the U.S. with Panama and Colombia, both of which went into force during President Obama’s time in office.  Prior to that, the U.S. concluded an FTA with Peru; the Dominican Republic-Central America FTA (CAFTA-DR) with El Salvador, Guatemala, Honduras, Nicaragua, the Dominican Republic, and Costa Rica; and an FTA with Chile, all of which were signed into law by President George W. Bush.  The longest-standing agreement and the one that has been at the center of recent controversy is NAFTA, which went into effect in 1994 under former President Bill Clinton, a fact President Trump pointed out repeatedly as he criticized the agreement during his campaign against Hillary Clinton, the former First Lady and former Secretary of State under President Obama.

NAFTA renegotiation seems inevitable at this point, given President Trump’s position throughout his campaign and his actions since taking office.  However, the form of any future talks between the U.S., Canada, and Mexico remain unclear, and President Trump has not yet initiated any renegotiation under the procedures set forth under Trade Promotion Authority (TPA).  The future of other existing U.S. trade agreements affecting the region remains substantially more uncertain. President Trump’s nominee for U.S. Trade Representative Robert Lighthizer has not yet been confirmed by the U.S. Senate. Lighthizer represented Brazil during the 1980s, but his positions on Latin America and existing FTAs remain largely unknown. Notably, Wilbur Ross, President Trump’s nominee to serve as Secretary of Commerce, is closer to confirmation and is expected to play a more central role in trade policy than his predecessor. Recently-confirmed Secretary of State Rex Tillerson provided some preliminary comments on U.S. bilateral relations with Colombia and Mexico, but his comments did not indicate how the region’s existing FTAs could be impacted by the shifts in U.S. trade policy. 

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume VII, Number 39


About this Author

Ludmilla L. Savelieff, Policy Attorney, Squire Patton Boggs Law Firm

Ludmilla Savelieff draws on her experience in both domestic and international policy to assist clients on a variety of regulatory, legislative, and legal matters.

Prior to law school, Ms. Savelieff was the Special Assistant to the Chairman of the White House Council on Environmental Quality, where she gained first-hand experience in the daily operations of the Executive Branch. While at the Council, she worked closely with the Chairman and his team of policy advisors in the development and management of significant Administration policies and...

Stacy Swanson, Public Policy Specialist, Squire Patton Boggs Law Firm
Public Policy Specialist

Stacy Swanson helps sovereign governments successfully navigate Washington and understand United States Government policy. She regularly provides clients with strategies which effectively leverage existing relationships to advocate policy objectives before the legislative and executive branches of the U.S. government.