May 5, 2017 9:00 AM, EDT

Commerce Secretary Says TPP Could Form Starting Point for US on NAFTA Talks

Andrew Harrer/Bloomberg News

Commerce Secretary Wilbur Ross said parts of an Asia-Pacific trade deal rejected by the Trump administration could form the basis of a revamped North American Free Trade Agreement.

“There are some concessions that the Nafta partners made in connection with the proposed TPP,” Ross said in an interview May 3 at the Bloomberg Breakaway Summit in New York, referring to the Trans-Pacific Partnership. “There is no reason to throw those away. We would view those as the starting point.”

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Just days after taking office in January, President Donald Trump withdrew from the TPP, a 12-nation trade deal his predecessor Barack Obama supported but that hadn’t been approved by Congress. Other nations in the pact, which also included America’s Nafta partners, Canada and Mexico, have expressed interest in trying to salvage the TPP without the United States.

Trump’s criticism of TPP has been similar to NAFTA, which he blames for hurting U.S. workers and hollowing out the manufacturing sector. He’s threatened to withdraw from the accord if the United States can’t negotiate a new version that reduces its trade deficit, particularly with Mexico.

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Ross’ comments indicate the United States may look for Mexico and Canada to replicate concessions they made in the TPP negotiations. For example, Canada offered to compensate dairy farmers in TPP member countries, while Mexico agreed to labor reforms such as changes to protect collective bargaining.

Ross said NAFTA is “at best an obsolete agreement.”

He suggested the United States will try to toughen so-called rules of origin that govern how much local content needs to be included in products such as cars. The administration also wants to modernize the agreement to cover digital services and improve the accord’s dispute-resolution provisions, he said.