By Lesley Wroughton and David Lawder
WASHINGTON (Reuters) - The United States on Monday outlined a tough negotiating strategy for revising the 1994 North American Free Trade Agreement and for the first time in a U.S. trade deal said it would seek to deter currency manipulation by trading partners.
In a much-anticipated document sent to lawmakers ahead of talks expected next month, U.S. Trade Representative Robert Lighthizer said the Trump administration aimed to reduce the U.S. trade deficit by improving access for U.S. goods exported to Canada and Mexico, the two countries in NAFTA besides the United States.
The document asserts that no country should manipulate currency exchange to gain an unfair competitive advantage.
The 17-page summary of negotiations for NAFTA offers a glimpse into what a Trump administration trade agenda could look like. Until now, President Donald Trump's agenda has been shaped by campaign rhetoric and tweets.
While Canada and Mexico are not considered currency manipulators, the reference in the list of objectives could set a template for future trade deals such as a pending negotiation to modify a five-year-old U.S.-South Korea free trade deal.
South Korea is on a U.S. Treasury monitoring list for possible signs of currency manipulation.
Among the priorities, Lighthizer said the administration would seek to eliminate a trade dispute mechanism that has largely prohibited the United States from pursuing anti-dumping and anti-subsidy cases against Canadian and Mexican firms.
It also plans to eliminate a range of non-tariff barriers to U.S. agricultural exports to Canada and Mexico. These include subsidies and unfair pricing structures.
USTR said it would seek to strengthen NAFTA's rules of origin to ensure that the pact's benefits do not go to outside countries and to "incentivize" the sourcing of U.S. goods. It offered no details on such incentives and did not specify how much of a product's components must originate from within North America.
The demands that the Trump administration makes in the NAFTA talks could have far-reaching implications for U.S. trade relations across the globe, with China keen to make inroads with Mexico and Canada if the United States is seen to be retreating.
Lighthizer said the negotiations would begin no earlier than Aug. 16, 2017.
U.S. labor union leaders and Democratic lawmakers weighed in on the issue early, reminding Trump they expect him to keep 2016 election campaign promises to protect American workers in NAFTA talks. They stopped short of demanding termination of the 1994 trade pact with Canada and Mexico.
Richard Trumka, president of the AFL-CIO, an umbrella organization of unions representing 12.5 million workers, said NAFTA had been an "unequivocal failure" and should be completely renegotiated.
"We will do everything we can to make this a good agreement and to hold the president at his word and make sure we get a renegotiation," he told a conference call with reporters. "If it comes out that it is not a good deal, no deal is better than a bad deal," Trumka said.
NAFTA has quadrupled trade among the three countries, surpassing $1 trillion in 2015. Over a decade to 2010, however, the United States lost nearly 6 million manufacturing jobs. The U.S. trade balance with Mexico also swung from a small surplus in 1994 to deficits that have exceeded $60 billion for most of the past decade.
(Reporting by Lesley Wroughton and David Lawder; Editing by Cynthia Osterman and Howard Goller)