May 25, 2017 0502 GMT
With a letter to US lawmakers, US Trade Representative Robert Lighthizer said he triggered a 90-day consultation period with Congress, industries and the American public that would allow talks over one of the world's biggest trading blocs to begin by Aug. 16, reported Reuters.
Renegotiation of NAFTA was a key campaign promise of US President Donald Trump, who frequently called the 23-year-old trade pact a 'disaster' that has drained US factories and well-paid manufacturing jobs to Mexico.
Trump has pledged to use the NAFTA talks to shrink goods trade deficits that stood at $63 billion with Mexico and $11 billion with Canada last year, according to US Census Bureau data.
Lighthizer told reporters NAFTA has been successful for US agriculture, investment services and the energy sector, but not for manufacturing. He added that he hopes to complete negotiations by the end of 2017.
"As a starting point for negotiations, we should build on what has worked in NAFTA and change and improve what has not," Lighthizer said in a conference call with reporters.
"If renegotiations result in a fairer deal for American workers there is value in making the transition to a modernized NAFTA as seamless as possible."
In his letter to congressional leaders, Lighthizer said NAFTA needs modernization for provisions on digital trade, intellectual property rights, labor and environmental standards, regulatory practices, rules for state-owned enterprises and food safety standards.
The Obama administration attempted to address many of these deficiencies in the 2015 Trans-Pacific Partnership trade deal, which included Canada and Mexico, but Trump pulled out of TPP in one of his first official acts as president.
Canada and Mexico both welcomed the US move to launch a NAFTA revamp.
Mexican Foreign Minister Luis Videgaray, speaking at a news conference with Secretary of State Rex Tillerson in Washington, said the trade pact needed updating after nearly 25 years.
"The world has changed, we've learned a lot and we can make it better," he said.
Canadian Foreign Minister Chrystia Freeland said Canada was "steadfastly committed to free trade in the North American region," noting that nine million US jobs depend on trade and investment with Canada.
US Chamber of Commerce president Thomas Donohue urged US officials to 'do no harm' to businesses that depend on trade with Canada and Mexico and to move quickly on a new trilateral deal.
As the administration took its first formal step toward NAFTA renegotiations, the US Commerce Department launched an investigation on Thursday into Boeing Co's (BA.N) anti-dumping claims against Canadian rival Bombardier's (BBDb.TO) new CSeries jetliners, drawing a threat from Canada to review a deal to buy Boeing fighter jets.
Lighthizer's letter is less detailed than a draft sent to lawmakers in March, which listed as objectives tax equality and the ability to reimpose tariffs if Mexican and Canadian imports pose a serious injury threat to US industry.
Trump late in April had considered a full withdrawal from NAFTA, but was persuaded by senior officials in his administration to pursue negotiations instead. Lighthizer said he did not think a new threat to withdraw from NAFTA would be necessary.