The letter begins a 90-day window before beginning formal negotiations as early as August 16.
"This initiative presents a significant opportunity to update NAFTA in a way that will increase the export of more American vehicles and auto parts, and grow the number of high-quality and high-paying American jobs supported by such exports".
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.
"Today, President Trump fulfilled one of his key promises to the American people", Ambassador Lighthizer said.
Trump has repeatedly called NAFTA unfair to the USA and a "terrible" deal.
During the required 90-day period, USTR will consult with "Congress and American stakeholders to create an agreement that advances the interests of America's workers, farmers, ranchers, and businesses", he said. Mr. Lighthizer said he hopes to wrap up negotiations by the end of the year, a key goal for officials anxious Mexico's presidential election next year could weigh on the talks.
U.S. Trade Representative Lighthizer has notified Congress of intent to renegotiate NAFTA.
"The world has changed, we've learned a lot and we can make it better", he said.
Canada or Mexico rank as the first or second largest export market for 30 of the 50 states in the country, according to information on the U.S. Trade Representative's website.
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. "I just don't see how Mexico will be able to continue to engage with the U.S." during the months-long period between the election and before the new president is sworn in, said Ortiz-Mena, who is now a senior advisor at the Albright Stonebridge Group.
Lighthizer said he hopes the negotiations will be completed by the end of 2017, but that Trump "wants this done as quickly as possible".
NAFTA's impact on the economy was more modest than partisans on either side of the debate had expected.
"We understand that this is a 25-year-old agreement", he said at a State Department summit on drug cartels with Secretary of State Rex Tillerson on Thursday.
"With this letter, we intend to notify not just Congress, but all our trading partners, that free and fair trade is the new standard for USA trade deals", Ross said in the statement. Ross stressed that the emphasis should be on "free and fair trade." said in a statement Thursday. But that doesn't mean all the negotiating sessions will have to be between the three countries, he added.