With the next round of NAFTA negotiations taking place on the 23rd of January, both Mexico and Canada have taken aim at President Trump — all but demanding the United States stay in the trading bloc. That “NAFTA is bad for the U.S.” is a conceptTrump promoted during his campaign, and it is one he has returned to again and again during his first year in office.
During rallies, then-candidate Trump named NAFTA “the worst trade deal in the history of this country.” And while it is debatable how much the economy would gain or suffer if a complete withdrawal were made, the reactions of the involved nations have been nothing short of shocking.
Trump is a businessman, and as such, is looking for the best deal possible that benefits his (in this case America’s) interests. We have all seen that The Donald will say something outlandish in order to set up his negotiating position, and is then able to “compromise” back to what he actually wants.This is not just an observable tactic; he openly talks about it in his book “The Art of the Deal.”
There are five key demands from the president on NAFTA negotiations; each aimed at improving America’s position within the bloc:
- Lowering present trade deficits between the nations.
- Eliminating subsidies that the president deems unfair.
- Bringing an end to the dispute resolution panel.
- Allow for the sunsetting of the deal every five years pending re-approval.
- Massively update the rules of origin.
It is becoming clearer that if the majority of these demands are not met, the President will seek to begin the 6-month process of withdrawal.
Unsurprisingly, Canada is not happy with the demands. Canadian Foreign Minister, Chrystia Freeland, said, ”While we hope for the best, we look for win-win outcomes. We also need to be very clear that we will defend our national interest.” Apparently, this involves filing a 32-page complaint to the World Trade Organization (WTO), accusing the U.S. of hundreds of “unfair” trade practices.
Many are questioning why, if the NAFTA is so good, would Canada need to resort to an outside body to arbitrate? This action has been described by U.S. Trade Representative Robert Lighthizer (who is attending all rounds of negotiations), as an “attack.”
Canada’s Ambassador to the United States David MacNaughton pointed out that over 9 million U.S. jobs depend on trade and investment north of the border. But this is purposely misleading. It is the same threat that was used during the British Brexit referendum when the Remain side touted figures saying 3 million U.K. jobs were dependant on European Union trade. The reality turned out to be that the jobs had connections with the E.U. but were in no way “dependant.” It is lie designed to create fear in the hearts of the electorate and is known as Project Fear in Britain.
Mexico has responded with almost childish immaturity. According to Fox News:
“Mexican officials have warned they’ll leave the NAFTA negotiating table if President Trump decides to trigger the 6-month process to withdraw from the trade pact.”
This would, of course, be pointless. If Trump decides to withdraw, there will be no NAFTA to continue negotiating; walking away from something that doesn’t exist is no threat at all.
Instead of looking at reasons why neighboring governments might be upset by changes in the status quo, we should be looking at bi-lateral Free Trade Agreements as nothing more than tools with which to get mutually beneficial deals cemented. The reality is that the majority of Americans, Mexicans, and Canadians would feel little impact if NAFTA just disappeared and were replaced with WTO regulations.
Free Trade Agreements have become political pacts rather than economic ones. Both NAFTA and the E.U. were ostensibly touted as economic and commerce measures that had little to do with immigration. But experience and time have proven these goals unattainable at best and untrue at worst.
Immigration is now at the forefront of many FTAs. They have become a method of dealing with overpopulation and struggling public services; with a one-way flow of humanity.
President Trump tackling NAFTA is not just about business deals and the amount of American material in imported car parts, it is about having the ultimate right to control one’s borders and having the final decision reside within a nation’s sovereign government.