President Donald Trump campaigned hard against the North American Free Trade Agreement, at one point declaring that the tariff-slashing pact with Canada and Mexico, in effect for 23 years, “has been a disaster for our country” and “has to be totally gotten rid of.” If our neighbors to the north and south did not agree to renegotiate, Trump added, then he would serve notice of American intent to exit the deal.
Now that his administration has revealed its draft NAFTA agenda, it would appear that Trump’s bark had little relationship to his bite. In tone, the document is conciliatory. Its preamble takes note of the extensive trading relationships that have flowered under NAFTA, and speaks of the great “potential . . . benefit” to the United States of “improving” it. In substance, it is conventional: a list of implicit but clear allusions to long-standing U.S. concerns such as domestic-content rules for the North American motor vehicle industry and Canada’s protection of its dairy farms. One controversial point was a reference to “snap back” tariffs as a remedy for undue “import surges” to the United States. But even that mechanism has precedent in the terms of past trade deals, such as the ill-fated Trans-Pacific Partnership.
Speaking of TPP, which Trump also denounced, it actually would have accomplished a good deal of what the president now says he wants for the United States with respect to Canada and Mexico. The NAFTA partners agreed, in return for the benefits, economic and strategic, of what they hoped would be a U.S.-led market-building plan spanning a vast region of the world. Now that TPP has died, thanks in no small part to Trump’s attacks on it during 2016, it’s not clear what inducements he can offer Ottawa and Mexico City to make those same concessions again.
Indeed, the president’s hostile and bombastic rhetoric has probably made it more difficult for the NAFTA countries to deal with the United States. This is true even where the administration raises valid issues, such as its suggested update to automotive industry domestic-content rules, which may not necessarily reflect new supply chains linking Asia and North America, or the rise of a large Mexican auto industry.
Trump’s protectionism during the campaign was so over the top that any moderation now that he’s in power is a relief. But the damage from his rhetoric won’t be easily undone. Even by the notoriously demagogic standards of trade politics, Trump’s vilification of NAFTA may set a record for being simultaneously inflammatory and — we now know — hollow.
Editorial by The Washington Post
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