Daily Management Review

Trump's 'America First' Agenda Looms Large As NAFTA Talks Begin


08/16/2017




The biggest uncertainty in the forthcoming NAFTA talks is whether a deal can pass President Donald Trump's "America First" test as the United States, Canada and Mexico kick off negotiations to modernize the agreement.
 
Shuttering of U.S. factories and sending U.S. jobs to low-wage Mexico has been blamed on NAFTA by Trump. And whether negotiators can prove that a new NAFTA agreement can alter that course will be the test.
 
Amid concerns that a new agreement will unravel a complex North American network of manufacturing suppliers built around NAFTA, the call from the U.S. business community in the run-up to the talks has been "do no harm".
 
Trump pulled the United States out of the Trans Pacific Partnership trade pact shortly after taking office in January and he had made trade a centerpiece of his presidential campaign as he promised to reinvigorate the manufacturing sector. But including declaring China a currency manipulator and tearing up NAFTA, which he regularly calls a disaster, he has since backed off other trade threats.
 
Surpassing $1 trillion in 2015, since NAFTA took effect in 1994, U.S.-Canada-Mexico trade has quadrupled.
 
In the previous NAFTA talks there was a political commitment from all sides to reach a deal. That is not the case now, said Derek Burney, a former Canadian ambassador to Washington who was involved in the first NAFTA negotiations.
 
"The question ... is, What will Trump accept as a success in these negotiations?" said Burney. "To me that is the biggest wild card of all."
 
The "toughest nut to crack" in the talks will be whether changes meet Trump's goals to reduce the $64 billion U.S. trade deficit with Mexico, said Robert Holleyman, a former deputy U.S. trade representative during the Obama administration.
 
"We know where he wants to make changes to NAFTA. Whether those changes lead up to something that actually reduces the trade deficit with Mexico is wholly unclear," Holleyman said.
 
Trump's ability to meet his campaign promises to restore U.S. manufacturing jobs would undergo a major test at the NAFTA renegotiations. His promises of an ambitious legislative agenda have been derailed by the failure of a healthcare bill and the lack of a detailed plan for tax reform although he has inherited a strong economy that has added 1.29 million jobs this year.
 
The upcoming 2018 Mexico presidential election is weighing heavily over the talks. In order to avoid it becoming a political punching bag, Mexico has urged all sides to complete the negotiations before the campaign ramps up in February.
 
Mexican Economy Minister Ildefonso Guajardo, Canadian Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer would lead this week's talks. At the start of the talks being held at a historic Washington hotel, each side is expected to make remarks.
 
According to a senior U.S. trade official, speaking to reporters on the eve of the talks, focusing on merging proposed texts from all three sides, the first round of meetings, which is expected to last until Sunday, will largely be administrative.
 
(Source:www.reuters.com)






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