GETTYSBURG, Pennsylvania — “Every trade deal we have is horrible,” President-elect Donald Trump told supporters in an October campaign speech. While Trump’s first 100 days in office may include many domestic reforms, he also seems committed to renegotiating or withdrawing from foreign trade agreements, such as the North American Free Trade Agreement (NAFTA).
Trump plans to give himself greater authority to dictate foreign policy and negotiate international agreements like trade deals, including plans to restructure the U.S. position in NAFTA. The trade agreement currently supports more than three million American jobs and was designed to increase U.S. exports to Mexico and Canada, according to a U.S. trade representative in the president’s office.
The trade representative claims that NAFTA has doubled U.S manufacturing exports, but Trump calls it one of the worst deals our country has ever made. Trump is not alone in his misgivings about NAFTA, and there have been many bipartisan calls for a renegotiation. Senator Bernie Sanders was critical of NAFTA even before it was signed into law in 1994, and campaigned in favor of NAFTA reforms during the 2016 democratic primaries.
While Trump has set a priority of a better deal for U.S. workers, a thoughtful and balanced renegotiation would also stand to benefit Mexico. The Democratic Socialists of America (DSA), which endorsed Sanders for the Democratic nomination, claims that certain principles of fair trade must be applied to any new deal.
The first measure is to safeguard Mexican food sovereignty. The DSA states that the current agreement floods Mexico with grain from the U.S., reducing the competitiveness of rural Mexican farmers and forcing them to find work elsewhere.
Professor of anthropology and agricultural researcher Guadalupe Rodriguez-Gomez posits that NAFTA has left Mexican agriculture overly vulnerable to global trade. The Mexican government must enforce provisions to protect workers’ rights. American businesses are competing against Mexican counterparts with no legal protections for workers, which inevitably leads to labor exploitation. Cementing protection for Mexican workers’ rights could very well indirectly strengthen Trump’s goal to improve opportunities for American workers.
DSA argues that a better trade deal would save money on development assistance. For 2017, the U.S. has $134 million budgeted in foreign aid to Mexico, about $80 million of which has been earmarked to fund democracy, human rights and governance. NAFTA restructuring would create conditions to reduce inequalities and thereby reduce the incentives for migration.
“I am asking you to dream big,” Trump stated while on the campaign trail. “It’s a contract between Donald J. Trump and the American voter.” Obama also pledged to renegotiate NAFTA in the 2007 primaries but never did, citing the poor state of the global economy after he took office.
Many economists worry about the blowback from even touching NAFTA. The Chicago Tribune recently reported that the threat of recession during Trump’s first 100 days in office was very real. The Peterson Institute of Economics estimates that trade renegotiations could cost the U.S. four million jobs and start a recession. Despite warnings, Trump shows no indication that he will not follow through with his campaign pledge.
As part of seven actions expected in Trump’s first 100 days in office, NAFTA reforms can have benefits beyond the U.S. How Trump actually renegotiates NAFTA has the potential to mutually benefit the U.S., Canada and Mexico, ensuring a collective prosperity the likes of which was the intention of the agreement in the first place.
– Tim Devine