As you may recall, now-President Trump went to Mexico during last year’s campaign, and, after he took over the press conference, both Pres. Peña Nieto and he stated that NAFTA should be renegotiated.
If you look up the history of NAFTA, you find:
The United States commenced bilateral trade negotiations with Canada more than 30 years ago, resulting in the U.S.-Canada Free Trade Agreement, which entered into force on January 1, 1989. In 1991, bilateral talks began with Mexico, which Canada joined. The NAFTA followed, entering into force on January 1, 1994.
Considering the changes in technology and global markets that have taken place during the past 23 years, it’s not unreasonable to take a second look at the treaty.
The next round of talks starts today (emphasis added)
One provision designed with that objective is a “sunset” clause that would force Nafta’s expiration in five years unless all three countries act to renew it, said people briefed on the plan.
Other proposals, these people said, would weaken or eliminate the mechanisms aimed at settling disputes between the three countries and curbing the unilateral threats and sanctions that frequently roiled trade ties in earlier years.
None of the U.S. proposals would alter the specific trade terms that have spurred a quarter-century of commercial integration between the U.S., Mexico and Canada, such as tax-free trade across borders.
The Trump administration’s goal appears to be to reduce the incentive to outsource by watering down the pact and reduce its influence on American companies through measures such as undoing the current policy of treating the three economies – Canada, U.S, Mexico – as one, narrowing the amount of U.S. federal spending to the same dollar amount as the trading partners (“dollar for dollar”), and requiring that some products contain not just a certain level of Nafta-regional content, but U.S.-specific content.
This goal goes hand-in-hand with the administration’s deregulation strategy to improve U.S. manufacturing. And, as the WSJ said in the above article, “None of the U.S. proposals would alter the specific trade terms.”
Since the new round of talks starts today, this of course does not mean that is what NAFTA will look like at the end.
However, I would love to see – if only once – an international treaty with an actual sunset clause.
A woman can dream.
Fausta Rodríguez Wertz writes on U. S. and Latin America at Fausta’s blog