NAFTA Out, Trump Shows The Art Of His Deal

NAFTA Out, Trump Shows The Art Of His Deal

NAFTA Out, Trump Shows The Art Of His Deal

Almost at the same time he took office, President Donald Trump announced that he wanted a better trade deal than what President Clinton had gotten in the North American Free Trade Agreement (NAFTA) between us, Mexico, and Canada. This caused a ton of heartburn for economists and diplomats, but Trump absolutely hated NAFTA.

At the end of August, the United States had reached a new trade deal with Mexico, but Canada was getting left out in the cold. (Yes, that was a bad joke.) Prime Minister Justin Trudeau wanted that trade deal, but Trump wanted major concessions. The negotiations have been ongoing, and it sounds like Trump has gotten a better deal. On Sunday, it sounded like a deal was imminent.

And while we don’t know all the details, we now know that there is an agreement in place.

NAFTA is no more. Welcome to the USMCA: the United States-Mexico-Canada Agreement.

This was not an easy deal to make between us and Canada.

One of the toughest obstacles was Canada’s demand for an exemption or other form of protection from the president’s tariffs on imported steel and aluminum, which may potentially be extended to automobiles from Canadian factories.

Canada is expected to agree to some form of quota on its shipments to the United States, according to two sources briefed on the talks who asked for anonymity to discuss confidential deliberations. But details remained to be worked out Sunday evening.

Other final issues included U.S. demands for greater access to Canada’s dairy market and Canadian insistence on preserving a dispute settlement process that Washington wants to scrap.

Since the three-nation talks began in August 2017, negotiators have declared and missed several deadlines.

The new deal preserves a regional economic unit that enables North American manufacturers, particularly in the auto industry, to compete against global rivals. Canada and Mexico rank first and second among export markets for U.S. companies. Total U.S. trade with the two countries last year topped $1.1 trillion.

A central objective for the new agreement is restoring “North America as a manufacturing powerhouse” by encouraging U.S. companies to use domestic suppliers rather than companies based elsewhere, (White House advisor Peter) Navarro said.

The agreement will require that 75 percent of vehicles granted duty-free treatment be made in North America versus the current 62.5 percent mandate. It will also require greater use of domestic steel and other materials and establish a new requirement for work to be performed by workers earning at least $16 an hour, which will benefit the United States and Canada at the expense of Mexico.

Any way you slice this, it turns into a political win for the Trump Administration, and allows Trump to talk about delivering on another campaign promise this fall. And he will be campaigning on this, since any new treaty will need to be ratified by Congress… and we all know what the current mood on Capitol Hill is like right now. And some Democrats would love to show off their Resistance cred simply by voting down a trade treaty just because Trump’s name is on it.

Regardless of the next steps, Donald Trump is likely to be pretty pleased with himself over this win. The deal will be picked to pieces by better economists than I am over the next few days, but it is a positive step in the right direction that the United States, Mexico, and Canada have been able to work out a new trade agreement.

Featured image: North America on a globe (image via Pixabay)

Written by

Leave a Reply

Your email address will not be published. Required fields are marked *

Become a Victory Girl!

Are you interested in writing for Victory Girls? If you’d like to blog about politics and current events from a conservative POV, send us a writing sample here.
Ava Gardner