THE TROUBLES WITH NAFTA UNDER PRESIDENT DONALD TRUMP
With the emergence of a new trading agreement by the US president in November 2018 which was aimed at replacing the former existing trading body between the North America Free Trade Agreement (NAFTA) which has been in existence for about two decades and a half. The new agreement, tagged United State, Mexico and Canada (USMCA). USMCA is essentially NAFTA 2.0, with a few updates. The pact has a slight change which include changes for automakers, stricter labor and environmental standards, intellectual property protections, and digital trade provisions. The role of President Donald Trump cannot be under-estimated in the new dynamism of this trading relationship. Importantly, this change this did not come with surprise considering the fact that President Donald Trump of America has often attempted to drive the US alone as a unilateral power as against the idea of multilateralism. Some examples are the pulling of America out of the Paris Climate Accord and his attack on NATO where he described the later organization has obsolete. These are telling examples of his sentiments against multilateralism.
Under the current Trump era, the future of NAFTA looks bleak as the biggest global hegemony (the US) is pulling itself out of a trading body that needs America now than ever. Amidst the fact that Donald Trump has often championed the cause of America first, an organization in the Trading arena like NAFTA is needed to support the US plan of sustaining its global hegemony.
NAFTA has been undermined by Trump in an era that has seen the rise of right-wing campaigns; from the emergence of Trump’s presidency to the United Kingdom referendum, the elections victory in France of Le Pen, the surge of the Germany extreme right, Italy and Austria, as well as the growing of the extreme right in the Polish government, Bulgaria and Victor Oban style of leadership in Hungary – the stated development in one way or another express a neglect in political crisis in various aspects which justifies why Trump is still seen as a champion of the US project despite removing the US from a number of pacts.
Importantly, in a recent US government agenda where the country outlined a draft of the “annual trade policy agenda” of the United States Trade Representative, the Trump government stated in clear terms what the new relationship is going to look like under a new arrangement. Trump proposes reducing the trade deficit, punishing exchange manipulation and retaliating against unfair trade practices, exercised against the North American interests by non-market economy countries and countries with non-transparent and corrupt trade practices.
He protested against the TPP, signalling the end to the strategy to promote economic integration as the way to prevent the resurgence of nationalist sentiments and violent conflicts of interest. That was the idea behind the construction of the European Union and of the mega trade projects: the TPP and the TTIP, which were the instruments to consolidate USA geopolitical supremacy and to restore the political balance disrupted by the emergence of China as a main political and economic player.
According to President Trump, NAFTA is the most damaging trade agreement to US interests ever signed and Mexico is the biggest threat to national security and U.S. employment, which is why in his first State of the Union address he said: “The era of economic surrender is over. From now on, we expect trading relationships to be fair and to be reciprocal. NAFTA is the triumph of astute Mexican negotiators full of commitments prejudicial to the American national interest. He repeatedly highlights Mexico as the exclusive culprit (with no mention of Canada) of having deceived the US during the negotiations. Nothing could be farther from the truth. He reiterated his menaces to abandon NAFTA if the deal he wishes just after the bilateral Mexico-USA negotiations reach a partial agreement: “There is no political necessity to keep Canada in the new NAFTA deal. If we don’t make a fair deal for the US after decades of abuse, Canada will be out. Congress should not interfere with these negotiations or I will simply terminate NAFTA entirely and we will be far better off.
Such an untruthful picture of the agreement calls for an objective depiction of the negotiating process and a brief illustration of the trajectory of Mexican economy since NAFTA, to demonstrate that Trump’s criticisms are ill-intended and a pretext to impose a new round of negotiations under conditions of extreme power. At the press conference in Davos, he said: “NAFTA’s a horrible deal, we’re renegotiating it. I may terminate NAFTA, I may not – we’ll see what happens. But NAFTA was a – and I went around and I tell stadiums full of people, I'll terminate or renegotiate” during 2017 NBC interview. He adds negotiations are hard and risky because Mexico and Canada harvest all the gains. As late as March 5, 2018, Trump reiterated (in tweets) his assertion on the menace to American security from NAFTA and Mexico drug trafficking.
It is our opinion that Mexico must seize the current opportunity, redefine the policies institutionalized because of NAFTA, and undo the mistakes made in the initial NAFTA negotiations and the structural reforms since the mid-1980s up to now. The answer to this external shock, induced by the stubborn will is to change the norms that have governed bilateral relations for the last 24 years, could be the opportunity of serious reform to the model of national development. There will be losers and winners, it is true. Depending on the players who would lead the changes, it would be expected that balance will not be adverse to Labor as it was for the last 30 years.

BY: EUNICE YAMUSA
School of Post Graduate Kaduna State University.