NAFTA talks are upon us. What will happen?
Talks between the participating countries in the North American Free Trade Agreement (NAFTA)–The United States, Canada, and Mexico– have already begun, as of August 2017. President Trump has been very obvious in stating his distaste for the agreement, and has pledged to repeal it as a part of his campaign promises. Since then, the President has shifted his views slightly, and has agreed to renegotiate the deal rather than scrapping it in its entirety.
On the other side, Canada and Mexico have been in favor of updating NAFTA, in addition to business lobbying in favor of preserving the agreement, as it covers a total of $1 trillion in trade in North America– in a wide range of products and industries across the countries.
As with any deal, there are pros and cons. For the US, NAFTA has been fruitful for many US industries, like the agriculture industry. However, President Trump persists that the agreement can be linked to the decline in manufacturing jobs. Of course, this is consistent with the protectionist rhetoric that has sprung up in the nation recently.
Ultimately, the US’s goal in this is to lower the trade deficit overall. In addition, the administration has also stated that they wish to strengthen regulations to correctly identify the country of origin.
Canada’s position has been in favor of NAFTA, as the agreement has generally benefitted the economy since its activation in 1994. Indeed, the Canadian economy has grown a total of 2.5% more annually than it would have without the agreement being in place.
Canada will be going into the negotiations with the intention of making it more progressive, with benefits for all three nations.
Mexico has been clear that NAFTA has widely contributed to the development of manufacturing plants, and has boosted many industries, such as the agricultural industry, helping them become more internationally competitive. Mexico will be entering negotiations with the goal to ease seasonal workers’ regulations and the integration of telecom markets.
As negotiations go forward, we will get a more clear idea on how this will affect a range of business practices in the three countries. For now, all we can be sure is that the US, Canada, and Mexico will be pushing for NAFTA to further reflect their interests.