PD Editorial: Free trade lives on in North America under NAFTA 2.0
If you listen to President Donald Trump, you might think the North American Free Trade Agreement had been totally scrapped and replaced with something completely different: the United States-Mexico-Canada Agreement.
Trump called the deal “truly historic,” gushing over his own achievement. “The agreement will govern nearly $1.2 trillion in trade, which makes it the biggest trade deal in United States history,” he said when announcing the agreement.
But, fundamentally, USMCA is nothing more than an update and a rebranding of NAFTA, and it is far from the biggest trade deal ever. Even most of the substantive differences aren’t new. They would have been be implemented under the Trans-Pacific Partnership trade deal that Trump pulled out of on the first full business day of his presidency.
Bruce Hayman, a former U.S. ambassador to Canada, told USA Today that nearly two-thirds of the language in USMCA was lifted from the TPP. Canada, for instance, will ease restrictions on imported dairy products — but not much more than it had already agreed to under the TPP. Changes to intellectual property, patents and other modernizations of the agreement also come straight from the TPP.
Though Trump is, predictably, overselling what he accomplished, we should all be glad that NAFTA didn’t crash and burn. California benefits greatly from trade with Mexico and Canada. Producers of dairy, tomatoes, almonds, peaches, walnuts, flowers, pistachios and more will be better off.
California’s table grape and wine industries are big winners under the deal because they will have much better access to Canadian markets. That’s some small comfort after Trump’s trade policies led China to impose retaliatory tariffs on wine and table grapes.
But it doesn’t mean Trump deserves credit for avoiding the catastrophe he courted — and continues to court in ill-advised trade wars across the globe.
“He started this conflagration with Mexico and Canada, as he has with other trading partners,” Daniel Price, a former trade adviser to President George W. Bush, told the New York Times. “That he may put out the fires after they have destroyed significant acreage does not vindicate either the strategy or the result.”
However, some elements of USMCA that the Trump administration agreed to are surprising, considering the anti-labor sentiment of the administration. Several provisions upgrade weak worker protections in NAFTA.
As part of the deal, Mexico has agreed to pass labor reform laws giving workers the right to union representation, protecting women from discrimination and ensuring that migrant workers are covered by labor laws. Other provisions could boost wages significantly.
Of course, reaching the agreement is only the first step. All three governments will need to ratify it. Some have wondered whether Congress might be a sticking point, especially if Democrats, who might not want to give Trump a win, make gains in the fast-approaching midterm elections.
The complex deal needs to be thoroughly examined and its ramifications analyzed, but Democrats shouldn’t let partisan spite stand in the way of approving what appears to be a decent update and modernization of NAFTA.
The real danger, though, is that Trump will conclude that his disruptive trade strategy has been validated and be emboldened to take even greater risks, which might not pan out next time.
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