‘Profound damage’ if NAFTA is killed

U.S. economy will suffer if Trump builds protectionist barriers, Sen. Ted Cruz says

WASHINGTON— Texas Republican Sen. Ted Cruz warned Tuesday that the United States would face “massive economic costs” if President Donald Trump killed the North American Free Trade Agreement — but that Trump might go ahead and make that decision.

Cruz said, “NAFTA has created millions of jobs across the United States,” and he said, “Texans believe in international trade.” He expressed concern that Trump, whom he generally supports, would seek to use the ongoing NAFTA renegotiation to reduce trade and erect protectionist barriers rather than to expand trade.

Reducing access to the Canadian and Mexican markets, Cruz said, would “do profound damage to the American economy and to Texas in particular.”

“In my view, NAFTA renegotiations can be a good thing or can be a bad thing. And it depends what the objective is of the administration and what the end point is,” Cruz said.

Trump, he said, is being pulled in two different directions by pro-trade and anti-trade voices in his administration.

“Which direction will the administration go? I will tell you candidly: I don’t know,” Cruz said.

Cruz’s remarks at the pro-NAFTA U.S. Chamber of Commerce underscored the uncertainty that surrounds not only the future of the agreement but Trump’s own intentions.

Trump’s words and actions over the last year have left Canada, Mexico and even the president’s supporters unsure whether he is truly seeking to modernize the two-decade-old agreement or actually trying to weaken or destroy it.

Kansas Sen. Pat Roberts, the proNAFTA chair of the Senate Agricul- ture Committee, asked for the help of businesspeople in attempting to persuade the administration of their perspective.

“We are fighting a pervasive view that our economy has not benefited from NAFTA. And that is simply not right,” Roberts said in his own speech at the Chamber of Commerce.

It is unclear, experts say, if Trump could terminate NAFTA on his own or would need Congress to approve. Congressional approval would be difficult to decide given the positions of Senate Republicans, who Cruz said are nearly united in their protrade views.

Roberts would not say whether he thinks Congress has the right to decide on termination, telling reporters only: “Let’s hope we don’t get to that.”

Gordon Stoner, president of the National Association of Wheat Growers, said growers have already been hurt by the uncertainty caused by the administration’s NAFTA “rhetoric and posture to date.”

He said Trump was treating other countries as if they were the other side of a real-estate deal, to be discarded after the transaction, rather than long-standing partners.

Stoner predicted that the administration’s behaviour on NAFTA would make it harder to get other countries to agree to the bilateral agreements Trump has said he prefers.

“As a negotiator,” he said, “part of what you have to do is understand the person on the other side of the table. I can only think people on the other side of the table are looking at the U.S. right now and saying, ‘Why bother? They’re going to tear it up in five years. They’re going to say it’s a terrible deal. They’re going to walk away from it. Why even invest in the negotiation?’ ”

The fourth round of negotiations ended in acrimony earlier this month as Canada and the U.S. traded blame for their bargaining impasse.

The fifth round is scheduled for Mexico beginning Nov. 17.