New tri-lateral trade deal hardly fantastic for U.S.
USMCA won’t benefit American economy as much as Trump promised it would
What is the difference, as far as the president is concerned, between the worst deal ever made and an incredible, spectacular, amazing deal? It’s obvious: Terrible deals are those negotiated by people other than Donald Trump, while fantastic deals are those negotiated, or at least approved, by Donald Trump.
So NAFTA was terrible, while the new NAFTA— despite not being all that different from the old NAFTA — is fantastic.
A month ago, it looked entirely possible that Trump, who considers himself the world’s greatest dealmaker, could go the first two years of his presidency without making any deals at all, on anything. He has walked away from some deals — the Iran nuclear agreement, the Paris climate accord, the Trans-Pacific Partnership — but not done anything new, whether you’re talking about trade, military co-operation, conflict resolution, or even domestic legislation (the one major thing Republicans in Congress did, a tax cut, happened largely without his involvement). Could that be because everyone, especially other nations, looks at him and sees a dishonest, erratic, unreliable partner whom they can’t trust to keep his word? Who knows.
But then last week, Trump signed an update to a free-trade agreement we had with South Korea, making some minor tweaks that might or might not result in more American cars being sold there. At last, a deal! Trump had called the original version, in place since 2012, a “horrible deal.” He hailed the new agreement by saying: “It’s great for South Korea. It’s great for the United States. It’s great for both.”
And now that same script is being written about the new NAFTA, officially called the United States-Mexico-Canada Agreement, or USMCA (unfortunately, “Uh-sum-cuh” doesn’t exactly roll off the tongue). NAFTA, Trump often said, was the worst deal in history. But with just a couple of changes, it’s now going be trumpeted as the greatest thing since the poutine taco.
So what changes? Not all that much. Here are some highlights:
Autos: To qualify for zero tariffs, autos will have to have more of the manufacturing done by high-paid workers.
Dairy: Canada will accept more U.S. milk and dairy products.
Copyright: Canada will extend the term of copyright from 50 years after the copyright holder’s death to 70 years, as the U.S. demanded.
Drug patents: At U.S. urging, Canada will offer enhanced patent protection for drugs, which will make them more expensive to Canadian consumers and increase profits for the drug industry.
Dispute resolution: A NAFTA provision allowing investors to challenge the decisions of governments has been eliminated, while another provision providing for disputes among the three countries to be settled by a panel of representatives from all three has been retained.
For some people, these changes could be significant — like if you’re a dairy farmer outside Grand Forks eager to get your milk into the cereal bowls of Winnipeg consumers — but on the scale of the three nations, it seems pretty minor. It certainly isn’t going to have some kind of enormous, so-much-winningwe’ll-get-tired-of-winning effect on the American economy.
But that’s probably what we should have expected. Trade was always one of the few issues Trump seemed to sincerely care about, along with immigration; long before he became a politician, he would rail about how the United States was getting screwed by other countries who are far more shrewd than we are, and that they’re all laughing at us (Trump seems to have an obsession with being laughed at).
It seems a little silly to take a hugely complex agreement like NAFTA, make a few tweaks to it, change the name, and declare that you’ve actually created something entirely new. But as MSNBC’s Steve Benen observes, this is hardly the first time Trump has focused intently on what something is called, as though that were far more important than what it actually does. It’s not just because Trump is superficial and obsessed with image, though he is; it’s also that he’s obsessed with his image. If you make some changes to NAFTA, but don’t change the name, then the result doesn’t give sufficient credit to him. If he could have called it TRUMPFTA he would have, but short of that, USMCA will have to do.
But what it won’t do is transform the American economy in the way he has promised. No matter what name you put on it.
Paul Waldman is an opinion writer for The Washington Post