Trump NAFTA plan ‘work­able’ but an­a­lysts warn of pit­falls

Kuwait Times - - BUSINESS -

The Trump ad­min­is­tra­tion’s plans to re­frame the land­mark North Amer­i­can Free Trade Agree­ment faces sig­nif­i­cant hur­dles and in­cludes some el­e­ments Cana­di­ans and Mex­i­cans may find hard to swal­low, an­a­lysts warn. And an ag­gres­sive push by the White House on its tough­est de­mands could re­duce Wash­ing­ton’s abil­ity to achieve a suc­cess­ful out­come.

“If the US pushes Mex­ico too hard, they might make it im­pos­si­ble to reach an agree­ment,” An­to­nio Or­tiz-Mena, former head of eco­nomic af­fairs at the Em­bassy of Mex­ico in Wash­ing­ton, told AFP.

The three na­tions are due to start the talks next month on the 1994 pact that Pres­i­dent Don­ald Trump once called “the worst trade deal maybe ever signed any­where.” In the ne­go­ti­at­ing goals re­leased Mon­day, the White House said it will fo­cus on re­duc­ing its bi­lat­eral trade deficits with each of its neigh­bors. But Canada and Mex­ico al­ready face big­ger trade deficits as a share of their economies than the United States. Last year, the US trade deficit amounted to 2.5 per­cent of GDP, but Mex­ico’s was 2.6 per­cent and Canada’s 3.3 per­cent.

And econ­o­mists say there is lit­tle that govern­ments can do to make an im­pact on the deficit in any case. It is true the US trade bal­ance with Mex­ico be­came a deficit un­der NAFTA-swing­ing from a $1.7 bil­lion sur­plus in 1993 to a $55.6 bil­lion deficit in 2016 but to­tal trade with Canada and Mex­ico more than tripled, reach­ing $1.2 tril­lion by last year. —AFP

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