Now Trump takes aim at Nafta – “the worst deal ever”
No president in history has accomplished as much in as short a time as Donald Trump has – according to Donald Trump. And he’s right, in some ways, said Paul Waldman in The Washington Post. Which other president, after all, “could say that in less than nine months, they did this much damage to the future of American diplomacy”? Trump has already pulled the US out of the Paris climate accord, agreed by nearly every country on Earth, and is threatening to pull out of the Iran nuclear deal, which we made in cooperation with China, Britain and several other countries. And he’s now also threatening to destroy Nafta (the North American Free Trade Agreement). He claims the pact with Canada and Mexico, America’s closest neighbours, is “the worst deal ever”, and is demanding changes to it that the other two countries could never agree to.
One of those changes, said National Review, is a sunset clause that would require the deal to be renewed every five years. That’s a “frankly preposterous” idea, as it would effectively keep the accord “in a constant state of renegotiation”, depriving businesses of any certainty. Yet there are some parts of Nafta that do need to be revisited, such as its terms relating to intellectual property and digital commerce (the deal was signed in 1993, before the internet took off). But this is “scalpel-work, not chainsaw-work”. The last thing America wants to do is blow up a deal that has “been an extraordinary success, raising US economic growth, creating jobs and lowering prices”.
It’s true that Nafta has not been an unalloyed blessing for America, said Paul Krugman in The New York Times. Some firms laid off workers and moved production to Mexico (though others added jobs to produce goods for the Mexican market). But by any measure, its costs were far smaller than those created by Chinese imports, which “in turn were far smaller than those created by changing technology”. Dumping Nafta won’t revive America’s coal industry, or reverse the collapse in truckers’ wages caused by deregulation and the decline of union power; it will just generate another round of disruption and job losses. Until recently, I assumed Trump’s intemperate threats against Nafta were just a negotiation technique. But looking at the way his administration now blames every social ill on the loss of manufacturing jobs – a loss it wrongly attributes to trade deals – I fear he’s really out to destroy Nafta. If he does, the “only question is whether the consequences will be ugly, or extremely ugly”.