Trading places

NAFTA is dead, long live NAFTA

ONE OF the president’s trade advisers went on Fox News this weekend—where else?— to announce that NAFTA was dead. Perhaps. But it looks more like the North American Free Trade Agreement is less dead than just updated. Thank goodness.

If President Trump needs a new name for the trade agreements binding the three biggest North American countries together, that’s fine. More than fine, actually. He likes to win, whatever that means to him this week. And this week a win for him is a win for the country—for this country’s workers, farmers and anybody who buys stuff.

It’s taken a year of negotiations— and this president likes the art of the deal. He also likes to keep campaign promises. So now we have the United States-Mexico-Canada Agreement, or USMCA. Like any deal, there was give and take.

Somebody thought it would be a good idea to require that a certain percentage of workers putting together cars and trucks be paid a minimum wage of $16 an hour, including workers in, for example, Mexico. That might boost the pay for a select few Mexican workers and perhaps some workers in the United States. Call it trickling up. But it will certainly increase the costs for the rest of us who buy cars and trucks. Expect to see sticker prices increase in the next two years.

Also, some experts told The Washington Post that it’s possible such rules will drive work for the smallest of cars overseas, meaning fewer jobs here. Once again, your minimum wage at work. (Tell us again why Arkansas voters should use the opportunity next month to increase our minimum wage above those of any neighboring state.) President Trump’s people did get a major victory over Canada’s dairy farm system, and what a system it is. It’s called, ahem, “complex.” Which is how the Canadian dairy lobby likes it. In the end, the papers say President Trump insisted on opening up the dairy market north of the border. And got it.

Steel tariffs are still in place for some reason. Apparently the “marathon” negotiations over the weekend didn’t include this sticking point. Perhaps the better to get an agreement on everything else. But it also appears as though all sides are happy enough—winning enough—that optimism has become the norm. Leaders of all three countries have been telling the press that while steel wasn’t a part of this new USMCA agreement, they are working on separate deals for metals, including steel and aluminum.

Reuters reports: “While changing NAFTA and bringing down U.S. trade deficits was a top Trump campaign pledge, Sunday’s agreement largely leaves the broad deal intact and maintains supply chains that would have been fractured under weaker bilateral deals.”

And that’s fine with American workers and buyers. Not to mention the stock market. It was up nearly 200 points Monday.

What does NAFTA 2.0 mean to the United States’ other trading partners, friendly and otherwise, across the globe? A senior official in American government said the new deal is “a template for the new Trump administration playbook for future trade deals.”

And that was the best news of the day.