Trump pursuing separate deals with Mexico, Canada
WASHINGTON — President Donald Trump couldn’t get what he wanted from months of three- way trade talks with Canada and Mexico.
So now his administration wants to pursue separate negotiations with the two U. S. neighbors to try to overhaul the 24- year- old North American Free Trade Agreement, which Trump has condemned as a job- killing disaster.
Trump’s top economic adviser, Larry Kudlow, went on “Fox & Friends” on Tuesday to convey the president’s preference for dealing separately with Canada and Mexico. Kudlow said Trump doesn’t plan to abandon NAFTA— something the president has threatened since taking office— but “is just going to try a different approach.”
Yet it’s far from clear that separate discussions by the United States with Mexico and Canada could leave the three- nation NAFTA deal altered but intact.
“It’s impossible to make sense of [ Kudlow’s] statements,” said Michael Camunez, president of Monarch Global Strategies consultancy and a former U. S. Commerce Department official.
By saying there is no plan to leaveNAFTA, “he’s probably trying to keep the markets calm . . . whilewe negotiate separate bilateral agreements.”
Trade analysts said they were skeptical that Canada and Mexico, angry that the U. S. has slapped tariffs on their steel and aluminum, would be drawn into one- on- one negotiations to appease Washington.
“This divide- and- conquer strategy is not entirely unexpected, especially now that the three- way negotiating process seems to have hit a wall,” said Mary Lovely, an economist at Syracuse University.
Trump has frequently expressed his preference for reaching agreements with other countries one at a time, rather than multilateral agreements like NAFTA or a 12- country Asia- Pacific deal he abandoned upon taking office last year. This year, he nudged South Korea into making concessions and accepting changes to a six- year- old trade pact.
“He’s believed that bilaterals have always been better,” Kudlow said, adding: “He hates large treaties . . . When you have to compromise with a whole bunch of countries, you get the worst of the deals. Why not try to get the best of the deals for the American people, the American workforce, the American economy and presumably for their economies as well?”
Most economists say broader trade deals typically work more effectively than one- onone pacts between countries. A hodgepodge of two- country trade deals tends to distort corporate decision- making. Companies will then typically target countries with the lowest tariffs instead of trying to sell to the markets that make the most economic sense.
It “replaces market signals with tariffs and quotas,” Lovely said.