NAFTA was a very flawed agreement. It didn’t provide an equal footing in protecting labor or the environment. It should be amended to guarantee labor organization rights and an indexed livable wage in every signatory nation. It should be amended to insure much stronger protection of the environment all across North America. Only then will it be a fair trade agreement.
What is worse than NAFTA’s flaws would be ending it. A massive supply crimp would increase car part prices . That would mean decreases in automobile and other manufacture produced everywhere in North America. Over decades American companies might gain back what would be lost by the massive catastrophe of ending NAFTA but they might not. China would be the first winner with an easier road to increasing manufacturing than US firms which have abandoned much of the car part supply chain.
Rural America has had reason to lobby against protectionism and tariffs for centuries. Without low border costs there will be very little trade between American countries. Rural depression would ensue. There is simply too much competition in price to allow governments to take 30% at the border when Central and South America have an abundance of every produce. When NAFTA ends rural America goes into the dumpster.
What America needs is not an end to trade but fair trade with equitable livable wages paid across every border of North America and a shared commitment to the environment. Canada has largely endorsed this vision of a future for NAFTA as the oligarchical Bloomberg was alarmed to hear.
But instead of a more equal footing lifting lives across every border Mr Trump takes a different tack. Like the old caricature of liberals and the reality of gunboat diplomats Trump wants to guarantee results of what is better settled in competition. Trump’s unwavering demand is that one half of the parts for cars sold anywhere in North America must be manufactured in the US. This textbook example of inequity wouldn’t be acceptable to any nation not suffering from an invasion and occupation by their trade “partner”. This is the sort of arrangement that former Soviet satellites had to endure. Trump will have to roll tanks into two countries to gain the same sort of leverage necessary to coerce such trade.
Going into the current round of NAFTA negotiations participants expect little. Canada is poised to find new partners overseas
Mexico has already begun to replace US livestock and produce with imports from their south. All talks will likely halt in April for the rest of the year.
Just this weekend Mexico’s beleaguered President Nieto failed to gain Trump’s help in declaring utter rejection of paying for Trumps Great Wall. A planned visit by Nieto to DC was cancelled. The most likely next Mexican administration will be even more emphatic in rejecting Trump’s poison pill trade proposals.
At some point Trump will pull the plug on NAFTA. He will never gain traction on his fiat of US dominance of the region. So he will, as he did with the Israeli capital, tear up NAFTA regardless of dire consequence. He promised, after all! He must give 6 months notice. When will that come?
Tearing up NAFTA might be done after the next President of Mexico completely rejects the demand that half of all car components come from the US. But that would only delay the inevitable. Trump might decide to end the charade in April instead of July. Regardless the next congressional elections will likely be after the rural US economy receives the death warrant that ending NAFTA will become. The auto industry will be sliding into reverse again by the midpoint of the year. Trump’s economy is about to become as dynamic as the Soviet System in it’s death throes as it’s satellites rebelled.
Why are we hurtling toward a likely stupendous smash up? Donald Trump doesn’t like Mexicans. That must be crystal clear. I suspect the impetus for all this sound and fury is that the Donald doesn’t want ‘his’ country to trade with Mexicans. Trump’s wall, like the Chinese Wall, is designed to keep out infiltrators he personally despises. He likely thinks he can patch up things quickly enough with the Great White North. But in just a little while the sound you will hear will be the scream of racism destroying jobs all over the America’s. If we really wanted to reform our trade with Mexico we would address the core issues — Mexico’s paltry wages, weak labor rights here and in Mexico and environmental outrages everywhere. Instead we make demands for poison pills while we wait for the Orange menace to make us all poorer.