Just days after taking office, President Trump is making good on his campaign promises. He signed executive orders to withdraw from TPP and gave a conditional go-ahead to the Dakota Access Pipeline project. The President now wants to renegotiate the North American Free Trade Agreement (NAFTA). He wants to renegotiate with Canadian and Mexican leaders to get a better deal for America. As a result, Canada is currently worried about the impact the negotiations will have on its economy. Mexico, on the other hand, is ready to quit.
None of the countries can predict the way things will unfold. However, Mexican officials hope that the discussions will be restricted to rules, regulations and technical issues. According to Luis de la Calle, a former Mexican trade negotiator, the technical issues cover products containing parts from all over the world to enter North America duty free.
An article New York Times states that Enrique Peña Nieto, Mexico’s President revealed the country’s stand in response to President Trump’s policy. According to the publication, he wants to preserve free trade between Canada and US. In addition, he laid out 10 goals for his government to keep in mind during the negotiations. An article in The Star informs that these also include free flow of remittances, and orderly return of Mexican migrants.
NAFTA exit, a strategy to wring better deal
Many believe that Mexico might not end up quitting NAFTA. It is using the ‘exit’ talk to give themselves a better ground during the negotiations. However, in absence of more information, Mexican businesses opine that having no agreement is better than years haggling and negotiations. According to a report in Bloomberg, Ildefonso Guajardo announced in an interview that the country is willing to exit from NAFTA. “If we go for something that’s less than what we already have, it doesn’t make sense for us to stay,” he said.
NAFTA worse for US
President Trump has criticized NAFTA as “the worst trade deal in the history of this country.” He has also blamed the trade deal for loss of American jobs and promised to renegotiate the deal during his campaign. An article in USA Today states that Trump wants a “tough and fair” NAFTA that can create more US jobs. However, if he cannot negotiate a solution in the best interest of America, then like TPP, he will “give notice of the United States’ intent to withdraw from NAFTA.”
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