Representatives from Canada, Mexico and the United States concluded the second round of talks concerning the renegotiation of the North American Free Trade Agreement in Mexico City on Sept. 5. At the discussion’s conclusion, trade negotiators from all three countries were optimistic that they might reach a mutual agreement by the end of this year. However, this hope does not seem to be realistic, given the lack of progress made at previous NAFTA renegotiation discussions. The first round of discussions, which occurred on Aug. 20 in Washington, D.C., was criticized by President Donald Trump, who tweeted that there was a lack of concrete progress, claiming that Canada and Mexico were being difficult in the renegotiation discussion and threatened to terminate NAFTA altogether.
The third round of negotiations is scheduled for Sept. 23 in Ottawa, Canada and several more are expected to follow. Due to the lack of concrete deadlines for the trade talks as of press time, the three countries could take months or years to reach a consensus.
It is not surprising that the Trump administration is against NAFTA. Since he first started campaigning, Trump has portrayed himself as an “America First” candidate, considering his country’s issues of more importance than those of allies or international events. Trump has claimed that NAFTA hurts blue collar workers in the United States, the group that was his primary voter base during the campaign.
As Trump took office, one of the first actions of his administration was the creation of an executive order that would have taken the United States out of NAFTA. After speaking to the leaders of Mexico and Canada, however, he instead agreed to renegotiate the deal.
During his rallies, Trump claimed that NAFTA cost the United States approximately six million jobs in the manufacturing sector. However, these job losses are not solely NAFTA’s fault.
According to The New York Times, advancements in technology and higher labor productivity are the primary culprits behind job losses. Regardless of NAFTA, manufacturing jobs are disappearing because of automation and cheaper labor elsewhere.
NAFTA is estimated to have cost U.S. citizens around 100,000 jobs in the manufacturing sector, which is approximately one-tenth of 1 percent of the total U.S. labor force, according to Vox.
Additionally, NAFTA has helped U.S. industries much more than it has harmed them. NAFTA provided the opportunity for the United States to access new markets for its exports, including machinery, mineral fuels, plastics and vehicles, among other things. It also further aided U.S. producers by reducing the cost of production and creating more service-based jobs.
All three countries want to amend NAFTA, which, since its implementation in 1994, has not kept pace with recent advancements in technology. For example, NAFTA predates the internet’s mainstream usage, and any revisions made to the treaty should address e-commerce.
Robert E. Lighthizer, the U.S. trade representative, wants to change some of NAFTA’s rules of origin to urge automakers to use more parts from the United States. Additionally, Lighthizer also wants to overhaul the treaty’s dispute settlement system, giving the United States more influence.
Canada is most concerned about low wages in Mexico and the right-to-work laws that have weakened unions and labor standards in some places within the United States, according to The New York Times.
A top priority for Mexico includes finding ways to incorporate President Enrique Peña Nieto’s 2014 energy program into a modernized NAFTA. If this is achieved, Mexico’s energy sector could receive more private investment, and the U.S. trade deficit with Mexico could be reduced.
Besides the slow progress, the aggressive political stance Trump takes might weaken the diplomatic relationship the United States has with Mexico. His inflammatory comments concerning those of Hispanic descent, his insistence on Mexico paying for a wall to be put along the Mexican-American border and his decision to end DACA— the Obama-era action that protected young undocumented immigrants from deportation— might strain the alliance between the two countries.
Canada, Mexico and the United States all agree that NAFTA should be modernized for the current global environment. Whether the countries involved get the provisions they want, Trump sticks to renegotiation or he terminates the United States’ involvement in NAFTA entirely remains to be seen.