Trump may not get the 'win' he seeks in NAFTA talks

He will find out how hard it is to get an agreement that satisfies workers 'shafted by NAFTA' and the interests benefiting from cross-border sales.

By DOUG PALMER 08/15/2017 05:20 AM EDT Updated 08/14/2017 12:36 PM EDT

This article is part of a continuing series examining the finer points and nettlesome issues as the United States, Canada and Mexico revisit NAFTA.

As a candidate, Donald Trump constantly called NAFTA the worst trade deal in history and promised “to get a better deal for our workers.”


Now that he is president, Trump is about to find out how hard it is to get an agreement that satisfies not only those workers who feel "shafted by NAFTA" but also the powerful business interests currently benefiting from billions of dollars in cross-border sales.

Top trade officials from the United States, Canada and Mexico sit down on Wednesday to begin thrashing over hundreds of issues as distinct as Canadian dairy barriers and digital trade issues affecting both countries.

Even if negotiators from all three nations are able to come to consensus quickly on a new deal in the coming months, Trump still has to get the agreement through Congress, which past votes on trade issues have shown is no easy task.

“This whole business of renegotiating NAFTA was a campaign pledge in search of a constituency,” said Scott Miller, a former lobbyist for Procter & Gamble now at the Center for Strategic and International Studies. “No business community member, no enterprise, no farm group ever asked for this.”

Trump blames NAFTA for shuttering factories across the industrial Midwest. The current reality, however, business groups warn, is that pulling out of the pact would endanger an estimated 14 million jobs that depend on trade with Canada and Mexico — the two largest export markets for the United States.

Miller said he saw at least a 5 percent chance that Trump would get so frustrated that he would make good on a campaign threat to withdraw from the pact, which would damage the economies of many predominantly rural states that voted for him last year. That could divide the party headed into the 2018 midterm election, potentially increasing the chances of Democratic Party gains.

Another possibility is Trump strikes a deal, but there’s so little support in Congress that he never submits it for a vote and the pact is left as is, Miller said, an outcome that would also make him appear weak.


"NAFTA has cost millions of jobs and suppressed incomes across America,” said Rep. Rosa DeLauro, a Connecticut Democrat who led the fight to defeat TPP. "Americans want a better deal: one that addresses our job losses and stagnant incomes by changing provisions in NAFTA that make it easier to outsource good-paying American jobs, as well as eliminating special rules that allow corporations to sue the U.S. government before a private panel of three corporate lawyers for unlimited taxpayer compensation. A free trade deal that actually helps our economy should include strong, fully enforceable labor and environmental protections, and rules to prevent currency manipulation."

On the Republican side, if the White House brings Congress what the party considers to be a bad NAFTA agreement, it could face stiff opposition led by Sen. John Cornyn, the No. 2 Senate Republican, who has urged Trump to modernize the pact, not end it.

The White House seems to have gotten the message that it needs to tread carefully in talks with Canada and Mexico.

"NAFTA needs to be reformed to help protect American workers and create more jobs at home. We should keep the parts that work, especially for much of American agriculture, but fix the parts that don’t," White House chief economic adviser Gary Cohn said in a statement over the weekend, setting a civil tone for the talks. "Working together, we will modernize this agreement to meet the needs of today’s economy, just as the president promised."

Trump also stands to face a revolt from business and farm groups that typically round up support for trade agreements. They are the ones who have the most to lose if he makes drastic changes to the pact.

“Any efforts to modernize the deal must be done the right way and guided by a few key objectives,” U.S. Chamber of Commerce President Tom Donohue said in a speech earlier this year. “First and foremost, do no harm. We must not disrupt the $1.3 trillion in annual trade that crosses our borders.”

That point was underscored by 32 freshman House Republicans in a recent letter to U.S. Trade Representative Robert Lighthizer. Twenty-seven of those new members come from parts of the country that Trump won last year, including Rust Belt states like Pennsylvania and Michigan where his anti-NAFTA message seemed to resonate the most.

"We recognize that a 23-year-old agreement needs updating, and commend your desire to make improvements and ensure strict enforcement," the lawmakers wrote. "We are also keenly aware of the potential for damage to U.S. farmers, businesses, manufacturers, service providers and workers if long-standing agreements are suddenly vacated.”


Meanwhile, labor and environmental groups who have long clamored for changes to NAFTA and other trade agreements are already complaining Trump’s proposed reforms don’t go far enough.

“These objectives largely replicate those of the failed Trans-Pacific Partnership and won’t satisfy the expectations the president created for a revival of America’s manufacturing heartland,” Richard Trumka, president of the AFL-CIO, said shortly after the Trump administration rolled out its goals for renegotiating the pact.


A glimpse of Trump’s tough road ahead can be seen by looking back at a 2015 vote to give former President Barack Obama “trade promotion authority” to finish the 12-nation TPP deal.

Obama tried to sell that agreement as an update of the NAFTA agreement, since it included both Canada and Mexico along with nine other countries in the Asia-Pacific region. Even so, he got support from only 28 Democrats in the House and 13 in Senate.

Congressional aides say it is unlikely that many of the 158 House Democrats and 33 Senate Democrats and independents who opposed Obama on TPP will rally to Trump’s side on a revised NAFTA agreement, especially because the Trump administration's negotiating points borrow heavily from the TPP deal.

Trump's best hope for passage is to craft a revised NAFTA agreement that hews closely to traditional Republican priorities; ignores demands from those Democrats who are unlikely to vote for the pact; and takes the best pieces from the TPP while strengthening other areas, like intellectual property protections, that could muster enough votes for bipartisan approval in both chambers, one lobbyist said, speaking on condition of anonymity to protect his clients.

But for every concession made to pick up Democratic votes, Trump’s chief negotiators will have to calculate how many he loses on the Republican side, one congressional aide said.


The U.S. International Trade Commission is required to do an economic analysis of the new NAFTA before it is submitted to Congress. The panel’s assessment of the much larger TPP pact estimated it would create only 128,000 net new full-time jobs by 2032, and increase gross domestic product by just 0.15 percent over the same period.

Further complicating matters, Mexican voters go to the polls next July to elect a new president. That means Mexican negotiators have a window between now and possibly February to make significant concessions, Miller said. After that, talks could shut down and not resume until the new Mexican president takes office in December 2018, he said.

Striking a deal in the next six months would be extremely fast. To put it in perspective, a recent agreement between United States and Mexico on just one issue — sugar — took months to negotiate. Talks between the United States and Canada on another single issue — lumber — began in the Obama administration and still are not finished. The revised NAFTA agreement could have as many as 30 different chapters, covering all aspects of trade.

However long it takes, Trump will be graded on his work when NAFTA 2.0 is complete. And he risks the possibility that he may not find much to tweet about in the results.

Last edited by Goose (8/15/2017 9:11 am)