NAFTA risks undeniable after latest round of talks

by Josh Sosland
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Josh Sosland
Nothing emanating from the fourth round of North American Free Trade Agreement negotiations raised expectations of a positive outcome. Agricultural interests hoping for inoculation — that a “do no harm” mantra truly had been embraced by the Trump administration — should be more alarmed than ever by the tack the trade talks have taken.

Proposals for a five-year sunset clause and that half the value of all NAFTA-country produced vehicles come from components manufactured in the United States drew derision not only from Mexico and Canada. John Murphy, senior vice-president of international policy at the U.S. Chamber of Commerce, said the administration’s proposals had “no identifiable constituency backing them” and had sparked “a remarkable degree of unity in their rejection.”

Given the range of risks like the possibility Mexico’s tariffs on U.S. corn could rise from about 1% to 38%, it still would appear unlikely the administration would withdraw from a pact so important to agricultural states at the heart of the president’s electoral support. Still, the degree to which U.S. negotiators are moving further from points of reasonable agreement represents an ominous signal difficult to ignore. Similarly, the administration’s seeming determination to wash its hands of the Iran nuclear treaty and challenge the U.S.-Korea Free Trade Agreement in the face of extraordinary practical obstacles suggests it would be the height of folly to shrug off the real risks of NAFTA’s demise.
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