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Trump Kills NAFTA

President Donald Trump has fulfilled another campaign promise and effectively killed the never “free” North American Free Trade Agreement by concluding a separate preliminary United States–Mexico Trade Agreement that modernizes and rebalances the trade relationship between the two countries.

According to a White House news release this is the first time that a modern United States trade agreement Trump Mexico Callhas been renegotiated.

In a live telephone conversation with President Enrique Peña Nieto of Mexico, President Trump said, “…they used to call it NAFTA.  We’re going to call it the United States-Mexico Trade Agreement, and we’ll get rid of the name NAFTA.  It has a bad connotation because the United States was hurt very badly by NAFTA for many years.  And now it’s a really good deal for both countries, and we look very much forward to it.”

Defying the critics who said that Trump was alienating Mexico, President Peña Nieto said through an interpreter, “And I’m really grateful, Mr. President.  I want to say that you — I greatly recognize and acknowledge your political will and your participation in this.”

President Peña Nieto also noted, “I think this is something very positive for the United States and Mexico.  And the first reason for this call, Mr. President, is, first of all, to celebrate the understanding we have had between both negotiating peace on NAFTA, in the interest we have had for quite a few months now to renew it, to modernize it, to update it, and to generate a framework that will boost and potentiate productivity in North America.”

Trump continued the lovefest with the President of Mexico by remarking, “Well, Mr. President, thank you very much.  It’s an honor.  You’ve been my friend.  It’s been a long time since I traveled to Mexico, where we got to know each other quite well and we actually had a good meeting.  Some people weren’t sure if it was a good meeting, but it was.

I have a lot of good meetings that a lot of people aren’t sure if they were good or not.

But it’s been a long time, and this is something that’s very special for our manufacturers and for our farmers from both countries, for all of the people that work for jobs.  It’s also great trade and it makes it a much more fair bill.  And we are very, very excited about it.”

In a major win for American workers, the preliminary agreement includes new “rules of origin” requirements to incentivize billions a year in vehicle and automobile parts production in the United States, supporting high-wage jobs.

NAFTA has contributed to the ballooning annual goods trade deficit with Mexico, which grew from $115 billion in 1993, the year before NAFTA’s implementation, to nearly $800 billion in 2017.

The United States went from a $1.6 billion goods trade surplus with Mexico to a $70 billion goods trade deficit during that same time period.

According to an analysis of Labor Department data by Public Citizen's Global Trade Watch 928,378 jobs were lost to NAFTA, most of the jobs moved to Mexico, the analysis shows.

About 50,000 primarily blue-collar workers in Ohio have lost jobs to NAFTA from 1994, when the free trade zone between the United States, Canada and Mexico was created, through 2016.

Pennsylvania has lost more than 308,000 manufacturing jobs – more than one out of three – since the 1994 NAFTA and the World Trade Organization agreements took effect.

Michigan lost 199,828 manufacturing jobs (or 24.4 percent) during the NAFTA-WTO period (1994-present), according to an analysis of Bureau of Labor Statistics data by Public Citizen. This figure is for total manufacturing employment, so it takes into account both jobs created by exports and jobs displaced by imports, among other causes of net job change. The percentage of all private sector jobs that are manufacturing jobs in Michigan declined from 24 percent to 16.5 percent during the NAFTA-WTO period.

Wisconsin lost 62,134 manufacturing jobs (or 11.7 percent) during the NAFTA-WTO period (1994-present), according to the same analysis.

During the 2016 campaign then candidate Donald Trump tapped into frustration about NAFTA job losses in Ohio, Pennsylvania, Michigan and Wisconsin and other manufacturing states, saying he would renegotiate the trade deal to favor blue-collar workers - or even abolish it. Nothing explains Hillary Clinton’s 2016 loss better than Monday’s announcement that Trump has kept his word to those blue-collar voters by officially dissolving NAFTA.

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No more NAFTA

Seeing how destructive it was, I can only wonder why some bonehead entered into it. It was great for other countries, but horrible for the one they should care about.