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CGAI Vice President and Fellow
The outcome of the upcoming Montreal round (Jan. 23-28, 2018) of the NAFTA negotiations will give us a sense of whether a new agreement is possible – one that includes dispute settlement on trade disputes, as well as accommodations on government procurement and content rules for autos – or whether we need to look to Plan B – life without NAFTA.
Renegotiating the 1994 NAFTA is part of a bigger exercise by the Trump administration aimed at reducing U.S. trade deficits, bringing jobs back to the U.S., and getting a “fairer” deal for Americans in their trade agreements. The Trump administration has ramped up trade remedy actions against foreign competition, as Canada is experiencing on Bombardier’s C-series jet sales and, most recently, newsprint exports to the U.S. The Trump administration’s National Security Strategy (December 2017) says that “America will no longer tolerate chronic trade abuses and will pursue free, fair, and reciprocal economic relationships.” These are themes that President Trump is expected to address during his visit to the upcoming World Economic Forum in Davos.
On NAFTA, President Trump has been consistent. As he told the Wall Street Journal earlier this month, NAFTA “has been a terrible agreement for us…the United States has been treated very, very badly…we lose $71 billion in trade deficits with Mexico. We lose $17 billion with Canada. If we don’t make a fair deal for the United States and the United States taxpayer, then I will terminate it.”