Is NAFTA in jeopardy? Experts predict a 50/50 chance President Trump pulls out

By Alexandra Moffitt

This week, a fourth round of negotiations begin in Ottawa as the United States, Canada, and Mexico meet to renegotiate the North American Free Trade Agreement (NAFTA). NAFTA covers issues of customs, government procurement, and intellectual property rights, among others. Millions of Americans depend on NAFTA every day directly and indirectly. On October 5^th, the Atlantic Council released a report entitled “What if NAFTA ended? The Imperative of a Successful Renegotiations” and held an event on the topic. Following keynote remarks from Representative Will Hurd and the Honorable Bill Zoellick, the drafters of the Atlantic Council report and Mr. Zoellick held a roundtable discussion of the effects of NAFTA and the importance of maintaining the agreement. The atmosphere framing the discussion are President Trump’s anti-NAFTA remarks in recent months.

In his keynote, Congressman Will Hurd, a Member of the U.S. House of Representatives from Texas, said, “sometimes we forget to talk about things we take for granted.” He stressed that NAFTA created North American competitiveness in the world, and that a lot of Americans do not know that Mexican companies create jobs in the U.S. He underscored the importance of keeping NAFTA for the economic benefits.

Former U.S. Trade Representative Bill Zoellick indicated that there were serious risks and huge implications if NAFTA were lost. NAFTA is a continental base for the 21^st century, which connects three democracies and 500 million people. NAFTA allows the three countries to better compete in the global system. Zoellick said, “bilateral trade deficits are negative trade income” to President Trump, which Trump equates to losing.  Zoellick called this “economic nonsense.” NAFTA negotiators are trying to push other countries to open their markets, and remove exemptions, while removing obligations from the organization.    

After Mr. Zoellick’s remarks, the event transformed into a panel discussion of the NAFTA renegotiations with Phil Levi, Daniel Schwanen, and Javier Mancera serving as experts for the United States, Canada, and Mexico respectively. Each of the three drafted sections of “What if NAFTA ended? The Imperative of a Successful Renegotiations.” Phil Levi said there is a lot of uncertainty surrounding NAFTA. After President Trump’s Executive Order on NAFTA, businesses and agriculture came out against it. Mr. Levi cautioned that the most difficult issues in the NAFTA renegotiation have not been discussed yet.

Javier Mancera indicated that Mexico is looking to add new chapters rather than renegotiating previously decided ones. Because Chapters 11 and 19 of NAFTA each provide for a private right of action pursuant to violations, these chapters are immensely important to Mexico. Mr. Mancera mused that it was surprising that American Republicans would want to remove that clause. Daniel Schwanen stressed that Canadians have a consensus that trade helps the country. This feeling of goodwill towards international trade buoys Canada’s stance on NAFTA.

The most captivating moment of the discussion came at the end. Panelists were asked what percentage they gave that President would pull out of NAFTA. The panelists gave their percentages as 50%, 50%, 40%, and more than 50%. These percentages from experts in the field offer a chilling picture for the future of NAFTA. North America’s competitiveness in global trade are at a turning point. Will President Trump jeopardize North America’s status in the world?