There are two ways of renewing NAFTA. One way is through trilateral negotiation among the three North American treaty partners. The other is through bilateral talks — between the U.S. and Canada on the one hand, and between the U.S. and Mexico on the other.
That latter approach seems to be how the Trump administration wants to proceed — “tweaking” the NAFTA with Canada while conducting a major renegotiation with Mexico. Or, as Kenneth Frankel, president of the Canadian Council of the Americas, put it at the opening of a Toronto symposium Tuesday morning, Trump’s people see the negotiation as a “a hub and spoke effect, with the U.S. as the hub.”
We’ve seen this movie before. Back in 1990 the first George Bush began the NAFTA process as a bilateral with Mexico, leaving Canada outside the talks. The Americans’ reasoning, as articulated by the U.S. Trade Representative Carla Hills, was that they already’d negotiated the Canada-U.S. Free Trade Agreement in 1987 and the U.S. subsequently wanted a bilateral deal with Mexico. Hub and spoke.
“Knowing what President Bush had in mind for NAFTA,” Brian Mulroney recalled in a panel discussion moderated by Globe and Mail Editor David Walmsley at today’s Canadian Council of Americas conference, “it quickly became clear to us that this was going to happen.”
Mulroney had other ideas. He flew to Washington to have it out with his friend Bush at the White House.
“I said, ‘George, look, we have an FTA with you. This has to be a trilateral.’”
Bush, he said, replied that Hills thought a bilateral was the better way for the Americans to go.
“George, I don’t give a damn what Carla thinks,” Mulroney recalls responding. “I’m interested in your opinion.”
Which is how the NAFTA became a trilateral conversation in 1991. In effect, Canada crashed the party.
“George Bush deserves enormous credit for that,” Mulroney said, citing the fact that Canada and the U.S. became the first G7 nations to nail a free trade deal with a developing country, “modernizing the economy of Mexico.”
The trade facts speak eloquently for themselves in a 2015 NAFTA study by the U.S. Congressional Service. U.S. merchandise exports to Mexico increased from US$46 billion in 1993 to $240 billion in 2014, while U.S. imports from Mexico increased from $40 billion to $294 billion over the same period.
Sorry, President Trump — the facts do not support your claim that NAFTA has been “disastrous” for the U.S. Even in the automotive sector, Trump’s primary target, U.S. exports to Mexico increased by 250 per cent over that same period, while imports admittedly spiked by 680 per cent.
Read the whole story on IPolitics