Scrapping or renegotiating major free trade deals was a cornerstone of Donald Trump’s populist presidential campaign. Trump appears to be following through with his pledge to turn U.S. trade policy on its head. On Thursday, President Trump initiated the formal renegotiation process for the decades-old North American Free Trade Agreement (NAFTA).
By sending a letter signed by U.S. Trade Representative Robert Lighthizer, Trump has triggered a 90-day mandatory grace period before the U.S. can begin negotiating with NAFTA partners Canada and Mexico.
Trump has 60 days (30 days before the start of formal negotiations) to notify Congress about the specific goals of renegotiating the trade agreement. No specifics were provided in the initial letter drafted to Congress Thursday.
“But the lack of specifics is notable, because the White House sent a more detailed eight-page draft notice to Capitol Hill in late March that included what the administration was looking for in nearly 20 different areas,” notes Politico.
Trump’s views on trade may be the one constant in an administration defined by “flexibility” and flip-flopping.
Appealing to blue-collar workers in the Midwest, Rust Belt, and other regions that have experienced major setbacks since globalization and rapid technological advancement rendered many jobs in the manufacturing sector outdated and unprofitable, Trump has called for a complete overhaul of U.S. trade policy in an effort to promote “fair trade.”
What Trump and his fellow protectionists fail to recognize and perhaps even come to terms with is the fact that technology, not immigration or trade, is largely responsible for wiping out large sections of the manufacturing sector. As liberal activists fighting for mandatory $15 minimum wage have begun to slowly realize, businesses (in this case businesses in the food services industry) are eager to promote automation over human labor as replacing one with the other is cost-effective.
At the end of the day, renegotiating free trade deals may do more harm than good. Consumers (especially lower-income consumers) that have grown accustomed to purchasing cheap exports will suffer the most, while American jobs that have been long buried by the proliferation of automated technology may realistically never return.
The move to begin the process of renegotiation comes after Trump threatened to pull out of NAFTA completely. According to the president himself, he backed down from the threat after the heads of state from both Canada and Mexico made frantic phone calls to the White House pleading for another solution. These claims have yet to be supported by independent reports.