Trump on NAFTA: Renegotiate or withdraw

Donald Trump said Tuesday he would ask Canada and Mexico to renegotiate the North American Free Trade Agreement (NAFTA), or inform them “that America intends to withdraw from the deal.”

In a trade speech titled “Declaring America’s Economic Independence,” the presumptive Republican presidential nominee said former President Bill Clinton and his wife, presumptive Democratic nominee Hillary Clinton, “pushed” NAFTA and the entrance of China into the World Trade Organization.

Trump’s speech comes ahead of President Barack Obama’s trip to Ottawa Wednesday to meet Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto at the North American Leaders Summit. The meeting between the leaders of the three NAFTA partners has taken place every year since 2005.

“NAFTA was the worst trade deal in history,” Trump said. 

“I’m going tell our NAFTA partners that I intend to immediately renegotiate the terms of that agreement to get a better deal for our workers. And I don’t mean just a little bit better, I mean a lot better.” 

“There are well over 10 million U.S. jobs that depend on trade with Canada and Mexico,” said Christopher Wilson, deputy director of the Mexico Institute at the Wilson Center, a non-partisan think tank. “Renegotiating NAFTA would be extremely difficult in the current political context, so my concern would be that a huge number of jobs throughout the country, and many more in Canada and Mexico, could be lost if NAFTA was simply ended.”

In 2015, the United States exported $280 billion worth of goods and services to Canada, and $235 billion to Mexico. The two NAFTA partners exported $296 billion each to the United States. 

NAFTA was signed in December, 1992 by President George H.W. Bush, Mexican President Carlos Salinas de Gortari and Canadian Prime Minister Brian Mulroney, after years of trilateral negotiations. 

President Clinton, who campaigned against the text of the agreement as signed by Bush, signed it into law in December 1993, with labor and environmental additions.

“It will provide more jobs from exports,” Clinton told the New York Times in October of 1992. “It will challenge us to become more competitive. It will certainly help Mexico to develop. But still, that is also in our interests. A wealthier Mexico will buy more American products. As incomes rise there that will reduce pressure for emigration across the border into the United States which depresses wages here.”

NAFTA entered into force in January, 1994. 

A Mexican financial meltdown in December of 1994, related to the end of Salinas’ term in office, triggered a worldwide economic crisis known as the “Tequila Effect.” 

The crisis delayed Mexican economic development and detonated a trend of mass migration to the United States that peaked in 2007 and has since reversed itself, according to the Pew Research Center

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