The Trade Deal We Just Threw Overboard

Politico on The Trade Deal We Just Threw Overboard. That would be TPP but it also involves NAFTA, the other deal Trump hates.

NAFTA may be the first test of whether Trump can recast America’s role in the world through sheer force of will. But renegotiating a deal that reshaped the commerce of a continent will be a lot harder than renegotiating an unfavorable lease. It will be an incredibly painstaking and frustrating task, an epic diplomatic and political challenge. It will require patience, sensitivity and attention to policy detail not usually associated with the Trump brand. And it might not work out in the end.

This isn’t just speculation. This is well-documented history. Because the Obama administration already renegotiated NAFTA.

There was never a formal announcement of ‘NAFTA Modernization Talks.’ There were no presidential tweets mocking the original agreement. But behind the scenes, President Barack Obama’s negotiators spent more than three years haggling and battling to update and upgrade the 1994 deal, and they eventually got a lot of what they wanted. Canada reluctantly agreed to give American farmers modest but unprecedented access to its tightly protected dairy industry; Mexico grudgingly agreed to labor reforms with more bite than NAFTA’s toothless union protections. The new deal opened up service sectors like insurance, accounting and express delivery where the United States tends to excel, along with e-commerce and other digital industries that didn’t exist when NAFTA was born. The United States also secured new restrictions on government-owned businesses, new protections for intellectual property and new safeguards for the environment.

But none of those hard-won concessions are going into effect. That’s because the Obama team negotiated all of them as part of the Trans-Pacific Partnership, the 5,500-page Asia-oriented trade agreement among the three NAFTA nations and nine other Pacific Rim countries. TPP was at the heart of Obama’s strategic ‘pivot to Asia.’ But Trump saw it as another fleecing of America, and with great fanfare he yanked the United States out of TPP during his first week in office, before Congress could even vote on whether the deal should take effect. That means its upgrades to NAFTA—regarding dairy, labor and everything else Mexico and Canada agreed to—are probably moot.

To Obama administration officials and other free-trade advocates, this feels like a gaping self-inflicted wound, a voluntary surrender of economic and geopolitical territory captured through countless hours of intense negotiations in drab conference rooms. When I asked Obama’s trade representative, Michael Froman, what his negotiating team had given up to Mexico and Canada in exchange for their TPP concessions to America, he replied: ‘Nothing!’ Mexico and Canada were willing to play ball because TPP would give them better access to sell their products in Asian markets—and when Trump tries to renegotiate NAFTA, he won’t be able to offer that carrot now that he’s ditched TPP."