Time is running out on a renegotiation of the North America Free Trade Agreement. House Speaker Paul Ryan says there’s little time left for Congress to receive a revamped agreement and meet all the timeline requirements under federal law. Meanwhile, Mexico holds its presidential election on July 1, and a leftist candidate unlikely to strike a quick NAFTA deal is expected to win.
Plus, the Trump administration recently undermined the NAFTA talks by slapping hefty tariffs on steel and aluminum exports from Canada and Mexico, spurring the two countries to impose retaliatory tariffs on selected U.S. goods.
Trump’s tariff decision “derails the spirit of the renegotiation of NAFTA,” Jorge Guajardo, a former Mexican ambassador to the United States, said last week. Canada and Mexico both made clear to the administration, he said, that they “would not negotiate with a gun pointed” to their heads.
Canadian Prime Minister Justin Trudeau called the U.S. tariff decision “totally unacceptable” and announced tariffs on a variety of U.S. goods.
Still, the NAFTA talks are continuing, with progress reportedly made on some of the stumbling blocks. Meanwhile, 32 U.S. senators, including the four senators in Nebraska and Iowa’s congressional delegations, offered sound advice in a recent letter to the administration, urging it not to disrupt our trade relations with Canada and Mexico by withdrawing from NAFTA or insisting on unreasonable demands.
“In our view, a take-it or leave-it strategy could have negative unintended effects that jeopardize American jobs and economic growth,” the lawmakers said in their May 21 letter to Robert Lighthizer, the U.S. trade representative. “When discussing NAFTA modernization legislation with Congress, we ask the administration to employ a strategy that emphasizes collaboration, rather than conflict.”
The letter urged the administration to “work closely with members of Congress from both parties to ensure that any agreement has the broad support necessary to be enacted into law.”
Those are all important points. Nebraska agricultural producers have been looking with concern about our trade to Mexico, for example, amid the trade uncertainties between our two countries. Some Mexican officials have demanded that their country increase its ag-related imports from South America. To boost its trade options, the Mexican government concluded a free trade agreement in April with the European Union.
To help maintain Nebraska’s trade ties, Gov. Pete Ricketts will lead a trade delegation to Mexico in August. Mexico is Nebraska’s largest export market for corn, wheat and dairy products, and the state’s second-largest export market for soybeans and soybean products, dry edible beans, sorghum and distillers grains. In 2016, Nebraska sold an estimated $956 million in agricultural products to Mexico.
Unfortunately, the president’s approach to trade is so impulsive, overly aggressive and unpredictable that it undercuts our economic relationships with Canada and Mexico. But that just shows that the senators are right in their central message: Don’t withdraw from NAFTA, and don’t insist on impossible demands. It’s advice the administration ought to heed, for the sake of our economy.