Trump’s NAFTA ‘tweaks’ could open Pandora’s box; 3 export experts weigh-in
Invited to analyze Trump’s "tweak" promise, a trio of trade experts agreed: that’s not a promise the president can make and if Congress is involved things will get complicated
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WASHINGTON—U.S. President Donald Trump gave reassuring words to Canada this week when he lauded an outstanding trading relationship and suggested that changes to the North American Free Trade Agreement would involve just minor “tweaking.”
Invited by The Canadian Press to analyze the president’s promise, a trio of trade experts agreed: that’s not a promise the president can make.
Presidents don’t singlehandedly control U.S. trade negotiations, they say—the process involves numerous actors, all of whom will push their own priorities.
The end result is a Pandora’s box: Either Trump keeps it closed, tinkering superficially with NAFTA through regulatory changes, or he opens it—and all sorts of issues start spilling out.
Here are their views on why Trump’s tweaks could prove to be empty talk:
Gary Hufbauer, former U.S. deputy assistant secretary for international trade; author; senior fellow at the Peterson Institute for International Economics
“It would be very unusual to do the tweaking without close consultation, foremost with the Congress, and secondly with the U.S. business community. That does open up the process. The notion that the administration might come in with just a few of its own (ideas), whatever they cook up with the Commerce Department, and the (White House’s) United States Trade Representative, without these consultations, really flies in the face of reality. Some of my colleagues have told me Congress is quite restive over being a full participant in anything to do with trade…. Some people will want more things. There will be a big demand on dairy—that’s for sure. I don’t know if Canada would consider that a tweak. Probably on the IP file. Probably the administration will go for a very restrictive position on softwood lumber. Some of that amounts to a little more than tweaking. In addition to all those items, there’ll be other stuff coming out of the woodwork. I guess the word ‘tweaking’ implies both ‘small,’ and ‘it’s not going to take long, it’s going to be very quick.’ I think both those things are a misjudgment of the likely terrain.”
Peter Clark, trade strategist involved in Canada-U.S. Free Trade and NAFTA negotiations
”He really doesn’t have a clue. Trade is all about detail—and (Trump) doesn’t strike me as being a details person…. He’s addressed it in a broad-brush approach, (like), ‘We want to make it easier to export.’ He also wants to make it more difficult to import. So I’m not sure the tweaking is necessarily going to help us. I don’t see the tweaking helping our dairy farmers and poultry farmers. I don’t see the tweaking helping our grape and wine industries. These are standard targets—they’re always after anything we happen to do differently, which has to, of course, be unfair, depriving Americans of their God-given right to dominate our market. He hasn’t got anybody at USTR (yet)—he hasn’t got Bob Lighthizer there, and Bob hasn’t nominated his four deputies that also have to be confirmed. Without those guys you can’t really do much…. Their normal practice is to ask stakeholders to indicate what they’d like them to do. There will be a lot of things on that list…. You can never count out Congress…. (Trump) can’t control what stakeholders want. Congress controls what stakeholders want (in the deal) because…. they always seem to be in election mode… You get hit by surprises. (New issues) get traction. I can’t anticipate what the problems are going to be, but there’s going to be problems…. That’s a Pandora’s box—once you open it, everything’s open. How can you say, ‘We want to reopen NAFTA for you, you and you—and all you other guys, go play in the traffic?’ You can’t do that.”
Mark Warner, Toronto trade lawyer who has worked in several countries with clients including the Ontario government
“It all depends on what he means by ‘tweak,’ and I think the initial Canadian reaction on Monday was a bit too exuberant. I think it was just a placeholder. Canada wants answers faster than he can give—both (Wilbur) Ross and (Gary) Lighthizer have confirmation issues now—so when we push we will either get bumf like ‘tweak,’ or ‘You will be treated the same as Mexico’… It is not clear to me how you tweak for Canada but make substantive changes for Mexico…. Is that intended to bait Mexico into withdrawing, leaving Canada and the U.S. to tweak by themselves? (Or) give grounds to (Trump) to terminate NAFTA and renegotiate (the older Canada-U.S. Free Trade Agreement) separately by just updating to NAFTA and TPP perhaps?… If tweak means structural changes… then that probably means (Trump) has to go through (the fast-track procedure)… (That) means notifying Congress, consulting with Congress and an up and down vote for Congress, and I think that means opening Pandora’s box.”