Ag Policy Blog

From DTN's Washington Insider

Before a Wednesday Cabinet meeting took place, President Donald Trump talked about past and future trade agreements, saying the U.S. is “negotiating right now. We have my full team here. Tremendously different trade deals. Our [prior] trade deals are horrible. They were made by people that, honestly, it’s sad. It’s very sad for our country. Every trade deal we have is disastrous. We’re renegotiating our trade deals. If we have support from Congress, we’ll make trade deals that are horror shows into very good and respectable trade deals and trade deals that are good for both countries and in fact many countries."

But he also cautioned that the NAFTA talks were key. “But very important is that we renegotiate our trade deals with Mexico... we have a trade deficit of $71 billion. That’s NAFTA. We have trade deficits with China that are through the roof," Trump stated. "They are so big and so bad that it’s embarrassing saying what the number is. You know what the number is. I don’t want to embarrass anybody four days before I land in China. It’s horrible. You look all over the world, no matter where we do trade, we have bad trade deals. We’re renegotiating those deals as I said I would during the campaign. That’s a big factor in our growth.”

The New York Times cites “trade diplomats” who say the U.S. has warned Mexicans and Canadians that if the United States leaves NAFTA, they shouldn’t expect trade relations to simply snap back to WTO rules, which include a tariff ceiling of 3.5%, on average, for Mexican exports to the United States and 7.1% for American exports to Mexico. The United States, they argue, won’t be bound by these constraints.

So, the Times is raising the question of how the administration conceives the endgame of NAFTA talks if it is willing to bring down a legal system the United States spent so much time and effort to build and that now has so many important stakeholders.

As almost everyone knows, access to NAFTA markets is extremely important to U.S. producers, so the administration’s attitude and posture during these talks are very important. The negotiations deserve especially close attention as they proceed, Washington Insider believes.

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