On the same day the Republican bid to overturn Obamacare began to fade into oblivion, the Trump administration embarked on a bigger quest: resetting a global trade consensus that has persevered for over four decades. US Trade Representative Robert Lighthizer released a set of negotiating objectives for the North American Free Trade Agreement, or NAFTA. Under fast-track rules adopted in 2015, the administration must present these non-binding objectives to Congress before it can enter into negotiations, and the talks with Mexico and Canada to refashion NAFTA will preview how the White House wants to handle trade around the world.
This was one of Trump’s major campaign promises, to write better rules for trade. And it’s a promise lots of Democrats might support. “People I represent were glad to hear that President Trump would renegotiate NAFTA,” said Representative Debbie Dingell (D-MI) on a conference call previewing yesterday’s NAFTA release. “He’s got to deliver on those promises he made to my constituents.”
At first glance, it’s a very mixed bag. The negotiating objectives for NAFTA are mostly vague, and in parts revisit the well-worn tactic of using trade rules to guarantee corporate profits. In fact, several provisions are ripped directly from the Trans-Pacific Partnership, the corporate-friendly deal Trump loudly rejected in January. “This document does not describe the promised transformation of NAFTA to prioritize working people,” said Public Citizen trade expert Lori Wallach in a statement. It looks like another case of Trump’s rhetoric’s being submerged in the swamp.
There are a few advances in the document, but even those suffer from lack of specifics. The administration wants to add assurances that NAFTA countries “avoid manipulating exchange rates” to make their goods cheaper and gain unfair advantage. While Canada and Mexico are not seen as currency manipulators, this inclusion of a currency chapter in NAFTA would be a first for a trade deal, setting a standard for future talks with potential currency cheaters like South Korea. However, enforcement would come only through “an appropriate mechanism,” with no explanation of what that mechanism would be. We already have a mechanism to fight currency manipulation: sanctions through the Treasury Department. Unless currency chapters are enforceable in trade agreements with tariffs or monetary awards they don’t advance anything.
The White House wants to put labor and environmental standards within NAFTA rather than in a side agreement, and it subjects violations to the same dispute-resolution process as violations of trade and investment standards. But while labor and environmental groups would have more ability to raise concerns, ultimately it would still be up to a government to dispute labor violations from another party to the agreement. The administration only promises “increased monitoring” to combat illegal activities.