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NAFTA, No Disaster

Beyond Trump’s threats against unfair Mexico in trade, most of his appointed secretaries have shown sympathy to Mexico and see NAFTA under a clear magnifying glass that it is not “disastrous”
By The News · 13 of July 2017 09:32:49
Robert Lighthizer, right, U.S. Department of Agriculture (USDA) Secretary Sonny Perdue meets with U.S. Trade Representative Robert E. Lighthizer at the USDA headquarters in Washington, D.C., May 23, 2017. USDA photo by Preston Keres, photo: Wikimedia

The clock is ticking. The timing to restart North American Free Trade Agreement (NAFTA) renegotiations keeps moving ahead and nowadays both Canada and Mexico are waiting to see what happens next week when U.S. Trade Representative Robert Lighthizer sends his second letter of intent to Congress this time outlining the specifics and US objectives in renegotiations.

In their last meeting in Hamburg Canada Prime Minister and Mexican President Pierre Trudeau and Enrique Peña Nieto showed a guarded cautiousness as to what will come out from Lighthizer’s move in order to make their own proposals.

Surely it can be foreseen new issues on the renegotiations agenda – because they were not in the original NAFTA – will be electronic commerce, telecommunications and energy.

Of particular interest are energy and labor negotiations. So much so that that U.S. Energy Secretary and former Texas governor Rick Perry will visit Mexico today July 13 to hold a meeting with President Peña Nieto and the nation’s Energy Secretary Pedro Joaquin Coldwell, according to an announcement made by the U.S. Embassy in Mexico. Definitely this time the energy issue is bound to be on the front line and on it will not be a renegotiation but a negotiation with a fresh start.

Definitely, Secretary Perry’s visit to presidential residence Los Pinos will be to give Peña Nieto’s Energy Reform now underway continuity and perhaps establish new exploration and exploitation guidelines particularly along the border’s Eagle Ford that covers a wide range of potential fields on both sides. Plus of course, the new oil sale of the United States to Mexico.

USTR Lighthizer’s second letter to Congress will also bring a potential questioning of the timing quagmire that would create President Donald Trump’s demand that there be a “total renegotiation” or finish it forever. But then, one thing is twitting about it and something else going into formal dealings that will definitely brand the trade among the three nations for many years to come, until the renegotiation, if approved by the three congresses, becomes obsolete again.

As we’ve commented before, both the Canada and the United States don’t have any particular hurry over the length of the duration but in Mexico President Peña Nieto is nervous because he wants the renegotiation to end this same year and avoid the perils that the upcoming June 2018 presidential elections in Mexico may bring about.

Definitely a defeat of the President’s Institutional Revolutionary Party (PRI) is contemplated in this rush to move NAFTA renegotiations forward ASAP.

Yet a scenario foreseen both by Canadian and Mexicans would be negotiators is that elections (including mid-term ones in the US on Nov. 2018) should have nothing to do with the advent of trade and the three nations must come up with a document acceptable to all.

Of course this is still all spec but Mexico has been paving the path for a smooth walk through all subjects. This past week Foreign Relations Secretary Luis Videgaray has been holding talks with congressmen in Washington and all responses have been that all of them, mostly Republicans, see the renegotiations with sympathy and feasible even if not easy given the complexity of some specific issues.

Of course, in all this is the demands President Trump may put in between which will have to prove why the now standing version of NAFTA was and is “disastrous” to the U.S. economic interests. As a campaign motto it might have voter appeal but in the end when NAFTA was originally negotiated under the administration of President George Bush, the Senate then approved even with some Democrat opposition but finally it is a fact that Bill Clinton – an opponent of NAFTA – accepted it because it was good for the United States and for Mexico, as President Carlos Salinas put it bluntly to Clinton in their first meeting in Houston, Texas before Clinton was sworn into office, NAFTA is all about bilateral –trilateral in this case – commerce and not receiving handouts from the United States. “We want trade, not aid” Salinas told Clinton.

Beyond Trump’s threats against unfair Mexico in trade, most of his appointed secretaries have shown sympathy to Mexico and see NAFTA under a clear magnifying glass that it is not as “disastrous” as The Donald claims and know that NAFTA definitely has been good to Mexico, but if it hadn’t, it would be very bad news for the United States.

Next week we’ll be talking about this issue again once Lighthizer releases his letter of intent to Congress.