Is Trump Backing Down? Administration Will Now Only Seek Minor Adjustments to NAFTA

While Trump was ablaze on the campaign trail he stated that NAFTA is a disaster. However, now that the new administration has taken the Oval Office by storm, Trump only seeks to make minor changes to the trade deal.

Is Trump cracking? There is pressure from every side, and every mainstream news outlet; but until lately, Trump appeared not to be phased by the left-wing world order. However, we are just over half-way through the first 100 days of the new administration, and it would seem as though the battle has left its scars.

The following comes from The Wall Street Journal;

According to an administration draft proposal being circulated in Congress by the U.S. trade representative’s office, the U.S. would keep some of Nafta’s most controversial provisions, including an arbitration panel that lets investors in the three nations circumvent local courts to resolve civil claims. Critics of these panels say they impinge on national sovereignty.

The draft, reviewed by The Wall Street Journal, talks of seeking “to improve procedures to resolve disputes,” rather than eliminating the panels.

The U.S. also wouldn’t use the Nafta negotiations to deal with disputes over foreign currency policies or to hit numerical targets for bilateral trade deficits, as some trade hawks have been urging.

The White House is reportedly preparing two new executive actions, one of which could spark Trump’s trade agenda, and potentially lead to a trade war. The administration made the congressional letter that would start the 90-day countdown to the beginning of NAFTA renegotiations, according to two people familiar with the process.

The Wall Street Journal spoke with Jeffrey Schott, who is a trade scholar at the Peterson Institute for International Economics;

Jeffrey said the measure reimposing tariffs—called a “snapback” in trade language—was also sought by the Clinton administration 24 years ago when it negotiated side deals to Nafta.

According to the Wall Street Journal there are several echoes of the TPP throughout the potential renegotiations of NAFTA.

Mr. Schott noted that a number of the proposed negotiating objectives echo provisions in the Trans-Pacific Partnership, a 12-nation trade pact among Pacific Rim countries. Mr. Trump campaigned heavily against the TPP. The president pulled the U.S. from the deal on his first working day in office.

Among the TPP-style provisions the U.S. will seek, according to the draft, are protections of digital trade and commerce, tougher intellectual property enforcement and requirements that state-owned companies operate in a commercial fashion. The Obama administration had hoped to use TPP to set standards for state-owned firms in the Pacific as a way to influence Chinese behavior.


With the 90-day process having begun, only time will tell how all of this turns out.