The fourth round of negotiations of the North American Free Trade Agreement (NAFTA) resumes in Washington on Wednesday, amidst concerns that these talks may end in an impasse between the Trump administration and the governments of Mexico and Canada.
Two Cornell University experts comment on the status of the negotiations and what they mean for the countries involved and the global economy and are available for media interviews.
Harry de Gorter is professor of agriculture and trade policy at Cornell University. His recent work focuses on the impact of subsidies on developing countries and he has long been involved in advising governments and international organizations on issues related to trade policy.
de Gorter says:
“International production networks rather than the boundaries of nations now define industrial competitiveness. Therefore, it is difficult to tell who gains and who loses from globalization in the United States.
“This means that 21st century regional trade agreements – such as NAFTA – require ‘supply chain rules’ for trade that requires international co-ordination of production facilities via the continuous two-way flow of goods, people, ideas and investments. These rules impinge upon firms, services, capital, bi-lateral investment, regulations and intellectual property.
“This explains a good many of the objectives the United States Trade Representative listed for the renegotiation of NAFTA.
“Ironically, the World Trade Organization does not adequately deal with these issues and the Trans Pacific Partnership was to be the gold standard yet Trump pulled out of it while many of the same issues are now on the NAFTA renegotiation agenda.”
Gustavo Flores-Macias, professor of government at Cornell University and former director of public affairs in Mexico’s Consumer Protection Agency, says American demands are increasingly unacceptable to Mexico and Canada, which are both facing domestic elections next year.
“This week’s negotiations will focus on the most contentious issues so far. In addition to demanding more favorable terms in rules of origin and government procurement, the White House wants to eliminate NAFTA’s dispute-resolution mechanism and include a provision that expires the agreement automatically every few years unless countries agree to extend it.
“The U.S. position seems to be designed so that in the end no agreement is reached. Canada and Mexico consider these demands unacceptable, and their margin for maneuver is becoming increasingly narrow as next year’s elections approach in the three countries. If the three countries fail to reach an agreement, there would be serious consequences for the U.S. Greater trade barriers would result in:
– Increased migration from Mexico because of economic hardship south of the border
– Higher prices and fewer goods for Americans
– A major opportunity for China to expand its commercial influence
- The strengthening of anti-U.S. candidates in Mexico’s 2018 presidential election.”