Why NAFTA Needs An Expiration Date

[Green Arrow]

Via Politico (https://www.politico.com/agenda/story/2017/10/26/nafta-sunset-trade-clause-000565):


The Trump administration’s recent proposal to insert a sunset clause into the North American Free Trade Agreement shocked just about everyone in the trade world. Under the plan, the three countries would have to renew the agreement every five years—or else it would be terminated. Canadian and Mexican negotiators immediately rejected the idea, arguing that it would create uncertainty for businesses and potentially spell the end for NAFTA. “If every marriage had a five-year sunset clause,” Canada’s ambassador to the U.S said, “I think our divorce rate would be a heck of a lot higher."

These experts are right: Allowing NAFTA to expire every five years without affirmation by all three countries is a bad idea. But a sunset clause isn’t.

Today, most trade deals, like NAFTA, have no expiration dates at all—they lock countries into agreements indefinitely. At one level, this has some benefits: It ensures stability and gives businesses some long-term planning clarity. But, as is becoming clear, the world changes—in part because of those trade deals—and deals like NAFTA can let important injustices and political tensions build up over the years, with no pressure valve at all. A sunset clause can provide a regular chance to relieve that pressure.

If Trump follows through on his repeated promise to end NAFTA, I will commend him for it. NAFTA is outdated and, like the TPP, misguided.

[resister]

Clinton sold America to Globalism when he signed it. American jobs began to go offshore, in droves.

[Common]

Clinton was begged by his biggest supporters unions not to make the nafta trade deal that was a guaranteed exodus of American jobs, it was the beggining of the loss of american middle class jobs.

I believe trump is correct in renegotiating the deal and assuring we get a benefit every 5 yrs. I also agree with him stopping Obamas trade deal that labor was totally against.

I could care less if mexico and canada whines about it, to me they means that tend to lose and we tend to gain

[Kacper]

Five years is too short a window. The problem with NAFTA has always been that the promised follow up deals to protect vulnerable industries were never negotiated once the original one went into effect. The perpetual problem with politicians interjecting themselves in the economy this way is that they will do something to get the big headlines and won't do the grunt work to figure out down the road how to address all the problems they create.

[waltky]

Doubts Grow That Congress Will Get NAFTA Deal in Time For Approval This Year...
:huh:
Doubts Grow That Congress Will Get NAFTA Deal in Time For Approval This Year

August 15, 2018 – In spite of recent optimism expressed by President Trump and others, doubts persist that NAFTA negotiations will be completed before Mexico’s new president takes office in December and a new U.S. Congress is seated in January.


If an agreement isn’t reached before the end of this month, it appears likely Mexico’s current senate and president, as well as the U.S. Congress, would not have a chance to approve or reject a deal. The U.S. administration is required to give Congress 90 days’ notice about a new deal. The House is meant to be given 60 legislative days and the Senate 30 to approve any new agreement. Last week, Trump tweeted that Mexico and the U.S. were close to eliminating their differences in ongoing negotiations to renew the U.S.-Mexico-Canada North American Free Trade Agreement. “Deal with Mexico is coming along nicely,” the president said in the Friday tweet, which also called president-elect Andres Manuel Lopez Obrador “an absolute gentleman.”


The president’s optimism was echoed by Moises Kalach, an international negotiations advisor to the Mexico City business chamber, CCE. He told (https://www.bloomberg.com/news/articles/2018-08-14/good-chance-to-get-nafta-deal-this-month-mexico-business-envoy) Bloomberg News Tuesday that a deal between Mexico and the U.S. has a good chance of being wrapped up by the end of this month. If not, however, negotiators would be looking at a completely “new calendar” for a completion to the talks, Kalach warned. Mexico’s economic secretary Ildefonso Guajardo also noted that if the talks aren’t finalized by the end of this month, it would be the responsibility of the new administration of Lopez Obrador, who takes office in December, to sign off on any agreement.


Key unresolved issues include questions about the percentage of parts used in auto manufacturing that have to be made in North America, and a demand by the U.S. that any new agreement include a sunset clause, Guajardo said in an interview last month. The proposed sunset clause, which both Mexico and Canada oppose, would open the agreement to renegotiation every five years. “To be quite frank, I just don’t see how we get any NAFTA deal any time soon,” Monica de Bolle, a senior fellow at the Peterson Institute for International Economics, told CNSNews.com. The Trump administration had hoped to get a new NAFTA deal approved during the lame duck session of Congress after November’s mid-term elections. “That December timeline just doesn’t apply anymore,” de Bolle said.


Given the uncertainly of the outcome of the mid-term elections, political constraints on the signing of a new NAFTA deal now apply primarily to the U.S., since Lopez Obrador has signaled his support for reaching a new deal. The sunset clause proposal is “floating in ether and hasn’t progressed in any direction,” she said. A compromise suggested by Mexico that the wording be softened to require only a “review” – rather than a renegotiation – is unlikely to be approved by the U.S. side, de Bolle said. Meanwhile trade disputes with China and Turkey have taken the administration’s focus off NAFTA.


MORE (https://www.cnsnews.com/news/article/mark-browne/doubts-grow-congress-will-get-nafta-deal-time-approval-year)