logo logo

On NAFTA, Trump’s caution falls short of his tough talk — and that’s fine with free traders

Dallas News | 5 April 2017

On NAFTA, Trump’s caution falls short of his tough talk — and that’s fine with free traders

by Todd J. Gillman

On the campaign trail, Donald Trump promised to slash and burn U.S. trade policy. He called NAFTA a disaster and vowed to scrap it and start over. But in nine weeks as president, he’s taken a much more cautious approach toward the deal with Mexico and Canada.

That suits backers of free trade just fine — among them Texas’ Kevin Brady, chairman of the powerful House Ways and Means Committee.

"Right now I’m not worried. The president isn’t scrapping NAFTA. He made a very deliberate decision to begin the process of negotiations in modernizing that trade agreement," said Brady, R-The Woodlands, whose panel oversees trade policy. "While the rhetoric is very strong, the actions have been at this stage very deliberate."

On Friday, Trump signed a pair of executive orders on trade that fell far short of promises to overhaul U.S. trade policy — though of course he could still do so. And he has already pulled the United States out of the Trans Pacific Partnership, a deal that Brady and other free-trade advocates had worked on for years.

One of Friday’s orders requires a 90-day review of the causes behind trade deficits. The other calls for enforcing anti-dumping rules, to protect U.S. businesses from unfair pricing by overseas competitors. President Barack Obama had issued a similar directive.

One liberal critic called the orders "nothingburgers" compared with the sweeping changes Trump had promised, and a sign the president is wimping out on trade. But Trump, sticking with tough talk, indicated there’s more to come.

"Nobody has ever made bad trade deals like our country has made. I saw the shuttered factories and spent time with the laid-off factory workers," he said at the signing ceremony, recalling his campaign travels.

"Thousands of factories have been stolen from our country. But these voiceless Americans now have a voice in the White House. Under my administration the theft of American prosperity will end. We are going to defend our industry and create a level playing field for the American worker—finally," he said, insisting that the two orders "send this message loud and clear and that set the stage for a great revival of American manufacturing."

The actions were seen in part as a warning to China, whose president Trump meets with this weekend.

Brady, speaking Tuesday morning in a conference room just off the House floor, argued that trade deals create U.S. jobs and open foreign markets — achieving a goal Trump often cites, to equalize the flow of trade between the U.S. and its partners.

Texas relies heavily on trade with Mexico, but a trade war could inflict pain far inland. Mexico has indicated it’s ready to play hardball on corn, for instance— the top U.S.
agricultural export to Mexico — by seeking sources in Brazil and elsewhere. There’s even talk of a temporary ban on U.S. corn. Producers and politicians in the Midwest are concerned.

Brady shrugged off the possibility of any impending retaliatory measures.

"These are trade negotiations," said Brady, who noted that he’s been involved in negotiating a dozen U.S. trade deals since his election in a suburban Houston district in 1996. "It’s not uncommon for countries to make public their strength heading into negotiations and discussions."

But he said, he hears regularly from farmers, ranchers and businesses that want more access to Mexico and Canada, not less. "NAFTA has played a critical role in that, an invaluable role," he said.

Last week, Sen. John Cornyn of Texas, the party’s No. 2 Senate leader, joined with GOP Sen. Marco Rubio of Florida and Maryland Sen. Ben Cardin, a Democrat, to spotlight the importance of relations with Mexico. They proposed a resolution highlighting the economic ties and cooperation in the fight against smuggling of drugs and people.

"Since the creation of NAFTA, our agricultural exports to Canada and Mexico have almost quadrupled," Cornyn said. "As the top exporting state in the country, Texas has particularly benefited from our strong economic relationship, and we need to do everything we can to nurture it and build on it."

To renegotiate NAFTA, the White House must give Congress 90 days’ notice in writing. Trump hasn’t submitted a formal letter yet, but a draft circulated in Congress last week. It put a high priority on modernizing — for instance, to address digital trade, and the burgeoning service sector.

The measured language left NAFTA defenders relieved and hopeful that Trump will emphasize evolutionary improvement rather than major disruption.

"It shows that President Trump has backed away from this very harsh rhetoric...What this letter says is that he is ready to negotiate with the Mexican government and the Canadian government," Rep. Henry Cuellar, a pro-NAFTA Democrat from Laredo, told KUT.

Trump made only passing mention of trade policy in his Feb. 28 speech to Congress, calling for fair trade but offering no hint of how he would actually promote that goal. Nor did he mention renegotiating NAFTA.

These were glaring omissions, in the view of Public Citizen’s Global Trade Watch, a group that is critical of NAFTA. Director Lori Wallach blamed the muted stance on the fact that Trump’s Cabinet is "packed with former Wall Street and other corporate elites" — advocates of trade deals of the sort that Trump told voters he despises.

 source: Dallas News