On Trade, a Politically Feisty Trump Risks Economic Damage

Not that Nafta is sacred. Economists and advocates across the ideological spectrum have long criticized the landmark agreement with Canada and Mexico as being in need of updating.

Nafta was negotiated in the elder George Bush’s administration and signed into law by President Bill Clinton in 1993 — before the web was a commercial force. It lacks rules for e-commerce. It is weak on labor and environmental protections, relegating them to unenforceable side agreements. It gives multinational companies rights to sue for compensation when local regulations damage their profits, tripping concerns about national sovereignty.

An earnest renegotiation would afford an opportunity to address gaps.

The Obama administration renegotiated some terms of trade with Mexico and Canada as part of a regional pact, the Trans-Pacific Partnership. That deal enhanced the ability to enforce labor and environmental standards while adding rules for the digital age, though it maintained mechanisms allowing multinationals to sue.

Mr. Trump revoked American participation within days of taking office.

Whatever the merits, Mr. Trump has accelerated a fundamental reordering of global trade policy. Big trade deals involving multiple countries — long championed by reigning elites as a key to expanding prosperity — have become political liabilities shunned as toxic to the public interest.

Britain’s vote to abandon the European Union — a step that Mr. Trump has praised — will remove the world’s fifth-largest economy from Europe’s vast single marketplace, which allows companies to sell products from Ireland to Greece free of duties.

Photo

An unfinished Ford car factory in Villa de Reyes, Mexico, that the automaker canceled in January.

Credit
Pedro Pardo/Agence France-Presse — Getty Images

Even before Mr. Trump…

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