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Mexico, Canada Still Have
Hope For NAFTA, Future

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Canada, Mexico and the United States created NAFTA in 1994. By Alex Covarrubias, and used under the terms of a Creative Commons license.
Canada And Mexico Push To Save The North American Free Trade Agreement In The Face Of Rhetoric From President Trump That He Wants To Scrap The Deal


By Karen Weil
Modern Times Magazine

Oct. 25, 2017 — Donald Trump’s combative rhetoric aside, Canada and Mexico are determined to keep NAFTA negotiations going until it’s a win for all three trading partners, panelists at a recent San Diego forum said.

Before being elected president, Trump vowed that he would pull the United States out of the 23-year-old North American Free Trade Agreement — unless all three nations rework it — because in his mind, it’s a shoddy deal for American workers.

Activated on Jan. 1, 1994, the agreement eliminated barriers, such as tariffs, to trade and investment for Canada, Mexico and the United States.

Many economists say while some U.S. manufacturing sectors have suffered, the deal overall has benefitted all three economies.

Official negotiations over NAFTA’s future are under way.

U.S. representatives recently shelved demands that a new trade deal favor American manufacturing and expire after five years if all parties do not renew it.

Those involved in the talks called such a demand a “non-starter,” while the U.S. Chamber of Commerce went further, describing it as a “poison pill,” according to an NBC report.  
Jeffrey Davidow, former U.S. Ambassador to Mexico, said at Thursday’s forum this period is troubling, given that NAFTA has brought about “a very profound, historical change” in U.S.-Mexico relations since the early 1990s.

Not only have tensions between the two nations dissipated, but NAFTA also resulted in a growing middle class and legitimate democratic reforms – one that also serves American interests, Davidow said.

Davidow said while there are good arguments against NAFTA regarding border security and U.S. job loss, “but those should be based on analysis.

“Now, so much of what’s controlling debate is based on prejudice, bigotry, ignorance and racism,” he said. “I think we’re at a critical point with NAFTA.”

View from Canada
Gavin Nardocchio-Jones, a Canadian career diplomat, said the ties between his country and the U.S. are seen every day, from the $2 billion worth of daily trade to cultural impacts.

He cited the Tony award-winning musical Come From Away, which focuses around the real-life account airplanes landing in Gander, Newfoundland, right after the Sept. 11, 2001 terrorist attacks.

Public utility Hydro-Quebec sent crews to help Florida and Georgia after Hurricane Irma struck last month, Nardocchio-Jones said, and “we shouldn’t take that for granted.”

Further, he said, 9 million American jobs depend on trade with Canada, the largest export market for the majority of U.S. states. Numerous products are shipped tariff-free between the two nations, but eroding NAFTA would mess up supply chains.

One example is that a car being manufactured in North America can cross borders up to eight times before being sold, but if that supply chain ends, car prices will rise, said Nardocchio-Jones, a consul for the Canadian embassy in Los Angeles.

“We can’t have a ‘win-win-win’ agreement if the U.S. attitude is ‘winner take all,’” he added.
Instead, there’s a real opportunity to modernize and innovate NAFTA, Nardocchio-Jones said.

‘Mature people in the room’
According to Mexican panelist Rafael Fernández de Castro, it’s hard to tell at this point where negotiations stand, and praised his nation and Canada “for being the mature people in the room” on the process.

Fernández said NAFTA has generated non-economic benefits.

Since the 1990s, there has been less negligence towards his country by the U.S. and a greater appreciation by Mexican citizens of their neighbor to the north, said Fernández, professor at the University of California San Diego and director of its Center of U.S.-Mexican Studies.

Further, a liberalized economic policy also hastened one political party dominance, when Vicente Fox of the conservative National Action Party won the presidency in 2000 — causing Mexico’s political elite to pay attention for the first time in decades, Fernández said.

Political Profundity: Taxes, Niger, Nunes, Puerto Rico and NAFTA
Conversation includes tax reform, Niger military deaths, Devin Nunes' personal war, Puerto Rico's sweetheart power deal and NAFTA. — Oct. 25, 2017

Harsh anti-NAFTA rhetoric has damaged Mexico’s economy, even devaluing the peso, Fernández said.

While former President Barack Obama wasn’t the greatest NAFTA fan during his early political career, he later understood its importance, Fernández said.

He added that Trump, meanwhile, “literally made Mexico his political piñata … we are one tweet away from a binational crisis.”

Despite that, Fernández said he’s not that pessimistic about NAFTA’s future.

Mexican negotiators want to resolve differences before their nation hold major elections next year, including for a new president, Fernández added.

Energy has no borders
NAFTA’s impacts on energy have also been a major success story, said Dennis Arriola, executive vice president of Sempra Energy, a San Diego-based public utility.

Power provided by Mexico helped soften the blow caused by the California energy crisis in 2001, Arriola said.

Last year, the U.S. exported $20 billion worth of energy, he said, adding that Sempra is building more natural gas pipelines to Mexico and has $7 billion worth of investments there.

“Having long-term certainty is important,” Arriola said, adding that when it comes to NAFTA’s future, it’s important to get beyond political rhetoric.”

Arriola has testified before the U.S. House Ways & Means Committee about how important modernized trade is to his industry.

“If we don’t speak up as to why it’s important to us, Congress isn’t going to act,” he added.

Arriola said that while politics will always play a role, he believes NAFTA will be modernized. “You can’t put the genie back in the bottle,” he said.
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