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Tuesday, July 16, 2024 | Back issues
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NAFTA Threats Hurt Trade, Experts Tell Congress

Experts cautioned Congress not to back away from the North American Free Trade Agreement, despite President Donald Trump’s longstanding criticism of the deal.

WASHINGTON (CN) - Experts cautioned Congress not to back away from the North American Free Trade Agreement, despite President Donald Trump’s longstanding criticism of the deal.

"The uncertainty that has been caused by the negotiations has already had negative consequences," said Eric Farnsworth, vice president of the Council of the Americas. "Doubts will linger about whether the word of the United States, even one that is confirmed on a bipartisan basis by both houses of Congress, can be fully trusted again.”

NAFTA has been in place since 1994, eliminating tariffs and duties on goods traded between Mexico, Canada and the United States so that products move more freely between the countries. Critics say it and other free trade agreements have hurt American workers and lowered environmental standards.

Though negotiations between the three countries involved in the pact have been underway for most of the year, Trump amped up his rhetoric against NAFTA in August, threatening that the United States would "end up probably terminating" it.

The talks are said to be in Round 6 after a negotiation session in Mexico City last month.

As quoted in The New York Times after that session, U.S. Trade Representative Robert Lighthizer claimed there is "no evidence" that Canada and Mexico are reconsidering the portions of the trade deal that the United States has earmarked.

"Absent rebalancing, we will not reach a satisfactory result," Lighthizer reportedly said last month.

John Negroponte, a former ambassador to Mexico, spoke about the negotiations Tuesday in a meeting of the House Subcommittee on Terrorism, Nonproliferation and Trade. Now the vice chairman of McLarty Associates, Negroponte said the deal could survive tweaks to bring it into the Internet Age but that walking away would be a grave mistake.

"Do we need to modernize this agreement? Absolutely," Negroponte said. "The world has moved on since NAFTA's entry into force. Do we need to threaten withdrawal to do so? Absolutely not."

Negroponte said the Trump administration has done damage to the agreement by instilling uncertainty that can make businesses wary of dealing in NAFTA countries. He urged Congress to use its "institutional prerogatives" to support the agreement.

"Given the legal uncertainties that I understand cloud any withdrawal scenario, it is imperative in my view that Congress move swiftly to protect the agreement, stressing to the executive branch the opportunity costs involved in putting not only the agreement, but our trilateral relationships in peril," Negroponte told the committee in written testimony.

Though free-trade deals have earned scorn from portions of both parties, the lawmakers who attended Tuesday's hearing expressed concerns about the Trump administration's approach to the NAFTA negotiations.

"Unfortunately, on this issue, which will have a significant impact on each and every American's bottom line every month, I remain unconvinced that this president has approached this issue with the seriousness it demands," Rep. William Keating, D-Mass., said at the hearing.

Keating specifically found fault with the "unrealistic" timeline the Trump administration has placed on the negotiations.

The lone opponent of NAFTA who testified at the hearing was Celeste Drake, a trade-policy specialist for the AFL-CIO. Drake said NAFTA has not been a net benefit for the United States, and urged lawmakers to invest in infrastructure while negotiators aim for stricter environmental and labor regulations in a reworked deal.

"Congress should demand that NAFTA's negotiators think bigger," Drake said.

Categories / Business, Government, Politics

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