During a rally in Arizona on Tuesday, President Trump said the North American Free Trade Agreement (NAFTA) will “probably” be terminated at some point. This comment comes after one week of renegotiation talks between trade representatives for the United States, Canada and Mexico.
“Personally, I don’t think we can make a deal because we have been so badly taken advantage of,” Trump said during the rally.
Established in 1994, NAFTA is a free trade deal between the United States, Mexico and Canada. NAFTA came with two ultimate goals for the United States: to expand North American trade and to make these countries more competitive in the global marketplace. The United States economy has fared relatively well from the agreement, as it has boosted trade. Regarding agriculture, many U.S. industries have seen success from NAFTA. However, some have not, such as the specialty crop industry.
NAFTA has put the United States in direct competition with Mexico, and unfortunately the United States cannot compete with Mexico’s cheap imports. Several U.S. farmers, including many in the Southeast, have had to sell their land or seek out alternative crops to keep their businesses afloat.
Trump noticed these faults of NAFTA early on during his campaign trail, and he vowed to abolish the trade agreement. However, after he was elected, he changed his tune to renegotiation rather than termination. Now that renegotiation talks have begun, his mind is beginning to change again.
“I personally don’t think we can make a deal without termination, but we’ll see what happens,” Trump said at the Arizona rally.
This leaves the U.S. agriculture industry in a cloud of uncertainty given that NAFTA affects ag in several different ways. Therefore, termination may not be the best outcome for many U.S. businesses.
There is no telling what will end up being the right decision for all industries in the three countries. Before renegotiations began, U.S. trade representative Robert Lighthizer, who is representing the U.S. in the renegotiation meetings, said the Trump administration realizes that not all industries have seen success under NAFTA. His goal has been to bring major change to the face of NAFTA in order for U.S. industries to see more success moving forward. Now that Trump has expressed different opinions on the agreement, Lighthizer’s goal may change.
The first round of renegotiation meetings has ended. Representatives will reconvene in Mexico in the coming weeks and then again in Canada.
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