The star of ‘Presidential Apprentice’ is desperate to score a win this week before Saturday’s “100 days” benchmark. But Donald Trump couldn’t even maintain his resolve to exit the North American Free Trade Agreement (NAFTA) for a full 24 hours.
Yesterday morning saw headlines that Trump was considering an executive order to begin the process of leaving NAFTA, a campaign promise that was quite popular with his Midwestern voters. But late last night, under pressure from Congress and businesses, White House officials issued a statement saying that the administration had decided to drop the idea.
In phone calls with the leaders of Mexico and Canada, “President Trump agreed not to terminate NAFTA at this time,” the statement read. But he will still seek to renegotiate the agreement “to the benefit of all three countries,” thus keeping the door open to changes. From the Wall Street Journal:
“Withdrawing from Nafta would have disastrous consequences for U.S. businesses and workers, benefiting our competitors in Europe and Asia, including China,” said Joshua Bolten, chairman of the Business Roundtable, which represents some of the biggest U.S. firms.
The agriculture industry, one of the biggest beneficiaries of Nafta, also pulled out the stops to block the move. “There are some things that sound good politically but are potentially dangerous in the real world,” said Kent Bacus, an official with the National Cattlemen’s Beef Association, whose members rely heavily on exports across both borders. “For the U.S. beef industry, withdrawing from Nafta is one of the most dangerous moves we can make at this time.”
Republican supporters of free trade led the calls for Trump to reconsider. Via CNN:
“Scrapping NAFTA would be a disastrously bad idea. It would hurt American families at the checkout, and it would cripple American producers in the field and the office,” said Sen. Ben Sasse, a Nebraska Republican, in a statement. “Yes, there are places where our agreements could be modernized but here’s the bottom line: trade lowers prices for American consumers and it expands markets for American goods. Risking trade wars is reckless, not wise.”
— John McCain (@SenJohnMcCain) April 26, 2017
Persistent myths about the trade agreement have dogged it since ratification in 1993. While popular opinion blames NAFTA for hollowing out American manufacturing employment, the best studies have found it is only responsible for between one and five percent of factory jobs lost in the last 24 years.
Automation and cheap Chinese labor account for far more of the decline, a trend which has been underway far longer than NAFTA. Economist Brad DeLong explains:
Before NAFTA was signed, we were already five-sevenths of the way from July 1953 to our present state in terms of “losing” manufacturing jobs. We were three-fifths of the way from January 1971 to our present state. Even the best policies favorable to nurturing a country’s manufacturing sector would not have prevented this process of the shedding of relatively inefficient manufacturing jobs. The trend preceded NAFTA, and it would have continued with or without NAFTA.
In fact, leaving NAFTA would make American goods more expensive, increase business costs, and possibly start a trade war — all of which would have negative effects on the US job market, potentially even sparking an economic recession.
But Trump’s anti-free trade rhetoric is not really about policy. During the campaign, he was just winning votes by pandering to popular, if wrong, ideas about the impact of free trade agreements on the American worker. This week, his short-lived bluster over a NAFTA exit is really about puffing up his flagging approval ratings.
Furthermore, all this surrendering in recent days — on Obamacare, a government shutdown, war with North Korea, and now NAFTA — makes him look like a weak leader and a terrible negotiator. Sad!
After Trump handled NAFTA negotiations so nimbly today, I’m sure Trudeau and Pena Nieto take him much more seriously now.
— Amy Siskind (@Amy_Siskind) April 27, 2017
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