Mary: This is Mary Walden with economist MW, welcoming you to the economic perspective. Today’s program looks at re-negotiating NAFTA. Mike the Trump Administration has indicated its intent to rework the NAFTA trade agreement. NAFTA, which stands for the North American Free Trade Agreement, is now 20 years old has been the subject of much controversy. Critics point to the large increase in the US trade deficit with Mexico after the deal, whereas supporters say the agreement has resulted in lower prices to US consumers for many products. How is the Administration seeking to change the trade treaty?
Mike: Summary Answer
- Can take two approaches
- Can focus on imports, so seek to limit imports to US from Mexico and Canada
- Or can focus on exports, so look to open up Mexico and Canada to more US exports
- While Administration’s rhetoric has following the first approach, their negotiations appear to be following the second approach
- Administration is talking about increasing access of US products for sale in the countries
- Also strong labor and environmental standards – directed at Mexico
- Most controversial – ban on currency manipulation – how define?
- so not as confrontational as many expected
- I’m MW
Mary: And I’m Mary Walden for N C State Extension