Andrés Rozental knows free trade like few others. He was a key participant in the original NAFTA negotiations in the early 1990’s, and as such played a role in establishing the sphere of co-prosperity that has existed across Canada, the U.S., and Mexico since then — a unified single value chain that increases competitiveness and has brought billions of dollars in benefits to all three nations.
This fact has, apparently, escaped Donald Trump, who finally initiated the first phase of a long-bruited campaign promise — to renegotiate NAFTA to make it “fairer” — in recent days. The first round of talks on the renegotiation closed without much happening. But Rozental, looking ahead to the next round of talks expected for September 2nd, sees trouble coming. This is largely due to the fact that the U.S. posture centers around our trade deficit. Protectionism won’t cure this, as most economists seem to realize. That does not seem likely to stop Trump, Rozental points out.
He also takes listeners on a tour of the ins and outs of NAFTA, specifically why the U.S. needs Mexico here more than the other way around, and gives a picture of the sentiment around free trade here and in Mexico — where Trump’s anti-trade contingent finds some surprising echoes on the ideological left. This is essential listening for anyone interested in the fate of free trade, which is intimately connected to the fate of open societies.
As Rozental points out, free trade agreements are not set in stone: they need to be updated as the world changes around them. But killing them off is another matter entirely. Trump’s abandonment of TPP has already had very bad soft power consequences for the U.S. One can only imagine what a stepping-out of NAFTA would do in terms of damaging both our international credibility and our national security.