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  August 23rd, 2017 | Written by

NAFTA Under Trump: Will it Stay or Will it Go?

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  • Trump in Phoenix last night: “We'll end up probably terminating NAFTA at some point.”
  • Trump's position on NAFTA has made a lot of US business leaders nervous.
  • Scrapping NAFTA would jeopardize millions of jobs and billions in investments.

We all know that President Donald Trump campaigned against NAFTA in the lead-up to last November’s election, calling it “the worst trade deal ever.” Even after he took office in January, Trump warned the United States would leave the North American Free Trade Agreement if the deal wasn’t renegotiated favorably to the US.

That made a lot of US business leaders nervous, not only importers and exporters, but also chiefs of companies that provide crossborder transportation and logistics services. Higher tariffs and less-favorable trade conditions, whether through a renegotiated NAFTA or a scrapping of the treaty, would be bad for their businesses and jeopardize millions of jobs and billions in investments.

In May, 32 CEOs of large US corporations—including several providing transborder transportation—sent a letter to Trump asking him to be sensible about the changes he would negotiate in NAFTA.

A few weeks later, US Trade Representative Robert Lighthizer unveiled the Trump administration’s NAFTA priorities, and the CEOs surely breathed a sigh of relief. Deficit reduction (with Mexico) was included as a major objective for the NAFTA negotiations as was market access issues with Canada with respect to dairy, wine, and grain.

The negotiating objectives also included adding a digital economy chapter and incorporating and strengthening labor and environment obligations that are currently in NAFTA side agreements. Negotiations among the three countries began in mid-August, with a first round in Washington, and are scheduled to reconvene in Mexico after Labor Day.

But in a campaign-style rally in Phoenix last night, Trump said that “we’ll end up probably terminating NAFTA at some point.

“Probably,” the president added, for emphasis.

Which is it, Mr. President? Are you going to renegotiate NAFTA in good faith? Or are you wasting the time of negotiators on all sides? Do you really intend to negotiate a better NAFTA? Or have you already given up on those talks?

Do you intend to forge better trade deals for the US as you promised? Or are the current NAFTA negotiations window dressing for some sort of protectionist, isolationist, and nationalistic agenda?

US business leaders want to know. They need to know. Millions of jobs and billions in economic activity hang in the balance.