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Nate Jackson / Jul. 21, 2017

Renegotiating NAFTA

The Trump administration has released its priorities for reworking the free trade deal with Canada and Mexico.

On the campaign trail, Donald Trump promised to renegotiate the North American Free Trade Agreement (NAFTA) or leave it entirely, calling it the “worst trade deal maybe ever signed anywhere.” There are certainly elements of NAFTA that could use renegotiation, but overall, it’s a positive deal for the U.S. In April, Trump’s advisers talked him down from the ledge, in part because of how much his constituent farmers benefit from the trade agreement. This week, the administration released its Summary of Objectives for the NAFTA Renegotiation.

The administration says, “The new NAFTA must continue to break down barriers to American exports. This includes the elimination of unfair subsidies, market-distorting practices by state owned enterprises, and burdensome restrictions of intellectual property. The new NAFTA will be modernized to reflect 21st century standards and will reflect a fairer deal, addressing America’s persistent trade imbalances in North America. It will ensure that the United States obtains more open, equitable, secure, and reciprocal market access, and that our trade agreement with our two largest export markets is effectively implemented and enforced.”

U.S. Trade Representative Robert Lighthizer will reportedly focus on intellectual property, financial service, telecommunications and e-commerce — all areas where the U.S. has a competitive advantage. Since NAFTA was enacted in 1993, The Wall Street Journal notes, “Farm and ranch exports to Mexico and Canada have more than quadrupled.” Removing any remaining obstructions like Canadian tariffs on American poultry, eggs and wine would be a good move for the administration. To make a larger point, Trump shouldn’t opt for a tit-for-tat deal with more barriers. He would do far better pushing for more open markets from our neighbors.

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