As the Trump administration prepares to renegotiate NAFTA, the underlying logic of the US’s new approach to trade is about to receive prime-time scrutiny. When it does, the missed opportunities – on labor, subsidies, and competitiveness, and much else – will be impossible to ignore.
LONDON – With all the public attention in the United States focused on health care, immigration, and Russia, the Trump administration’s trade policies have flown largely under the radar. But the underlying logic of President Donald Trump’s approach to trade is about to receive prime-time scrutiny, because the landmark North American Free Trade Agreement (NAFTA) will come up for renegotiation later this summer. When it does, three fundamental flaws in Trump’s thinking will be exposed.
For starters, there is Trump’s false premise that bad trade deals have cost US jobs. Automation and robotics led to the decline in manufacturing jobs in developed economies long before any major trade agreements were concluded. The forces of globalization may have aggravated these trends, but the point so often lost in the debate – and dismissed by so many on all sides – is that trade agreements are meant to tame the forces of globalization, not accelerate them.
With world tariffs declining for decades, today’s negotiations focus mostly on the rules that govern international commerce. The Trans-Pacific Partnership (TPP) trade agreement, which Trump abandoned with such fanfare after taking office, spelled out a range of enforceable commitments intended to level the playing field for US workers.
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LONDON – With all the public attention in the United States focused on health care, immigration, and Russia, the Trump administration’s trade policies have flown largely under the radar. But the underlying logic of President Donald Trump’s approach to trade is about to receive prime-time scrutiny, because the landmark North American Free Trade Agreement (NAFTA) will come up for renegotiation later this summer. When it does, three fundamental flaws in Trump’s thinking will be exposed.
For starters, there is Trump’s false premise that bad trade deals have cost US jobs. Automation and robotics led to the decline in manufacturing jobs in developed economies long before any major trade agreements were concluded. The forces of globalization may have aggravated these trends, but the point so often lost in the debate – and dismissed by so many on all sides – is that trade agreements are meant to tame the forces of globalization, not accelerate them.
With world tariffs declining for decades, today’s negotiations focus mostly on the rules that govern international commerce. The Trans-Pacific Partnership (TPP) trade agreement, which Trump abandoned with such fanfare after taking office, spelled out a range of enforceable commitments intended to level the playing field for US workers.
To continue reading, register now.
As a registered user, you can enjoy more PS content every month – for free.
Register
orSubscribe now for unlimited access to everything PS has to offer.
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