Trump’s threat to NAFTA

The latest round of NAFTA negotiations began on Wednesday the 11th and the theme of this week's talks was "America first" and the U.S. demand for more U.S.-made content.

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Photo Credit: Paresh Nath, The Khaleej Times, UAE

The latest round of NAFTA negotiations began on Wednesday the 11th and the theme of this week’s talks was “America first” and the U.S. demand for more U.S.-made content. According to an agenda obtained by Bloomberg News, the Trump administration looks to aggressively push to increase content requirements for cars, which Magna International Inc., a Canadian automotive supplier, has warned could increase cost and complexity of the industry.

But the continued U.S. demand for more favorable treatment, its proposal of a “sunset clause,”which would allow any new deal to expire after five years, and Trump’s threat to walk out of negotiations has heightened tensions. The President’s indifference to the trade deal was apparent when on Wednesday Trump said was open to bilateral trade pacts with either Canada or Mexico if NAFTA was not able to be renegotiated.

But while Mexico’s Peña Nieto and Canada’s Trudeau called for the preservation and modernization of the trade deal, we can’t help but ask, doesn’t Trump’s suggestion defeat the purpose? As John Murphy vice president at the Chamber of Commerce recently said in a New York Times article, in negotiations you “never take a hostage you wouldn’t shoot.”

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