The North American Free Trade Agreement (NAFTA) is a trade deal between the U.S., Mexico, and Canada that was negotiated by President George H.W. Bush and implemented under President Bill Clinton in 1994. According to Business Insider:
NAFTA eliminated most tariffs, such as taxes on imports and exports, and on traded goods among the three nations. It put in place processes to get rid of other trade barriers too [...] The point of NAFTA was to encourage economic integration among the US, Mexico, and Canada. And that, by extension, was supposed to boost economic prosperity for all three.
President Trump made bad trade deals a cornerstone of his campaign, claiming they were largely responsible for destroying America's working class.
Globalization has made the financial elite, who donate to politicians, very, very wealthy. [...] But it has left millions of our workers with nothing but poverty and heartache.
In a speech given on the campaign trail in 2016, Trump promised he would "withdraw from the deal" if our NAFTA partners did not agree to "a renegotiation."
But President Trump isn't alone in his criticism of NAFTA. He and Bernie Sanders share many of the same beliefs about global trade deals, which they argue hurt working Americans. Sanders called NAFTA and TPP "disastrous" trade deals during his campaign and criticized Hillary Clinton for waffling on her trade stance.
“We have to lift up the standard of living of workers in this country and throughout the world,” he said. “Trade is a good thing. But it has got to be based on fair principles, not unfettered free trade.”
Sanders called on Trump to keep his promises to working-class Americans and replace NAFTA.
“When Donald Trump campaigned for president, he promised that he was going to stop corporations from shifting American jobs to Mexico,” Sanders said Wednesday at a rally for the #ReplaceNafta movement in Washington. “For once in your life, keep your promises.”
But defenders of NAFTA argue its demise would only damage the economy and lead to more Americans losing their jobs.
American farmers, restaurant workers and some manufacturing employees would get hit hard if Trump pulls out of NAFTA, according to an in-depth analysis published in August by ImpactECON, a consulting firm in Colorado. Its economists ran two post-NAFTA scenarios:
1. American wages decline: 255,000 people, all low-skilled workers, would lose their jobs
2. American wages don't decline: 1.2 million low- and high-skilled workers lose their jobs. Why? Because workers would still be relatively expensive while imported products would become more expensive due to tariffs.
Ana Swanson argues in the New York Times that NAFTA's slow, painful demise would devastate North American commerce. While it may be easy for the Trump administration to criticize trade deals, forging a better way forward is much more difficult work.
The Trump administration came into office promising to scrap or overhaul trade deals like NAFTA and the Trans-Pacific Partnership and forge new bilateral deals in their stead. But the NAFTA talks illustrate that the Trump administration has found it easier to criticize trade deals than forge politically popular ways to amend them.