NAFTA Trade Agreement Essay Example

NAFTA is a trade agreement that was initially signed by the USA, Mexico and Canada. Following differences that arose with the operation of the Trump regime, the agreement came to a temporary termination. Recent efforts to bring the union back together bore no efforts due to disagreements on the trade terms. The countries are willing to revive the free trade agreement but it has not yet happened. Efforts to sign a new agreement were scheduled to be complete by August but it has not been possible because some countries especially Canada are not ready to accept terms imposed on them. The USA has gone ahead to sign a bilateral trade agreement with Mexico leaving Canada behind, a move that has given rise to many controversies. The move to reconstruct NAFTA without Canada would have more negative than positive impacts.

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The move to sign a bilateral agreement between Mexico and the USA will have a negative influence on the three countries. Mexico will especially feel the pressure from the USA since it will only be the two of them in the partnership. Mexico will have to bear the pressure that it previously shared with Canada. Canada will suffer from lack of the privileges and benefits that come along with free trade agreements. The USA, on the other hand, will feel the loss by not trading freely with Canada and especially in relation to the goods that the two countries imported or exported from each other.

The USA Senate and leaders in the current government have given warnings against going ahead and signing the agreement without Canada in the equation. These individuals who are mostly dealing with the trade sectors and heading the trade associations are giving economic reasons for their stands. The argument is that such a move is going to have a negative impact on the economic system of the USA.

Canada and its governance are reluctant to sign the trade agreement which they have viewed as oppressive and unworthy of their efforts. The US government has complained that the trade agreement has been very bad for the USA and therefore need for reforms. The suggested reforms, however, do not favour Canada and it is the reason they are slow to make a decision on whether to join in or not. The move by Canada to derail on the feedback on whether to get back to the trilateral deal is a good one because it shows that the country is smart enough not to be carried away by the opinions of others that would eventually hurt them.

The USA and Canada are positive towards resolving their differences and reconstructing NAFTA. However, Trump has threatened to leave Canada out of the picture blaming their reluctance to come to the negotiating table. He, therefore, announced a bilateral trade agreement that he named USA Mexico trade agreement, but also made it clear that Canada is expected to either come in or remain out. Canada's decision will dictate whether the name will remain as Trump announced or it will change to incorporate Canada. This is a clear show that the USA president would not be satisfied if the agreement is signed without Canada. After all, the trade agreement between the USA and Mexico cannot be the greatest trade deal that has ever existed, as Trump says. His sentiments are only exaggerated and meant to make Canada feel miserable for not being part of it.

Trump also announced that Canada would suffer if they did not reach an agreement with the other two countries. He threatened that there would be tariffs on automobiles if they did not agree to come to the negotiating table and make a deal like has happened before. If this happened, the USA would also suffer from a shortage of the products that they import from Canada. On the other hand, Canada would suffer as the USA president denoted and the countries would have to look for new trade partners to compensate for the losses.

Canada and the USA are hopeful that they will resolve their differences and they have both expressed their desire to do so. The United States is ready to compromise some of its terms of trade in order to accommodate Canada. The latter country, however, has not yet compromised and it is the reason it has not entered the agreement yet. However, there are positive sentiments from the Canadian government officials claiming that there are ongoing talks that will probably lead to something good. President Trump also claims that the Canadian president called him on the same issue. The call is a positive sign that Canada will finally come to the negotiating table.

Conclusion

NAFTA, a free trade agreement that has existed for the last 24 years has had great benefits for the three countries involved. It is expected that there will be reforms with the agreement but a break of the same will greatly affect the countries in a negative way. It would be better if Canada agrees to come to the negotiating table so that the good relations that have existed will continue and therefore enjoy the benefits.

Bibliography

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The Editorial Board. "Opinion | A Bogus Deal on Nafta." The New York Times - Breaking News, World News & Multimedia. Last modified September 7, 2018. https://www.nytimes.com/2018/09/02/opinion/trump-nafta-deal.html.

Hains, Tim. "President Trump Announces Bilateral Trade Deal With Mexico: "Getting Rid Of NAFTA Name"." RealClearPolitics - Opinion, News, Analysis, Video and Polls. Last modified August 27, 2018. https://www.realclearpolitics.com/video/2018/08/27/watch_live_president_trump_agrees_to_updated_nafta_deal_with_mexico.html.

"Op-Ed: Canada's Foreign Affairs Minister Hopes for NAFTA Agreement Soon." Digital Journal: A Global Digital Media Network. Last modified August 6, 2018. http://www.digitaljournal.com/news/politics/op-ed-canada-s-foreign-affairs-minister-hopes-for-nafta-agreement-soon/article/528926

Rodriguez, Sabrina, Adam Behsudi, Megan Cassella, and Doug Palmer. "Trump Embraces Mexico, Threatens Canada with Trade Deal." POLITICO. Last modified August 27, 2018. https://www.politico.com/story/2018/08/27/us-mexico-trade-deal-nafta-trump-administration-797464.

Swanson, Ana, Alan Rappeport, and Jennifer Steinhauer. "Canada and U.S. Express Optimism As Pressure Builds to Reach Nafta Accord." The New York Times - Breaking News, World News & Multimedia. Last modified August 30, 2018. https://www.nytimes.com/2018/08/29/business/canada-nafta-mexico-trump.html?action=click&module=Top%20Stories&pgtype=Homepage.

Toomey, Pat. "Don't Try to Blackmail Us on Nafta, Mr. President." WSJ. Last modified May 10, 2018. https://www.wsj.com/articles/dont-try-to-blackmail-us-on-nafta-mr-president-1525992824.