Will Trump Torpedo North American Trade?

"For more than a year, starting in 2017, envoys from the United States, Canada, and Mexico met to determine the future of a trade alliance worth trillions of dollars. They clashed over everything from labor laws to the minutiae of duty-free imports, while repeatedly deflecting President Donald Trump's threats to withdraw from the agreement. In the fall of 2018, they were finally prepared to sign what came to be known as the United States-Mexico-Canada Agreement."

"NAFTA was what is called a "forever deal"-as with all of America's major trade agreements, its terms were permanently fixed. This frustrated Trump's trade czar, Robert Lighthizer, who believed that NAFTA had resulted in thousands of job losses and a ballooning trade deficit. Lighthizer wanted the U.S.M.C.A. to have an escape hatch: a review mechanism, or perhaps a fixed term. So he proposed that the agreement expire after four years."

"Mexican and Canadian officials thought that it was insane: no business would expose its investments to a deal that could end so quickly. Even prominent Republicans expressed opposition. But Lighthizer found an ally in Jared Kushner, Trump's key adviser on Mexico. Kushner had come to see trade negotiations as a game of mutual bluffing; the key to success, in his view, was getting your counterparts to "believe you are going to jump off a cliff.""

Envoys from the United States, Canada, and Mexico negotiated for more than a year to remake NAFTA into the United States-Mexico-Canada Agreement. Negotiators clashed over labor rules, duty-free details, and the stability of the pact while managing threats of U.S. withdrawal. Robert Lighthizer pushed for a review mechanism or a fixed four-year term to create an escape hatch, arguing NAFTA caused job losses and a growing trade deficit. Mexican and Canadian officials resisted a short term as destabilizing to investment. Jared Kushner backed aggressive bargaining tactics and aligned with Lighthizer on strategy.

Read at The New Yorker