As the US, Canada and Mexico kick off negotiations on Wednesday to modernize the North American Free Trade Agreement, the biggest uncertainty is whether a deal can pass President Donald Trump’s “America First” test.
Trump has blamed NAFTA for shuttering US factories and sending US jobs to low-wage Mexico.
The test will be whether negotiators can prove that a new NAFTA agreement can alter that course.
The call from the US-business-community in the run-up to the talks has been “do-no-harm” amid concerns that a new agreement will unravel a complex North American network of manufacturing suppliers built around NAFTA.
Trump pulled the US out of the Trans Pacific Partnership trade pact shortly after taking office in January.
The American president made trade a centerpiece of his presidential campaign as he promised to reinvigorate the manufacturing sector.
However, he has since backed off other trade threats, including declaring China a currency manipulator and tearing up NAFTA, which he regularly calls a disaster.
US-Canada-Mexico trade has quadrupled since NAFTA took effect in 1994, surpassing one trillion dollars in 2015.
Derek Burney said that in the previous NAFTA talks there was a political commitment from all sides to reach a deal. That is not the case now, he said.
Burney was a former Canadian ambassador to Washington who was involved in the first NAFTA negotiations. (NAN)