NAFTA Negotiations
WASHINGTON D.C. - President Donald Trump wants to renegotiate NAFTA deals, if he is not satisfied with the proposal, he declares that he will terminate NAFTA, but the consequences of ending NAFTA can create a big affect on all parties involved.
The NAFTA negotiations were proposed since the summer this year, but a conclusion has not been made. NAFTA (North American Free Trade Agreement) was first started in 1992, when George H.W. Bush was in office. It involves three countries: Canada, Mexico and the United States. Trump describes the deal as, “the worst trade deal ever made.”
The negotiation from the U.S. is hoping to raise the percentage of cars made in the country. Mexico does agree to this deal. As of now, 62.5% of the car parts come from Canada, Mexico or the U.S. The White House want to raise that percentage to 85% and have 50% of the car parts originate from the US.
Tension grows as leaders from the other countries weigh the consequences of ending NAFTA. The Foreign Minister for Canada, Chrystia Freeland explains why Canada is useful in the trade. She describes the country as “the girl next door,” meaning Americans take the country for granted, but actually, she says, “ Canada is the largest market for the United States. Larger than China, Japan and the U.K. combined.” By ending the deal, the economy of these two countries would flop.
The U.S. is vulnerable if the trade is cut off because many states such as Texas, California and New Mexico rely on trading with Mexico.
Examples of this trading would be agriculture. Mexico consumes corn more and more every day, relying on its trading partners to provide the crop. Another example would be: Mexico relies on the import of oil from the U.S. Last year, according to Pemex, Mexico, the amount of oil import is 62%.
In conclusion, the ending of Nafta would basically: close plants, ending jobs, and many businesses would lose an huge amounts of money. And although the POTUS has a lot of power to end the deal, Congress has influence in the decision making. The power to approve, and to terminate U.S. participation in trades is in the hand of Congress. The next round of debate on the deal will be in November 17 in Mexico City.
