A DEMOCRAT TO TRUMP: WE ARE (MAY BE) YOUR NAFTA ALLIES

"Most congressional Republicans have supported the trade deals you oppose. Most congressional Democrats have opposed these agreements and fought for decades to develop new policies that can harvest the benefits of expanded trade without undermining U.S. jobs and wages, access to affordable medicines, or the food and safety and environmental protections on which our families rely."

Rosa DeLauro

The members of the 115th Congress were sworn in last Tuesday, January 3. For Representative Rosa DeLauro, the Dean of the Connecticut Delegation, it was the 14th such occasion since her first term began in January 1991. And it wasn't the only thing the Connecticut Democrat did that day. Among other things, she fired off a letter to President-elect Donald Trump, effectively urging him to move quickly on his campaign pledge to renegotiate NAFTA, and setting out what she believes such a renegotiation should accomplish. Today's featured quote is from the first paragraph of that letter. 

It is not clear to us that everyone was saying the same thing.   As we read Ms. DeLauro's letter to Mr. Trump, it seemed to express a broad statement of her objectives - admittedly many shared by other Democrats - but probably beyond the scope of what a President Trump would want to achieve in such a negotiation. To mention a few, and without classifying where they fall, Representative DeLauro called for:

• Replacing the current advisory system,
• Making negotiating texts public after each round of negotiations,
• "[E]liminating the existing special perks for drug firms already in NAFTA,"
• Eliminating the investor-state dispute settlement provisions of NAFTA,
• Eliminating certain government procurement requirements of NAFTA,
• Adding a currency manipulation provision so that the United States, Mexico and Canada can more effectively "confront currency manipulation by China,"
• Adding new rules on agriculture, and
• Raising "Mexican wages above the average of $2.50 per hour."

Another Democratic Congresswoman at last week's NAFTA press conference was Representative Debbie Dingell from Michigan's 12th Congressional District. After declaring that she and her colleagues are ready to work with President-elect Trump, Ms. Dingell talked about NAFTA's rules of origin. She said:

Those comments would seem to dovetail nicely with the argument put forward by candidate Trump when he visited Mexico last summer. During his joint news conference with President Enrique Peña Nieto, Mr. Trump was candid about his view that NAFTA has benefited Mexico more than the United States and that it needs to be updated. "There are," he said, "many improvements that could be made that would make both Mexico and the United States stronger and keep industry in our hemisphere."

As with just about everything else in politics, this Democratic push for NAFTA renegotiations is complicated. Some part of this effort, we suspect, is aimed at undercutting the political competitor, hoisting him on his own petard so to speak by associating him with goals he cannot (or will not) meet. And part of it, we believe, is genuine. In some sense, they do want him to succeed. 

 
For our part, we are in no doubt that an effort will be made to renegotiate, to improve, NAFTA, but we have no idea where it will lead. Like everyone else who cares about trade, what we have are questions. Here are two of them. 

NAFTA and Autos. Automobile production in North America is a big part of the NAFTA debate. The problem is that too often that discussion seems to relate only to the so-called Big Three - GM, Ford, and Chrysler. There are many other companies producing cars in the United States. The Wikipedia entry on U.S. auto production mentions the following additional firms:
Toyota,
Honda,
Nissan,
Subaru,
Volkswagen,
Hyundai,
Kia,
BMW, and
Mercedes-Benz.

And we should add Volvo, which broke ground in 2015 on a new plant in Berkeley, South Carolina. The company expects that half of the production of that plant will be exported. 

So, one question is this: how important are the current NAFTA arrangements to the success of those facilities? We don't know the answer to that. It is, however, one of those questions we hope gets looked at thoroughly before they start ripping up the roses in the NAFTA garden. 

The President-elect. Finally, there is a question about Donald Trump himself. Who is he? What are his aims? Some see him simply as a protectionist. We are not in that camp. Your editor once worked for a man, a real trade expert, who liked to describe himself where trade was concerned this way. "I'm a dove in hawk's feathers," he would say, "a dove in hawk's feathers." That's not necessarily a bad thing to be if you're negotiating, and Donald Trump is always negotiating.