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First Steps Being Taken Towards Scrapping or Renegotiation of NAFTA
If the White House is indeed proceeding under fast-track authority, that suggests Trump could intend to scrap NAFTA altogether and forge bilateral trade deals with Mexico and Canada instead, said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics.
This historic shift in trade policy is likely to have wide-ranging implications for multinational companies, which have strung factories and facilities across the North America to take advantage of NAFTA’s terms. It could also portend changes for American consumers, who for decades have enjoyed cheap goods manufactured just over the border.
NAFTA became a divisive issue in the 2016 campaign, as critics on both the left and the right disparaged it for siphoning off good-paying American manufacturing jobs. Trump repeatedly criticized former President Bill Clinton’s role in negotiating NAFTA, calling it “the worst trade deal maybe ever signed anywhere.”
Economists have generally disagreed, or expressed more nuanced concerns. In a panel of 41 prominent economists surveyed in 2012 by the University of Chicago, 85 percent agreed or strongly agreed that Americans were better off under NAFTA than previously existing trade rules among the U.S., Canada and Mexico, while only 5 percent said they were uncertain. None disagreed with the statement.