Donald Trump declared victory on NAFTA Monday morning, but it seems that his main victory was over the name NAFTA. Instead of the North American Free Trade Agreement, we will now have the U.S.-Mexico-Canada-Agreement, a name Trump dwelled on during his remarks. This makes some sense, since while Trump knew he was opposed to NAFTA as it previously existed, there’s little chance he knew much about its provisions.
Trump’s announcement included the expected stream of lies, misrepresentations, and ignorance, although, interestingly, the Toronto Star’s Daniel Dale reports that “Trump isn't gloating that he's dominated the other two countries: ‘This is good for all three.’”
A key concession Trump had sought, and somewhat gained, was on dairy products, with the U.S. getting access to 3.6 percent of the Canadian dairy market. While this is a bump up, it’s only slightly more than the 3.25 percent that Canada had agreed to as part of the Trans-Pacific Partnership, which Trump pulled out of.
One provision previously announced as part of the bilateral U.S.-Mexico deal and included in the trilateral deal with Canada is that to qualify for zero tariffs, a percentage of any car has to be manufactured in a factory with an average production wage of at least $16 an hour. However, the New York Times editorial board noted in early September that “no Mexican autoworkers earn $16 an hour, and none will”:
The logic here is that auto-related jobs would supposedly flood back to the United States as labor costs rise in Mexico. That logic is dubious. Automakers in Mexico would rather pay the 2.5 percent tariff, figuring it would not raise prices enough to hurt sales seriously.
So … we’ll see.
As for tariffs, Trump claimed that his tariffs made this deal possible. He also claimed that other U.S. presidents “never spoke to India” about trade, which is hilariously false. His biggest lie, though, was probably this: “It’s a brand new deal.” No. It’s NAFTA with a new name and a few tweaks.
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