What does a TRUMP presidency look like?

[jimmy olsen]

NAFTA's back on the chopping block

https://slate.com/business/2018/06/trump-wants-to-kill-nafta-not-negotiate-a-better-deal.html?via=taps_top

It Really Looks Like Trump Wants to Kill NAFTA

By Jordan Weissmann   
June 06, 2018•9:48 AM 

Donald Trump does not want to renegotiate the North American Free Trade Agreement. He wants to kill it.

That, more or less, is the message Larry Kudlow, director of the White House's National Economic Council, delivered during a Tuesday morning appearance on Fox & Friends. The president "is very seriously contemplating kind of a shift in the NAFTA negotiations," which are currently at an impasse, Kudlow said. "His preference now, and he asked me to convey this, is to actually negotiate with Mexico and Canada separately. He prefers bilateral negotiations."

Saying that you want to carve NAFTA into a series of two-way deals is another way of saying that you want to end it. The entire point of the pact is to create a single set of rules for trade between Canada, the United States, and Mexico. Without that, there is no NAFTA.

Despite being the bearer of bad news for free trade supporters, Kudlow tried to reassure viewers that the White House isn't about to do anything rash. "The president isn't going to leave NAFTA," he said. "He's not going to withdraw from NAFTA. He's just going to try a different approach." This is not especially soothing, though, since it's not clear why Canadian or Mexican officials would agree to negotiate one-on-one with Washington unless the White House first pulled out of the current deal. At the moment, it sounds like Trump is essentially demanding the house and sole custody of the kids before even filing for divorce.

The administration's move is not entirely surprising. In fact, some predicted it. After the president suggested in October that the U.S. might be open to a solo free trade deal with Canada if NAFTA talks crumbled, one of the country's former trade negotiators speculated that we might see the sort of scenario that now seems to be unfolding:

The U.S. administration's game plan is now clear: Make multiple outrageous demands that, even if partially accepted, constitute a huge "America First" victory; or, if rejected outright by Canada and Mexico, set up a failed negotiation and a messy denouement—also a win in terms of U.S. President Donald Trump's public antipathy to the North American free-trade agreement.

What is now apparent about that prospective denouement is the likelihood of the United States promoting separate bilateral negotiations with Canada and Mexico after jettisoning three-way NAFTA talks.

Negotiations over NAFTA hit a wall recently after the Trump administration demanded that any new deal include an automatic five-year expiration date, after which all three countries would have to agree to renew it. Now, Trump—via Kudlow—says its time to abandon three-way talks altogether. Things are playing out exactly as you'd expect if the administration's ultimate goal was to bury NAFTA for good.

Ever since his campaign, Trump has argued that the United States would be better off negotiating bilateral free trade deals. That's the line Kudlow more or less stuck to on Fox. Canada and Mexico are "different countries" with "different problems," and "countries that are different probably deserve different deals," he explained. "Oftentimes, when you have to compromise with three countries, you get the worst of the deals. Why not try to get the best of the deals for the American people, American workforce, and the American economy, and presumably for their economies as well?"

This case is a bit flimsy. Having lots of two-way trade agreements with individual countries can create a confusing mess of rules for businesses that make it harder to import and export. (Experts call this the "spaghetti bowl effect.") And sometimes, having more countries at the table can make it easier, not harder, to reach an agreement where everyone comes away happy, since negotiators can pull off the equivalent of three-way trades in sports. Mexico might give the U.S. better terms on car parts, for instance, if it can get somethingz valuable in return from Canada.

But Trump's concept of negotiations has never seemed to operate on that level of sophistication. Instead, he sees bargaining more like a sumo match where two countries try to charge and wrestle one another to the floor. Now, he's telling Mexico and Canada he wants to throw down.

[crazy canuck]

Not sure why Canada and Mexico would ever agree to separate negotiations.

By the way, for you Americans who might not be following along at home, the only reason a new NAFTA agreement was not made last week is Trump insisted on a 5 year sunset clause.  Two words.  Deal Breaker.

[frunk]

What happens when a bad tempered distractible doofus runs an Empire

Wilhelm was a compulsive speechmaker who constantly strayed off script. Even his staff couldn't stop him, though it tried, distributing copies of speeches to the German press before he'd actually given them. Unfortunately, the Austrian press printed the speeches as they were delivered, and the gaffes and insults soon circulated around Europe. "There is only one person who is master in this empire and I am not going to tolerate any other," Wilhelm liked to say, even though Germany had a democratic assembly and political parties. ("I'm the only one that matters," Trump has said.) The Kaiser reserved particular abuse for political parties that voted against his policies. "I regard every Social Democrat as an enemy of the Fatherland," he said, and he denounced the German Socialist party as a "gang of traitors." August Bebel, the Socialist party leader, said that every time the Kaiser opened his mouth, the party gained another hundred thousand votes.

[Valmy]

Not sure why Canada and Mexico would ever agree to separate negotiations.

By the way, for you Americans who might not be following along at home, the only reason a new NAFTA agreement was not made last week is Trump insisted on a 5 year sunset clause.  Two words.  Deal Breaker.

Millions of our voters were convinced that technology and society would revert back to the 1970s if only NAFTA could be overturned. This is not a negotiation.

[Grey Fox]

Only Donald Trump could make me an advocate for Free Trade.

Urg.

[Jacob]

So what does the process for ending NAFTA look like? Does it just come down to Trump writing an executive order that tears up the treaty, or does Congress have to get involved?

[Eddie Teach]

Not sure why Canada and Mexico would ever agree to separate negotiations.

If the US were unwilling to do a threeway, they wouldn't have much choice. You're not just gonna pass up on the biggest market in the world.

[Zoupa]

Your 1st phrase and 2nd phrase are unrelated.

[Eddie Teach]

Right forgot about Euro states quasi-independence. Still, a huge market they want in.

[crazy canuck]

Not sure why Canada and Mexico would ever agree to separate negotiations.

If the US were unwilling to do a threeway, they wouldn't have much choice. You're not just gonna pass up on the biggest market in the world.

In fact Trump cannot negotiate separately without the consent of both Canada and Mexico and there is no reason either would give that consent.  The only other option Trump has is to trigger the termination provisions under the NAFTA agreement.  That would create so much economic chaos in the US that it is unlikely he would have any political support for that action.

[grumbler]

So what does the process for ending NAFTA look like? Does it just come down to Trump writing an executive order that tears up the treaty, or does Congress have to get involved?

NAFTA is a treaty - it is US law.  Whether or not Trump can abrogate it unilaterally is an open question.  the treaty itself just provides a 6-month notice of the intent to withdraw, but the authorization law accompanying its ratification doesn't specify the internal US terms for such notice. 

[grumbler]

If the US were unwilling to do a threeway, they wouldn't have much choice. You're not just gonna pass up on the biggest market in the world.

Yeah, Canada and Mexico never in their history had a period in which they didn't have a free trade agreement with the US; obviously, they'd never survive one starting today.  They'd have t negotiate for one with the US.

NOT

[Valmy]

Not sure why Canada and Mexico would ever agree to separate negotiations.

If the US were unwilling to do a threeway, they wouldn't have much choice. You're not just gonna pass up on the biggest market in the world.

They are also our biggest markets for our goods. Everybody is going to lose.

[Valmy]

Right forgot about Euro states quasi-independence. Still, a huge market they want in.

Yeah but there is this thing called nationalism. Once you start shitting on people they start acting idiotically in opposition to their own interests. I am not sure what grounds you have to assume they are going to act rationally when we aren't.

[Jacob]

NAFTA is a treaty - it is US law.  Whether or not Trump can abrogate it unilaterally is an open question.  the treaty itself just provides a 6-month notice of the intent to withdraw, but the authorization law accompanying its ratification doesn't specify the internal US terms for such notice.

Thanks.

So Trump could say he's going to withdraw the US from NAFTA and sign, say, an executive order to that effect. That would then force the US to decide internally whether it's valid or not.

My guess on the script:

1) Trump will say he thinks we should withdraw from NAFTA.
2) He'll change his mind and say that NAFTA is okay for now.
3) Steps 1 & 2 will be repeated a number of times.
4) Eventually he'll actually withdraw from NAFTA using whatever step his staff and advisors deem to be the official way of doing it. However that is done, it will be precedent breaking and controversial.
5) There'll be one or more last-ditch attempts to keep NAFTA going.
6) Ultimately, Trump pushes through and the US withdraws.

The time between each step is dependent on the levels of push-back and support. Also, each step will be used by Trump to attempt to wring concessions from those in his periphery (Canada & Mexico, American companies, other politicians) to the benefit of himself and his coterie. This on-again-off-again blustery style is, IMO, the essence of Trump's MO and how he approaches pretty much every issue.

It is quite possible that it never gets beyond step 3 in the script, depending on the level of pushback and whatever other irons he has in the fire, but the overall trajectory is how he handles pretty much every aspect of politics.