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As Trump weighs options, what are the hazards of unwinding NAFTA?

April 27, 2017 at 6:45 PM EDT
President Trump has offered tough talk and mixed signals on the future of NAFTA. On Thursday, Mr. Trump said he agreed to give the trade agreement another shot, while leaving open the possibility that the U.S. might yet withdraw if negotiations don’t pan out. John Yang reports on the president’s comments, then Judy Woodruff speaks with Rep. Tim Ryan, R-Ohio, about NAFTA’s effect on his community.
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JUDY WOODRUFF: Now: President Trump’s tough talk and threats over the North American Free Trade Agreement and the push to revisit the 23-year-old deal.

It’s been a central theme for the president and a source of anger and anxiety among some voters.

At the White House, John Yang starts us off.

PRESIDENT DONALD TRUMP: Rather than terminating NAFTA, which would be a pretty big shock to the system, we will renegotiate.

JOHN YANG: With the visiting president of Argentina looking on, President Trump told reporters he made his decision after talking to the leaders of Mexico and Canada.

PRESIDENT DONALD TRUMP: I was going to terminate NAFTA as of two or three days from now. The president of Mexico, who I have a very, very good relationship, called me, and also the prime minister of Canada, who I have a very good relationship. And I like both of these gentlemen very much. They called me. And they said, rather than terminating NAFTA, could you please renegotiate?

JOHN YANG: Canadian Prime Minister Justin Trudeau said today terminating the 23-year-old deal would cause a lot of problems.

JUSTIN TRUDEAU, Canadian Prime Minister: I highlighted that, quite frankly, whether or not there was a better deal to come, there were an awful lot of jobs, an awful lot of industries right now that have been developed under the NAFTA context. And a disruption like canceling NAFTA, even if it, theoretically, eventually might lead to better outcomes, would cause a lot of short- and medium-term pain for an awful lot of families.

JOHN YANG: There have been conflicting reports about Mr. Trump’s intentions on NAFTA, reflecting the internal debate and division among his advisers.

Big business and agricultural interests had argued against outright canceling the deal, which brought down most trade barriers between the United States, Canada and Mexico. Unhappiness with NAFTA was a signature campaign issue.

PRESIDENT DONALD TRUMP: I’m going to renegotiate NAFTA, one of the worst trade deals ever signed in the history of our country, perhaps the worst ever signed in the history, frankly, of the world.

JOHN YANG: The move comes as the administration gets tough on trade as it nears the 100-day mark. This week, the White House announced new tariffs on Canadian softwood lumber imports, and the president said U.S. milk was being blocked from Canadian markets.

PRESIDENT DONALD TRUMP: If I’m unable to make a fair deal for the United States, meaning a fair deal for our workers and our companies, I will terminate NAFTA.

JOHN YANG: While the president said negotiations are starting today, in fact, the United States has to give legal notice of its intent to renegotiate. Then comes a 90-day period of consultation before any talks can begin.

For the PBS NewsHour, I’m John Yang at the White House.

JUDY WOODRUFF: Now for one perspective on the latest signals from the White House on American trade negotiations, I spoke with Representative Tim Ryan. He’s a Democrat from Ohio who agrees with the president that NAFTA has hurt the U.S. more than it’s helped.

REP. TIM RYAN, D-Ohio: Well, it certainly has devastated communities. A lot of the promises that were made, that we were going to have trade surpluses with Mexico, never came to fruition.

We have about a $4 billion trade deficit every single month. We have lost about 160-some-thousand jobs up to 2013 directly related to trade with Mexico primarily. And the jobs that kind of replaced those jobs are about $7,000 a year less in pay.

So, it has wiped out entire communities. I understand, in the aggregate, sometimes, a lot of free trade proponents say that it’s good in the aggregate, but when it’s not in the aggregate, it’s wiped out a lot of communities like the ones I represent in Northeast Ohio.

JUDY WOODRUFF: Well, what do you make of the president’s statements over the last day or so? He started out saying that he wanted to terminate the U.S. participation in NAFTA, and then later on, he said, no, I will negotiate, now that I have talked to the leaders in Mexico and Canada.

REP. TIM RYAN: Well, it certainly is not the first day of these 100 days where the president has said some inconsistent statements back-to-back. He’s been doing that throughout his presidency.

So, it worries me, because I think he may be a little too flippant with how he handles this situation. While I know NAFTA has devastated many communities, maybe unwinding NAFTA in a way that isn’t prudent can do even more damage.

These are supply chains that have been integrated over the last almost 30 years. And so it’s going to take time and effort and patience and a lot of work to reestablish a more fair trading regime. And I get the sense that the president doesn’t have the attention span, quite frankly, to be able to sit down and hammer those kind of things out.

And when you see his tweets and you see his statements that conflict each other within hours of each other, it makes you worry that maybe he’s just not the guy to handle this.

JUDY WOODRUFF: So, we heard him in the campaign say that NAFTA was one of the worst deals ever made in the United States. It sounds like — are you saying you’re worried the the’s not going to follow through on this?

REP. TIM RYAN: Well, I’m worried that he may follow through in a way that doesn’t make things better. He may actually make the problem worse, if he doesn’t sit down and pay attention and work this the way it needs to be worked.

We have seen the devastation that it caused, and we know it needs fix, but is he the person to sit down and actually fix it? And the fact that he doesn’t quite understand the ramifications, quite frankly, even the process — he said they already started negotiating, when the fact of the matter is you have to send a letter to Congress to even begin the process of having the conversation within your own country, within your own Congress, within the industry groups that would be affected by it.

That’s a 90-day process before you even start the negotiations with the other countries. And the fact that he didn’t even know that before he made his statements, both — the statement — is worrisome to me that he may actually, through trying to — excuse me — renegotiate NAFTA, he may actually make the process worse.

JUDY WOODRUFF: You said a minute ago that you hear these arguments ultimately the U.S. will benefit. You don’t see that yet.

But there are — you have fellow Democrats, Congressman Ron Kind of Wisconsin, for example, who says, you undo NAFTA, he says you’re going to decimate the dairy industry in his state. He said half the industry will be wiped out if NAFTA goes away.

What do you say to him?

REP. TIM RYAN: This is exactly why you need to be very methodical and very thorough in your negotiations, in your conversations with how you’re going to handle all of these scenarios, whether it’s pharmaceuticals, whether it’s the dairy industry, local foods, food protection.

All of these issues are on the table once you open this thing up, and so you need people and you need a president that’s going to be able to understand that, when you move one piece on the chessboard, a lot of other pieces are going to move simultaneously. And I don’t think he quite understands that.

And really the reality too, is, Judy, is that automation in the next decade or so is really going to be the 800-pound elephant in the middle of the room that we need to satisfy. That’s a whole other show you could do, but it’s not just NAFTA. It’s not just trade.

The main issue coming down the pike is automation, displacing workers, whether it’s in manufacturing, driverless cars, in the retail sector, in grocery stores. Automation is going to be the thing displacing.

So, I don’t want him to — there’s no plan in this administration to be able to deal with that main issue that is really going to face most workers in the American work force in the next couple of decades.

JUDY WOODRUFF: We hear you.

Representative Tim Ryan, thank you very much.

REP. TIM RYAN: Thanks, Judy.

JUDY WOODRUFF: And we will get a different perspective on NAFTA from Ohio’s Republican Governor John Kasich later in the program.

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