The North American Free Trade Agreement, or simply the NAFTA, is currently being discussed in the media because President Donald Trump predicted the end of the agreement because of unfavorable conditions for the United States.
The agreement was signed in 1994 and is considered one of the key achievements of the previous US President – Bill Clinton. NAFTA is the largest free trade agreement in the world and over the past 20 years it has brought many benefits to the economies of the participating countries: the USA, Canada and Mexico.
The purpose of the agreement was not only to stimulate trade between the participants, but also to increase the competitiveness of these countries in world markets.
3 days after the republican magnate assumed the presidency, he signed an executive order to renegotiate NAFTA conditions. Trump believes that the agreement led to the fact that American jobs have gone to Mexico, where the cost of labor is much lower.
And Trump is not just a few items to discuss. Recently, the White House published a 17-page document that contains all intentions regarding this process. In general, we can say that the essence is to return jobs in the United States and reduce the trade deficit.
The document itself: https://ustr.gov/sites/default/files/files/Press/Releases/NAFTAObjectives.pdf
“Personally, I believe that we will not come to anything … I believe that in the end the agreement will be terminated,” Trump said at a meeting with his supporters last week in Arizona, giving a hint that people we should expect a new agreement in the near future.
“Personally, I believe that it will not be possible to conclude a new deal without breaking the previous one, but we will see what happens. You are in safe hands, I can assure you, ”he added.
However, even members of his administration recognize that the end of the agreement will not help the United States. Although it caused the trade deficit to rise, it also provided lower prices for food and oil.
So, can Trump break the agreement?
The answer is yes. However, the price of this is very high and if he is such a good businessman as he considers himself, common sense will make him change his mind. The end of the agreement – it will be a bold step that can be regarded as unconstitutional due to the fact that this effect on trade without the permission of Congress.