As Nafta talks begin, Donald Trump's 'America first' agenda looms large

Three-way talks between the United States, Mexico, and Canada begin today to renegotiate what US President Donald Trump last year dubbed the "the worst deal ever made in the history of the world".

Trump called the North American Free Trade Agreement (Nafta) "a one-way highway out of the United States", tapping into deep-seated resentment among blue-collar workers who lost their jobs as a result of reduced trade barriers, cheap labour and goods.

Despite tough talk about Nafta during the presidential campaign, "it appears the administration has backed away from a major assault on the decades-old trade deal", says NPR.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Why the change of heart?

Although Trump vowed to "terminate" the agreement upon taking office, by April the President had softened his rhetoric, under pressure from the President of Mexico, Enrique Pena Nieto, and Prime Minister Justin Trudeau of Canada.

It also appears that strong lobbying from manufacturers and the agriculture sector, where Nafta is popular, has led to a 'renegotiate not repeal' approach by the White House.

So what changes are on the table?

Tougher enforcement of environmental and labour regulations in Mexico is believed to be at the top of the US agenda - but Jaime Reusche of ratings agency Moody's told NPR the changes will be "relatively modest".

Also on the to-do list will be updating the 23-year-old agreement to cover information technology and tech products and services that have emerged over the past two decades.

In a speech on Monday morning, Canada's foreign affairs minister Chrystia Freeland laid out her country's main goals during in the negotiations, including cutting "red tape" for businesses and allowing for the freer movement of people between the three countries.

She also made clear that there were certain areas in which Canada would not make concessions, with "unease" enveloping the motor industry in particular,"which finds itself on the front lines of this battle over North American trade" says the BBC.

"Canada, the United States and Mexico have a powerful shared interest in reaching a mutually beneficial agreement," Freeland said, adding: "Strong economic fundamentals are a compelling agreement for bolstering what works and improving what can be made better."

So how will it go?

Nelson W Cunningham, who served as trade and foreign policy adviser in the Clinton White House, writes in the Washington Post that there "are reasons to be deeply worried about the outcome", not least because of the President's "unchanging and unyielding views on trade". He should make reducing the trade deficit with Mexico, currently $60b (£47bn), his number one priority, says Cunningham.

Outlining a worst-case scenario, Cunningham said that, if the talks fall apart, "our relations with our closest neighbours would be shattered, supply lines across our continent sundered, and our borders north and south thickened".

North America would enter "a new era riven with trade barriers, tariffs and mutual suspicion", he concluded, "and the winner of all this would be China".