Donald Trump’s trade deal with Mexico is a farce – and a lesson for Brexit

The renegotiated North American Free Trade Agreement is a very similar deal – but now it's called something else. Trump turns out to be a bendable politician just like all the rest

John Rentoul
Tuesday 28 August 2018 13:59 BST
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Donald Trump struggles with speakerphone on call with Mexican president Enrique Nieto

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Louise Thomas

Louise Thomas

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There is nothing on President Trump’s desk in the Oval office apart from two phones, and he cannot even make them work. At his televised announcement of a trade deal with Mexico yesterday, a flunky had to intervene to press the right buttons so that Trump could talk to “Enrique”, the president of Mexico, on speakerphone.

It was symbolic of the shambles that is Donald Trump’s trade policy. He was elected on a promise to renegotiate Nafta, the North American Free Trade Agreement, the deal between the US, Mexico and Canada signed by Bill Clinton 25 years ago. This week’s deal means that he has renegotiated part of it, the US-Mexico part, and has forced Chrystia Freeland, the Canadian foreign minister, to scramble to Washington to try to finalise the Canadian part.

But when Trump told his supporters he would renegotiate Nafta, they did not think he meant he would negotiate a similar deal and call it something else. Yesterday the US president said: “I like to call this deal the United States-Mexico trade agreement; I think it’s an elegant name.” Mainly because it is not “Nafta”.

Being Trump, he was quite open about what he was up to. “I think Nafta has a lot of bad connotations for the United States, because it was a ripoff.” At least, that was what he and the Republican Tea Party tendency told the voters it was, despite all the evidence that it had been good for the US economy.

What is interesting is that all candidates running against incumbents in America condemn free trade and demand protection for American jobs, only to realise once in office that free trade is the best way to defend American jobs. Clinton was against Nafta before he was for it, and now Trump is running away from his campaign rhetoric too.

Yes, he has imposed punitive tariffs on Mexican and Canadian steel and aluminium, but Mexico’s retaliation (putting tariffs on food imports from the US) has hurt a lot of farmers, some of them part of Trump’s voting base. This has forced the Trump administration to rush to design a compensation scheme, which those affected are already complaining is not enough.

Photograph of Trump colouring in the American flag incorrectly goes viral

Trump also said he wanted a “sunset clause” on his I Can’t Believe It’s Not Nafta agreement after five years, but now he has agreed the new deal will last for at least 16 years. In a way, this is reassuring: Trump turns out to be a bendable politician like the rest, rather than a uniquely destructive force.

The whole farce is like a Brexit morality tale: populist politicians tell the people their problems are caused by unfair trade relations with their next-door neighbours, and then have to spend the next few years trying to replicate those very same trade deals.

The parallels between the Nafta negotiations and Brexit are uncanny. One problem with Nafta, from Trump’s point of view, was that its disputes resolution procedures were unfair to the US and infringed its right to decide its own laws. The new Definitely Not Nafta deal keeps those procedures with minor tweaks.

Both sets of talks are up against tight deadlines, which means that many of the difficult questions have been shelved for later while the existing arrangements are allowed to roll over.

The reason Trump has gone ahead with Mexico and without Canada is because talks with the Canadians have stalled for two months after the row over steel tariffs, while Trump has to send the Mexico deal to Congress by Friday this week to have a chance of getting it done by the time Enrique Pena Nieto’s six-year term as Mexican president ends in November.

Meanwhile, the free trade that underpins the prosperity of Americans, Mexicans, Canadians – and Europeans – stumbles on, despite the attempts of populist politicians to wreck it.

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