FOR months President Donald Trump has veered between threatening to terminate the North American Free-Trade Agreement (NAFTA) and merely proposing to bring it “up to date”. On July 17th, in a letter to Congress, the United States trade representative, Robert Lighthizer, made the administration’s intentions clearer. They are closer to revision than destruction, which is a relief for Mexico and Canada, the United States’ NAFTA partners. But alongside conventional-sounding negotiating objectives are flashes of Trumpian aggression and hints that the United States will demand painful changes to the deal.
The stakes are high. A quarter of American trade in goods and services is with Mexico and Canada. The three economies tend to grow or shrink together and have integrated supply chains. Fears that the United States would abandon NAFTA have caused volatility in the markets for the Mexican peso and Canadian dollar, and talk of possible recessions.
Mr Lighthizer’s letter,...Continue reading
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