NAFTA isn’t actually a ‘disaster,’ but getting rid of it would be

“NAFTA is the worst trade deal maybe ever signed anywhere, but certainly ever signed in this country.”

“NAFTA, signed by Bill Clinton, has been a total disaster for the United States.”

“NAFTA was signed by Bill Clinton. NAFTA has been a catastrophe, an absolute catastrophe for our country.”

Those were strong words by then-candidate, and now president, Donald Trump.

However, as the dust settles and governing begins, America should remember that Canada and Mexico are two of our most important trading partners and, quite frankly, any disruption to that characterization does more harm than good.

Of course, it’s easy for candidates to be critical of an outsized trade deal, simply because they have nothing to lose. However, trade trashing is a dangerous game, and if NAFTA collapses, we would all end up worse off.

During the last election cycle, Team Trump members just may have been chowing down on corn tortillas when they decided that NAFTA should become the lightning rod for job loss and economic malaise in America.

However, in the clear light of day, is it true?

Is NAFTA dragging America down, or do we still hear the thumping of accelerated campaign music designed to inflame and antagonize?

{mosads}Eventually, all that negative NAFTA chatter takes a toll. Last year, America exported $2.5 billion dollars of corn to Mexico, and the Mexicans are thinking about just saying “no” to U.S. corn. In fact, your next Mexican taco might be constructed from a corn-based tortilla whose origin may be Brazil or Argentina.

That action alone should generate a lot of gastric excitement for politicians working on the NAFTA issue as they run for election in the corn states of Iowa, Nebraska or Illinois — especially when these states learn that their best corn customer just disappeared.

Seriously, does it makes sense to antagonize our export partners?

But presidential involvement in NAFTA is nothing new, of course. NAFTA was conceived by Ronald Reagan, signed by George H.W. Bush and it passed under Bill Clinton. Over time, George W. Bush made additional improvements and Barack Obama further negotiated changes into the now-defunct Trans-Pacific Partnership.

NAFTA is now 23 years old and renovation becomes a solid idea. However, let’s be very clear, so that everyone truly understands: Shutting down NAFTA would create an economic disaster, and could easily trigger a massive recession. NAFTA is not something that is completely bad, nor is it an entity that could be easily dismantled.

Trump led the chorus that blamed NAFTA for job losses, but frankly the numbers just don’t add up. Scholars and politicians like to point to China or the World Trade Organization as a reason for factories’ demise in the United States; however, it was more likely caused by automation, government over-regulation, lack of skilled workers and unfair international trade practices. Those obstacles played a far more significant role in U.S. plant closures than NAFTA ever did.

Whatever the case, many of the low-tech assembly jobs are gone, and trying to restring the yo-yo isn’t going to help anyone. Today, NAFTA is a fact of life, and there are intricate and complicated supply chains — employing millions of Americans — who all work in the world of NAFTA. These supply chains will implode if they are unraveled by an overzealous administration.

Trump likes to point to the trade deficit with Mexico (which is currently at $63 billion), and to Canada (currently at $11 billion) as proof of the NAFTA “disaster.” However, everyone should also note that Canada is our No. 2 trading partner, and Mexico is No. 3. More important, Canada is our largest export market, and Mexico is our second-largest export market. Several billion dollars of commerce cross these borders, in both directions, every single day.

Truth be told, not all aspects of NAFTA are problematic. For example, in the world of apparel and textiles, we run a trade surplus, and its healthy for U.S. textile mills. Nobody wants the textile/apparel situation to change.

Surely, there are parts of NAFTA that could improve, and opening the discussion will likely make the agreement healthier for all and better for America. We just need to be careful that there is a lid on soup as it heats up on the stove, or some of the good stuff will escape along with the bad.

The 2016 campaign — for most people — is finally over, and it’s time for clear thinking to prevail. We hope for trade tinkering on NAFTA instead of trade trashing. At the end of the day, just saying NAFTA is “bad” doesn’t make it so.

This piece was corrected on April 4, 2017 at 8:26 a.m.

Rick Helfenbein is president and CEO of the American Apparel & Footwear Association and is a strong advocate for a robust U.S. trade agenda and for “Made in USA.” He lectures frequently on the subjects of politics and international trade. Follow him on Twitter @rhelfen.

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