A trade accord that can mend North American ties

A replacement for NAFTA has the potential to fix trade problems as well as the torn ties between the US and its two important neighbors, Canada and Mexico.

A car hauler heading for Detroit, Michigan, drives on the road to Ambassador Bridge in Windsor, Ontario, Canada.

A great cloud of uncertainty has been lifted over the massive North American economy.

On Sept. 30, the United States and Canada finally reached a trade agreement that, when joined with a recent US-Mexico pact, will replace the region’s outdated accord from a quarter century ago. The new agreement will do more than simply help the three economies generate more growth (they already trade more than $2 million a minute). It will also allow them to better compete with other global production centers, such as China.

Yet beyond reshaping the region’s contours of competition, the accord should also allow healing to begin from the serious political damage done over the past two years by US insults and criticisms of its two closest economic partners. Positive views of the US in Mexico and Canada have plummeted, jeopardizing relations on a host of security and other noneconomic issues.

Much work still needs to be done to finalize the new agreement, which is called USMCA (think of the song “YMCA”) for each country’s name and which replaces the North American Free Trade Agreement (NAFTA). The three still need to resolve the US decision to impose “national security” tariffs on steel and aluminum from Canada and Mexico, which led those countries to impose retaliatory tariffs on billions of dollars’ worth of US farm and manufactured products.

Yet all three can claim wins. Each showed flexibility by dropping or modifying divisive proposals. Now legislators in each country must ascertain what the pacts might actually yield. Stakeholders from the business, farm, labor, and consumer sectors will offer their perspectives. In the US, the International Trade Commission will also provide its assessment.

At first glance, it looks as if the “modernization” aspects of the agreement are as good as or slightly better than what was in the Trans-Pacific Partnership (TPP), a proposed deal that collapsed after a US withdrawal under President Trump. Many of the changes in USMCA reflect changes in trading and investments since the early 1990s, especially with the rise of internet commerce.

Many parts of the pending treaty deserve careful scrutiny.

For example, unions will be looking at what the government of Mexico has committed to do to improve workers’ rights and how the US can enforce compliance with those commitments. US energy companies and other investors will want to examine how changes will affect their rights in Mexico, where reforms have attracted many billions of dollars in foreign investment. It is also important that the agreement not hinder energy integration across North America, which has brought the continent closer to real energy security than ever in the past 50 years.

From a Mexican perspective, the agreement will allow outgoing President Enrique Peña Nieto to sign the agreement before he leaves office on Dec. 1 and will allow incoming President Andrés Manuel López Obrador to start his six-year term with a fixed framework for economic relations with a northern neighbor that buys 80 percent of its exports. 

For Canada, the agreement similarly provides a stable environment for commerce with the country that buys 75 percent of its exports and hosts massive amounts of Canadian investment. Prime Minister Justin Trudeau will have time to build support for the agreement before he faces national elections in 2019. 

After many months of bitter and often unfounded criticisms from the US, the key actors in this accord need to support this attempt to upgrade and broaden trade relations. North America can and should have a bright future built on a foundation of cooperation.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to A trade accord that can mend North American ties
Read this article in
QR Code to Subscription page
Start your subscription today