Trump Clashes With Chamber of Commerce, Businesses Over Proposed NAFTA Changes
Wikipedia/ BotMultichillTBusiness01:28 13.10.2017(updated 01:29 13.10.2017) Get short URL
As a new round of NAFTA talks looms, the US Chamber of Commerce and business leaders announced their vehement opposition to US President Donald Trump’s proposals for re-negotiating the tri-national trade treaty.
The US Chamber of Commerce appears to be in panic mode. On Friday, the lobbying body recognized that Trump’s threat to pull out of the North American Free Trade Agreement was actually quite serious. On Tuesday, the concerned business representatives send the POTUS a letter imploring him to keep the trade deal in place and only slightly modernize the existing agreements.
Considering Trump’s goal since hitting the campaign trail has been to force multinational corporations, which seek to put their production where resources and labor are the cheapest, to return to the homeland, create jobs and pay taxes to the US budget, opposition from business leaders comes as a little surprise.
It is interesting, though, what ruffled their feathers so much.
According to Amarilllo.com, the letter says NAFTA has “created American jobs, boosted economic growth, and strengthened local economies.”
“The deal has been especially good to farmers and ranchers… agricultural exports to Canada and Mexico have quadrupled since the agreement,” the website reads.
According to the chamber, Donald Trump is “sabotaging” NAFTA negotiations by including “poison pills proposals.” For the chamber, falling out of negotiations is a serious concern, but for Trump it nonetheless remains an option.
Those proposals include the adjustments on the so-called “rules of origin” for cars, and a “sunset clause” that would make NAFTA members re-negotiate the treaty every five years; if the participants fail to come an agreement, the deal would automatically nullify.
Currently, NAFTA agreements require that cars manufactured in North America must be mostly made up from parts also produced in North America; the exact minimum acceptable amount of North American parts is now 62.5 percent.
Trump wants that number to be raised to 85 percent, and he wants to add a completely new condition — that North American cars must contain at least 50 percent parts manufactured exclusively in the United States.
Critics of this proposal say that the United States does not have the capacity to produce such an amount of spare parts. For example, Bob Cesca, a director, blogger and political commentator, writes in his blog:
“That’s probably not possible as even Mexican manufacturers import products from overseas… Even if you were arrogant enough to believe the United States should have exclusive control of the majority of the auto parts industry in North America, we don’t have the manufacturing capacity in 2017 to meet those demands.”
Measures like this are likely meant to force the manufacturers to create the necessary capacity as well.
Other critics, such as Daniel Sankey, a financial policy analyst invited to Radio Sputnik’s Loud and Clear, argue that car manufacturers will seek to automate their production lines instead of opening new positions. Therefore, bringing car makers home will not create many jobs. However, the more machinery there is, the higher the demand for maintenance personnel would be.
”Will it bring some jobs? Sure. But it won’t bring sufficient number of jobs to make a dent,” he told hosts Brian Becker and Walter Smolarek.
The point of debate here is whether in the eyes of the White House, some new jobs, however few, are nonetheless worth the costs associated.
Talking to Loud and Clear about the proposed “sunset clause,” Sankey said, “this is the sort of things the business community don’t like. They want stability, they want reliability; if there are uncertain times ahead and they look bad, that’s going to hurt their profitability and going to hurt their investment.”
Other US proposals opposed by Canada, Mexico and US business interests include radical changes to NAFTA’s dispute arbitration systems, changes to intellectual property provisions and new protections for US seasonal produce growers, CNBC reports.
According to Sankey, the people with money are not going to sit idly by and are going to protect their interest with tooth and nail if Trump goes ahead pushing his radical proposals.
“There will be political ramifications. These individuals have a tremendous amount of wealth. They gain support not only from within the US, but also from Mexico and Canada. I can only speculate how they are going to handle it,” Sankey said.