Trump’s NAFTA renegotiation

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That is the topic of my latest Bloomberg column, the deal will be “good enough,” but the method costly.  Here is one excerpt:

At what price? Canadians and Canadian politicians now feel slighted, and it will be harder for Canada to support U.S. initiatives, especially those led by Trump, in the future. It may be a long time before Canada feels like an even vaguely equal partner again. In the meantime, the U.S. and Canada have ongoing dealings and negotiations concerning water rights, border and migration issues, intelligence sharing, terror prevention, and presenting a (relatively) united front against other foreign powers, including Russia in the Arctic. The marginal gains in trade just don’t seem worth the deterioration in the relationship.

And should Mexico really feel elevated by getting the first crack at the deal? Surely it must know that it might not be the favored party the next time around.

Do read the whole thing.  The best extraction of rent policy, of course, is simply to let Canada keep its gains from trade right now, but later demand larger concessions when it comes to Arctic policy, which will really matter.  That’s assuming nationalism, of course, as a kind of second best rejoinder.  I am more comfortable with the alternative position that the citizens in the other NAFTA member countries count for just as much as Americans.

The post Trump’s NAFTA renegotiation appeared first on Marginal REVOLUTION.

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