Will NAFTA be Trumped?

Canadian and U.S. immigration lawyers have been concerned about the future of the NAFTA, a treaty which has been serving as a useful vehicle to facilitate the cross-border admission of foreign workers in North America since 1994. Throughout his campaign for the Presidency of the U.S.A, President Trump announced that he would be withdrawing from the NAFTA, the North American Fair Trade Agreement, an agreement signed by Mexico, the United States, and Canada, allowing for more open commercial trade between the three countries. It became into force in 1994. Trump’s reasoning for withdrawing from NAFTA is that the agreement’s downfalls outweigh its benefits to the United States. However, his decision to Trump NAFTA encompasses many obstacles which will need to be overcome in order to move forward with this plan.

Is It Really that Bad?

President Trump’s main argument in withdrawing from NAFTA lies in the premise that the agreement is hurting the U.S. economy, and that Mexico is receiving the most profit out of this Agreement. When looking at statistics, however, the numbers reveal a much different story. In fact, in 2016, nearly 5 million U.S. jobs were dependent on trade with Mexico. Moreover, the trade agreement has allowed for an increase in U.S. capitalization in Mexico, as the Foreign Business Interests (FBI) increased exponentially, reaching 107.8 billion dollars in 2014; this effect resulted primarily from the availability far more cost-effective labor, which encouraged companies to set up manufacturing processes in Mexico.

These rather positive trade effects are the result of the deeply thought-out strategic techniques which gave rise to the creation and ratification of NAFTA in the first place. The very phrasing of the Agreement, combined to a background of established trade between the countries, was designed to increase levels of trilateral trade. It should come as no surprise, thus, that since NAFTA’s enactment in 1994, Canada and Mexico have become the top trading partners of the U.S. on a global scale.

Following the enactment of NAFTA, trade between Mexico and the U.S. increased substantially. Consider the following numbers:

● 1993: 50 billion
● 2000: 100 Billion
● 2015: 300 Billion!

U.S. companies have greatly benefited from NAFTA. Consider GM and Ford, two of the many companies taking advantage of the trade benefits and affordable labour created by the Treaty. It is said that cars being manufactured and sold in the U.S. sometimes have parts that can go over the border to and from Mexico, back and forth, as many as 30 times, before they reach sales levels.

Althougth most NAFTA repeal or modify discussions has centered around the subject of Trade with Mexico, in reality, Canada’s leading trade partner, in the world, is Canada. The top products imported by the U.S. from Canada are snacks, red meat, vegetable oil, processed foods, vehicles, mineral fuels, natural gas, machinery, and plastics. In 1994, imports to the U.S. from Canada totaled just over $47,000. The U.S. Census Bureau reports that we have reached import totals of $42,000 in the first quarter of 2017 alone.

Can Trump Withdraw From NAFTA?

When first elected, Trump was expected to repeal NAFTA, or at least take a pen and “strikeout” the Mexico references from the Treaty. In the first days of his presidency, Trump withdrew from the Trans-Pacific Partnership (TPP), an economic trade deal earlier signed by Obama, leading many to expect a similar withdrawal from NAFTA: Can the U.S. simply unilaterally withdraw from this effective Agreement through an Exectuive Order signed by Trump?

It is important to recognize that free trade agreements are international treaties which require Congressional Executive sanction. In other words, there needs to be cooperation between the Executive Branch and the Legislative Branch of government, which have int