Former USTR Believes 50 Percent or Greater Chance US Withdraws From NAFTA in Next Year
Former U.S. Trade Representative Robert Zoellick said Oct. 5 there’s a 50 percent or greater chance that President Donald Trump pulls out of NAFTA within a year or so. Congress should “assert its constitutional power” and delay “self-defeating actions” the U.S. could pursue to make the agreement more protectionist or to withdraw, said Zoellick, who is now non-executive chairman of AllianceBernstein and senior fellow at Harvard's Belfer Center for Science and International Affairs. “This is a message for the business community, the farm community, everybody that cares about this relationship,” Zoellick said during an event at the Atlantic Council. “You have to press” Congress.
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Largely because Trump tends to define success in terms of “applause” and “political realignment” of parts of the American populace, there is a substantial possibility he withdraws the U.S. from NAFTA, Zoellick said. “These impulses are not going to go away,” he said. “So I hope that I’m wrong. I hope that they’ll work something out, but be prepared, and if you’re the U.S. Congress, be prepared to push back on this.” Speaking earlier during the event, Rep. Will Hurd, R-Texas, said he believes Congress can ultimately pass an updated NAFTA, which will “be stronger and better than it is today.” But it will be “really uncomfortable” to go through the process as “a lot of people are going to get scared and nervous before we get there,” Hurd added.
One of Zoellick’s major objections to the course of current NAFTA negotiations is the administration’s focus on bilateral trade deficits, and he said senior U.S. trade officials view those deficits as “negative net income.” To Trump, trade deficits mean “losing, and you know what he thinks about losing,” Zoellick said. “The problem with this core belief is it’s economic nonsense. You will not find an economist … maybe [White House National Trade Council Director] Peter Navarro, but you will not find an economist that believes that bilateral trade deficits tell you much of anything.” The White House and the Office of the U.S. Trade Representative didn’t immediately comment.