Recently, the United States-Mexico-Canada Agreement (USMCA), the successor pact to the impugned North American Free Trade Agreement (NAFTA), passed the U.S. Senate by a vote of 89-10 after making it through the House of Representatives in December 2019. At the same time, the United States and China inked a deal that reduced much of the punitive tariffs each country has erected against the other.
Although heralded by the Trump administration as historic initiatives, California Western’s Professor James Cooper cautions that the deals are no panaceas in an op-ed recently published in the San Diego Union-Tribune.
The USMCA deal is better than no deal, writes Cooper. From the moment he announced his candidacy for president, Trump threatened to exit NAFTA, calling it the “worst trade deal in history.”
And while the new USMCA does update commercial activities—including digital trade—the truth is that most nonpartisan watchdogs maintain that it will take years for U.S. workers and companies to benefit from the new trade pact.
The new arrangement that President Trump signed with Chinese Vice-Premier Liu was merely Phase I of a new deal and undid some of the tariffs that each country has slapped on the other since 2017.
Phase II is sure to be a prolonged and arduous process of negotiation. As the U.S. and China, the first and second-largest economies in the world, will seek to address the real structural and difficult issues that have injured the U.S. for years.
Neither of last week’s trade deals means that the Trump administration is going to be any more multilateral in its approach to the global trading system, nor abandon its “beggar thy neighbor” policies, warns Cooper. A trade war with the European Union is brewing, punitive tariffs on many goods from other countries continue, and the World Trade Organization’s dispute resolution system is failing due to the U.S. stonewalling the appointment of new judges.
Read Professor James Cooper’s complete San Diego Union-Tribune op-ed here.