Despite President-elect Donald Trump’s contempt for NAFTA being a cornerstone of his appeal to working-class voters during the campaign, trade agreement experts warn that actually scrapping the deal will cause much more harm than good to American jobs, Politico reports.
“The slightest hint that things are going to be disrupted could cause capital flight from the U.S.,” said Dan Ikenson, director of the trade policy center at the free-market Cato Institute, explaining that dramatically changing the more than two-decade-old pact could threaten 14 million American jobs that rely on trade with Canada and Mexico. Ikenson said changes would cause uncertainty throughout the North American business community, which has invested billions of dollars in developing ways to produce a myriad of goods using labor from multiple countries.
The incoming administration has already stated that it understands any moves it makes must be carefully done. The Hill reported earlier this month that members of the Trump transition team are trying to ease concerns among corporate leaders that the new administration will trigger trade wars with major trading partners.
Anthony Scaramucci, a senior advisor on the Trump transition team, told business leaders that the president-elect is seeking to make trade deals fairer for American interests, not scrap them.
Business leaders are not even pressuring the incoming administration for a renegotiation of the deal, warning that it might not be worth it if it could risk millions of American jobs which depend on exports to Mexico and Canada, Politico reported.
However, some have said that possible improvements could be made to the deal that could reduce barriers and improve the competitiveness of U.S. manufacturing. Trump has so far stayed vague about what exact changes he thinks would benefit Americans without threatening the overall accord.
Kenneth Smith Ramos, head of Mexico's trade and NAFTA office in Washington, stressed to Politico that Canada and Mexico are the top two export destinations for the United States, taking in more than $500 billion in U.S. goods every year.
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