A senior adviser on President-elect Donald Trump’s transition team is soothing the concerns of business heads who fear upheavals in international trade agreements. The official said Trump will “right-size” NAFTA, not throw it out entirely.
The bipartisan organization No Labels hosted a conference with business leaders Monday, where Anthony Scaramucci, a senior Trump transition adviser, spoke on trade generally and the North American Free Trade Agreement (NAFTA) specifically, according to The Hill.
“I don’t think we’re looking to rip up NAFTA as much as we are looking to right-size it and make it fairer,” Scaramucci said, adding that Trump and Mexican President Enrique Pena Nieto have “a great relationship, by the way,” and “talk regularly.”
While campaigning for the presidency, Trump lambasted NAFTA as the worst trade deal of all, even worse than the TPP, the Trans-Pacific Partnership, a hot button issue in 2016, which has its own uncertain future in Congress. Yet another trade deal in the works is the Transatlantic Trade and Investment Partnership, involving the US and the European Union.
Scaramucci’s tone differed, and he hailed NAFTA as a continuation of post-World War II trade deals that provided “economic interdependence [which] has actually reduced conflict around the world.”
However, Trump transition official also remarked, “one of the deleterious side effects of this is that it’s hollowed out the manufacturing base of the United States.”
“I don’t think anybody in the administration is looking for quote-unquote tariffs,” he continued, “but I think they are a cudgel, if you will, to lay out there if we can’t get the trade deals to be right-sided to now benefit the American people.”
However, Trump took to Twitter Sunday to blast US businesses that would relocate their operations outside the country, threatening a 35 percent tariff on re-imported goods.
In attendance for Scaramucci’s talk was John Engler, former Republican governor of Michigan and current president of the Business Roundtable, an association of big business CEOs, who found the NAFTA remarks “very consistent with what they’ve been saying,” according to The Hill. Engler is also on the advisory board of No Labels, which hosted the gathering.
Other industry leaders favorable to NAFTA also sound optimistic about Trump’s approach to reform, in part at least because of how NAFTA is crafted to ensure global cheap labor for multiple nations, not just one in particular.
Eduardo Solis, a former government trade negotiator and current president of the Mexican Automotive Industry Association, told an auto industry gathering last week that “the North American region has to be analyzed vs. the other regions of the world, not Mexico vs. the United States,” according to Crain News Service.
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Jerry Gulke, a farmer and grain futures trader who attends Federal Reserve meetings, told CNBC, “The farm states put Trump over the top,” so, “You could say Trump owes us something.”
The peaceful transition of power away from President Barack Obama will leave Trump with all of his predecessor’s authority, including that of “fast-track” negotiation on trade deals. Congress approved the executive capacity to bypass congressional amendments on trade deals, requiring a simple-majority vote of US senators to pass a deal.
Even under this expanded prerogative to influence trade and despite media characterizations to the contrary, Scaramucci stressed that Trump will not govern as a protectionist.
“I can state categorically that if [Trump] were standing here right now, he’d tell you that he’s a free trader,” he said, The Hill reported.