Trump’s Trade Deal: A Mixed Bag. Will It Help Him Politically?

You probably haven’t paid close attention to the details of the new trade deal with Mexico and Canada, and who can blame you? It is blindingly technical and complex. (And if you are reading this post, you are far more of a policy junkie than most voters.)

That’s Trump’s gamble. He wins on the headlines—he was tough with both the Mexicans and the Canadians, and few people pay attention to the fine print.

What’s in the fine print? Some good stuff and some bad stuff.

For instance, the deal requires wages of at least $16 an hour in the auto industry to qualify for tariff-free treatment, which will keep more jobs in Canada and the U.S. as it pressures Mexico to raise wages. New content provisions also favor domestic auto manufacturing.

It gets rid of the worst “investor-state” provisions that allow corporations make end-runs to special kangaroo courts to challenge health, safety, and environmental regulations as allegedly trade-distorting, though it allows new loopholes. It also permits the U.S. to restrict Mexican trucks that do not meet U.S. safety or environmental standards.

On the negative side, the deal weakens several categories of environmental enforcement. It gives drug companies expanded patent protections that will raise the costs of medicine in all three countries. And it weakens food safety and inspection rules.

For a full cheat sheet on what’s in the deal, check out this summary from Public Citizen.

Bottom line, the deal is slightly better on labor and regulation generally, and notably worse on consumer and environmental provisions. So far, the major unions have withheld any endorsement, as have consumer and environmental groups.

It’s an instructive case of Trump hoping to split the opposition. So far, it hasn’t worked and the deal still needs to be approved by Congress. But it will take a fair amount of public education to prevent Trump from using it as a winner in November.

One big offset: Trump is doing nothing constructive (and much that is destructive) on the far more consequential question of trade relations with China, whose brand of state capitalism keeps taking the American economy to the cleaners.

For now, score Trump and trade as a draw. It’s up to progressives to make sure it’s a loser for him.

By |2018-10-09T18:26:44+00:00October 9th, 2018|Kuttner on TAP|0 Comments

About the Author:

Robert Kuttner is co-founder and co-editor of The American Prospect as well as a Demos Distinguished Senior Fellow. He was a longtime columnist for Business Week, and continues to write columns in the Boston Globe. He co-founded the Economic Policy Institute in Washington and serves on its executive committee.

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