In today’s raucous political environment, perhaps the best outcome for the American economy is no progress in trade talks.
That has already led to intense mutual exasperation among trade negotiators working on updating NAFTA, the treaty that ought to be called the North American Co-Prosperity Sphere, because that is what it has delivered since 1994.
President Donald Trump has made highhanded demands for treaty revisions that our neighbors Canada and Mexico balk at.
"We have seen no indication that our partners are willing to make any changes that will result in a rebalancing and a reduction in these huge trade deficits," said Robert Lighthizer, Trump’s hard-line U.S. trade representative.
Canadian Foreign Minister Chrystia Freeland countered that America's "unconventional" proposals would "turn back the clock" and warned against a "winner-take-all mindset.”
What a big, happy North American family this is.
All that frustration is hard on the negotiators, but leaving NAFTA as-is may not be the worse outcome. Worst-case scenario is that the Trump administration might decide on a unilateral breakdown, and the latter word is what will happen to the economy.
What is a more constructive approach?
One set of ideas, including an energy discussion that is potentially of value to Louisiana, is put forward by conservative statesman George P. Shultz and Pedro Aspe, the former secretary of finance for Mexico.
They propose to modernize the accord. Writing in The New York Times, the two noted that the digital economy hardly existed in 1993, and “now it is a big part of the global economy and has to be incorporated into NAFTA.”
They also suggest new reforms on treatment of state-owned enterprises, to reduce government subsidies in the private marketplace, and also to crack down on anti-competitive laws in all three countries.
But another idea is one that ought to be on the radar in Louisiana.
“North American countries should be working toward greater integration in energy and national security. When NAFTA was first negotiated, the energy sector was excluded because Mexico’s oil, gas and electricity industries were controlled by the state,” the authors said. “But in recent years, Mexico opened up the sector to competition and foreign investment. The three countries should push toward an integrated North American energy market; that will favor the energy independence and national security of the region.”
Indeed it might, and this would be the kind of update — like that involving the digital marketplace — that could make NAFTA into a success story for another generation.
While it is no fault of the New York-born president of the United States that he might not b…