Wall Street Journal (Op-Ed)
By Robert B. Zoellick
April 23, 2017
President Trump interrupted his prepared remarks in Wisconsin last Tuesday to excoriate, yet again, the North American Free Trade Agreement. “We’re going to make some very big changes,” the president pledged, “or we are going to get rid of Nafta once and for all.”
Mr. Trump is playing with fire. Over the past 30 years, presidents of both parties have recognized that the U.S. benefits from working with Mexico and Canada. The more robust North America is, the better it can compete and project power globally. In contrast, Mr. Trump’s approach seems almost designed to help elect an anti-American, pro-Castro populist, Andrés Manuel López Obrador, to the Mexican presidency in 2018.
Mr. Trump’s policy of confrontation pits his hostile nationalism against an American tradition of practical internationalism. Because of historical legacies and national pride, North American integration and cooperation have been built on respect for the sovereignty and independence of Canada, Mexico and the U.S. That differs sharply from the European model of integration, which has sought shared sovereignty.
Consider how Mr. Trump’s own priorities would fare under his Mexican policy, starting with illegal immigration. Today’s illegal immigrants are coming primarily from Central America. Washington should cooperate with Mexico to create a multistage defense. Working with Mexico to strengthen law enforcement, the rule of law, and intelligence would leave both countries better positioned to stop drug traffickers, criminals, human smugglers and terrorists.
Insulting Mexico, on the other hand, will make it impossible for politicians there to work with Yankee gringos. A hostile Mexico can ignore the flow of people northward, while American policies that weaken investment and growth in Mexico simply create more incentives for Mexicans to migrate to the U.S.
Mr. Trump’s great wall would be a waste of money, as conservative Republicans from border states now acknowledge. A combination of fencing, additional border police, electronic surveillance and other intelligence tools would stop illegal immigration more effectively and at a lower cost. Fiscal conservatives should just say no to Mr. Trump’s $20 billion boondoggle.
Secretary of State Rex Tillerson knows that the amendments Mexico’s President Enrique Peña Nieto made to his country’s constitution in 2013 open the door to investment that will expand North American energy security and Mexico’s income. Mr. Tillerson may not be aware, however, that because Nafta’s energy terms refer to Mexico’s constitution, American investors are now protected against a populist reversal of Mexican policy—but only as long as the U.S. remains in Nafta. The integration of North American energy markets helps the U.S. sell gas and electricity to Mexico while lowering costs of production in North America.
Mr. Trump’s policies will actually increase costs and weaken the global competitiveness of the U.S. auto sector, his favorite subject for industrial policy. Efficient manufacturing relies on integrated supply chains that crisscross borders. U.S. producers seeking to compete with Asian and European manufacturers now transfer components across North American borders up to 14 times in the process of completing final goods. More than 30% of Mexico’s exports to the U.S. contribute to the integrated auto sector.
Mr. Trump’s protectionist economists have questioned the data on U.S. exports. Yet when the Manufacturers Alliance for Productivity and Innovation recalculated trade statistics to count only the value added by each country, the U.S. had a surplus in manufactured goods with Mexico and Canada.
If Mr. Trump blocks Mexico’s exports, Mexico will strike back, hurting other parts of the U.S. economy. American farmers, already struggling with low prices, could forfeit sales of soybeans, corn and fruit. Poorer Mexicans will consume less, so U.S. sales will drop. American exporters of services, a source of competitive advantage and surplus, could suffer. Six million U.S. jobs depend on exports to Mexico, with workers in Texas, Michigan, Arizona and Louisiana particularly vulnerable to self-defeating economic nationalism.
Mr. Trump will also discover that the U.S. needs friends. When I first started working with Mexico in the 1980s, I could usually guess Mexico’s foreign policy by putting a minus sign in front of any U.S. position. The old one-party state of the PRI, which ruled for more than 60 years, placated leftist intellectuals by posting them to the Ministry of External Affairs, where they were free to indulge in anti-American policies.
But when I became the U.S. trade representative in 2001, my closest partners in opening markets were Mexican and Canadian counterparts. Mexico’s central bankers and economic officials became natural allies as macroeconomic policies converged. Until recently, Europeans, Asians and even other Latin Americans assumed that the three North American countries would be aligned on most foreign policies. The Mexican public’s attitude toward the U.S. had shifted from sullen resentment to admiration and friendship.
Looking to the future, the alliance of the three North American democracies—being energy self-sufficient with integrated infrastructure and efficient and secure borders—could offer the U.S. a resilient and powerful base from which to face global challenges. Defense Secretary Jim Mattis and Homeland Security Secretary John Kelly should brief the president on the high number of Mexican-Americans in the U.S. Marine Corps.
When White House Chief of Staff Reince Priebus was chairman of the Republican National Committee, he concluded that the GOP needed to reach out to Mexican-Americans and other Hispanics. Insults and attacks on citizens’ home countries are not a winning formula for the future.
William Seward, Lincoln’s secretary of state and the man with the vision to purchase Alaska, wrote in 1853 that someday Mexico, Canada and the U.S. would create a North American union, but only after a long process and solely through free choice. Seward fought for America’s national union while also promoting an internationalist vision. Vice President Mike Pence and members of the cabinet have tried to reassure allies in Europe and Asia that a nationalist America can be internationalist, too. Mr. Trump should apply this correction at home and stop abusing America’s amicable and vital neighbors.
Mr. Zoellick is a former World Bank president, U.S. trade representative and deputy secretary of state.
For more information, go to: www.beverlyhillsimmigrationlaw.com