Given all the rhetorical arrows President Donald Trump sent Mexico's way during his 2016 presidential campaign, it must come as some surprise that the nation's southern neighbor is the one now seeing eye to eye with him on issues of regional free trade.
Trump announced this week a "tentative" trade agreement with Mexico. Based on principles only, its details are still sketchy and subject to revision. But the most noteworthy fact about it pertains to the strategy with which this agreement has been created. Trump and the Mexican negotiators excluded Canada, an economy and Anglophone culture joined almost seamlessly to the U.S., from the talks that led up to this breakthrough.
Based on initial reports, it is certain that provisions dealing with copyrights and automobile parts will make certain special interests more or less happy. And the idea that a trade agreement should set a minimum wage rate, as this one does at $16 per hour for at least a certain percentage of automakers, is not something conservatives will be too happy to see.
But these nickel-and-dime details (to which a full free-trade framework would be much preferable) mean a lot less than simply keeping a deal in place, keeping open the free flow of goods to and from Mexico moving, protecting American investments there and planning for ever-growing future trade between the two nations.
And as for Canada, immense pressure now falls upon Prime Minister Justin Trudeau to avoid being left out. This was surely Trump's intention, and it's an unusual stroke of genius in terms of his trade policy. There are many unreasonable and protectionist trade policies that Canada can now be forced to abandon if it wants to join the rest of North America.
The total volume of annual trade between the U.S. and Mexico is just slightly less than that between the U.S. and Canada, it is true. However, that won't last long. The volume of trade with Mexico has grown much faster — up 61 percent between 2007 and 2017, compared to only 3 percent with Canada over the same period. And trade with Mexico will continue to grow much faster in coming years, given its much larger population and its rapid development from a Third- into a First-World economy.
The biggest business opportunities, in the future, will flow across our Southern border, beginning with the explosive market in U.S. natural gas. Mexico is already the largest foreign consumer of U.S. gas, with exports increasing nearly fivefold since 2010. American companies continue to invest in pipelines south of the border to increase that flow, which will become larger and larger as the Mexican consumer gains more buying power.
Mexico is also the largest market for Wisconsin cheese, as Sen. Ron Johnson, R-Wis., pointed out Tuesday.
Trump has often claimed he supports trade deals, just not "stupid" ones. Despite our own well-documented skepticism about this distinction, Trump will deserve a lot of credit if he can get free trade talks back on track and finalize a deal that includes Canada. It would be a fantastic jumping-off point for future agreements with the United Kingdom, the European Union and even perhaps China.
The U.S. economy is finally growing again and creating jobs. It is now primed for a new era of agricultural and energy exports, if Trump can only avoid maiming it through misguided and harsh trade measures that wound all sides.
His deal with Mexico is a good lesson that playing nice with allies and trading partners is the best way to put America first.
REPRINTED FROM THE COLORADO SPRINGS GAZETTE
RELEASE: FRIDAY, AUGUST 31, 2018
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