Pulling the U.S. out NAFTA and reinstating tariffs on Mexican and Canadian goods could lead to high costs for U.S. exports, said Washington D.C.-based lawyer Edward Farrell. Farrell, who said Trump could reinstate the tariffs that were eliminated under NAFTA via proclamation, told Agri-Pulse, “He could raise the duties on day one. He doesn’t need to withdraw from NAFTA in order to raise the duties. Under U.S. law, he’s got the proclamation authority to do so.”
Canada has expressed a willingness to discuss renegotiating NAFTA, but Mexico has been less receptive to the idea, reports Agri-Pulse. "NAFTA, which was ratified by Congress in 1993 and fully implemented by 2008, has resulted in massive increases in trade between the countries, sharply boosting U.S. exports of corn, beef, pork, rice, high fructose corn syrup, dairy and other commodities. Most trade tariffs and other barriers were either lifted immediately or phased out over time."
"In 1994, at the start of NAFTA, the U.S. exported $4.6 billion worth of farm commodities just to Mexico, according to U.S. Department of Agriculture data," reports Agri-Pulse. "That total had nearly quadrupled to $18 billion in 2015. The U.S. shipped roughly $341 million worth of corn to Mexico in 1994, but the figure had jumped to about $2.3 billion in 2015."
Farrell said, "as deep as the concern is over renegotiating the agreement, a complete withdrawal would be even more disruptive, possibly leading to a dangerous escalation," reports Agri-Pulse. He told Agri-Pulse, “Whenever you start a trade war, it’s not that the other guy doesn’t have guns too. Clearly the U.S. is the biggest economic power, but these are major trading partners.”
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