AP FACT CHECK: A close look at Trump’s claims on trade deal
WASHINGTON (AP) — President Donald Trump is hailing a revised North American trade deal as if nothing existed before it.
The pact with Mexico and Canada stands as a “model agreement that changes the trade landscape forever,” he said at a signing ceremony with the other leaders Friday in Buenos Aires, Argentina. But fundamental change happened under the deal’s predecessor, the North American Free Trade Agreement.
The new one brings largely incremental change, with a few significant advances for the auto industry, and it has a new name, the United States-Mexico-Canada Agreement.
Canadian Prime Minister Justin Trudeau was truer to the nature of the deal in his remarks at the signing, saying it “maintains stability,” ″lifts the risk of serious economic uncertainty” and secures the duty-free access to markets achieved under NAFTA.
Likewise, Mexican President Enrique Pena Nieto said NAFTA “transformed” Mexico a quarter century ago so that 70 percent of its economy comes from trade. “Revamping the new trade agreement was aimed to preserve the view of an integrated North America,” he said.
Said TRUMP: “The USMCA is the largest, most significant, modern and balanced trade agreement in history. All of our countries will benefit greatly. It is probably the largest trade deal ever made, also. ”
THE FACTS: It’s not the largest trade deal ever made. It covers the same three countries as before. In contrast, the Uruguay Round of trade negotiations concluded in 1994 created the World Trade Organization and was signed by 123 countries. The Federal Reserve Bank of Boston found the following year that the WTO’s initial membership accounted for more than 90 percent of global economic output.
TRUMP: “I look forward to working with members of Congress and the USMCA partners — and I have to say, it’s been so well reviewed, I don’t expect to have very much of a problem — to ensure the complete implementation of our agreement.”
THE FACTS: That may be too optimistic a read on the chances for congressional ratification of the deal.
It’s true that when the deal was reached, the Senate Democratic leader, Chuck Schumer, praised Trump for making progress. But on Friday he put out a statement saying labor and environmental protections in the agreement “are too weak” and Congress will work to strengthen them. The deal will also need approval of the House, which transfers to Democratic control in January.
TRUMP: “These new provisions will benefit labor, technology and development in each of our nations, leading to much greater growth and opportunity throughout our countries and across North America. In short, this is a model agreement that changes the trade landscape forever.”
He also referred to the pact as a “landmark agreement.”
THE FACTS: Actually, the pact preserves the structure and substance of NAFTA, which was unquestionably a landmark, whether for better or worse.
In one new feature, it requires that 40 percent of cars’ contents eventually be made in countries that pay autoworkers at least $16 an hour — that is, in the United States and Canada and not in Mexico — to qualify for duty-free treatment. It also requires Mexico to pursue an overhaul of labor law to encourage independent unions that will bargain for higher wages and better working conditions for Mexicans.
But Philip Levy, senior fellow at the Chicago Council on Global Affairs and a trade official in Republican President George W. Bush’s White House, says: “President Trump has seriously overhyped this agreement.”
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