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Apr.4,2016

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GOVERNMENT WATCH INTERNATIONAL | WASHINGTON | CUSTOMS | SECURITY | REGULATION www.joc.com THE JOURNAL OF COMMERCE 33 By Reynolds Hutchins IT WILL BE nearly impossible for U.S. presi- dential hopeful Donald Trump to pursue many of the cornerstones of his trade plat- form, including his now-infamous wall and severe tariffs on Mexico imports, according to U.S.-Mexico cross-border trade experts. Such moves would require Trump, whose business has benefited from out- sourcing production to Mexico, to scrap the North American Free Trade Agreement, ending the pact with Canada as well. More- over, the Republican Party frontrunner's protectionist rhetoric only strains trade beneficial to both countries, experts said at a March 16 Brookings Institution panel in Washington. Although Mexico is the second-largest U.S. export market and third-largest overall trading partner, U.S.-Mexico trade declined year-over-year in 2015, the first time since the Great Recession, according to data from the U.S. Census Bureau. U.S. imports from Mexico held steady last year, growing from $294.1 billion to $294.7 billion. Exports, however, declined some $3.8 billion. It's a drop that has less to do with NAFTA and more to do with depressed energy prices and a historically strong U.S. dollar. "NAFTA is a treaty. It's been ratified. Trump, even if he were elected, is bound by the laws of the United States. A treaty is the supreme law of the land," said Michael Camunez, president and CEO of consulting firm MannattJones Global Strategies. Trump has said he would break or renegotiate NAFTA and institute tariffs on imports to discourage outsourcing U.S. manufacturing. It's a move that could restore the whole lot of tariffs that NAFTA removed between the U.S., Canada and Mexico more than 20 years ago. But members of the the Brookings Institution panel said the candi- date's promises are "as loose as his lips" — in the words of former Mexican ambassador to the U.S. Arturo Sarukhan. " We'd do well to take to heart as Americans just how deeply offensive that rhetoric is. The fact that it's even out there is insane," said Camunez, who served as a special assistant and counsel to the Obama administration and was key to forging the U.S.-Mexico High Level Economic Dialogue in 2013 during his tenure at the Interna- tional Trade Administration. While announcing his candidacy last June, Trump called for a 35 percent tariff on Mexican automobile imports. Experts, however, have questioned whether the executive office has the unilateral power to repeal NAFTA. "He could choose, I suppose, to abrogate that treaty, but whether he has legal authority to do so is a different matter," Camunez said. Doing so wouldn't just hurt North Ameri- can trade, according to Chappel Lawson, an associate professor of political science at MIT. "Tariffs would shred NAFTA up to the detriment of the United States and destruc- tion of millions of jobs that depend on this cross-border trade," said Lawson, who served as executive director and senior adviser to the commissioner of U.S. Customs and Border Protection from 2009 through 2011. Camunez, however, is confident it will never come to that. "I don't believe there will be unilateral tariffs," he said. "I don't believe there will be a trade war. I don't believe there is any political constituency in the United States, in Congress or otherwise to support it, notwithstanding the campaign rhetoric." Camunez said he's come to that conclu- sion, in part, because he doesn't honestly believe Trump even supports his own policy platform. "This is a guy who is hypocritically manufacturing in Mexico and taking advan- tage of NAFTA just as he is criticizing it," he pointed out. In 2014, Trump signed a deal to produce his own clothing line with Phillips-Van Heu- sen, which manufactures apparel in factories in 85 countries, including Mexico. PVH, which is also behind other name brands such as Calvin Klein and Tommy Hilfiger, has since said it is "in the process of winding down" that licensing agreement after Trump announced his candidacy last year. But, more dangerous to U.S.-Mexico cross-border trade is Trump's tone and the TRUMPING TRUMP ON MEXICO The controversial presidential candidate would be hard-pressed to build border wall, impose import tariffs Source: U.S. Census Bureau, Foreign Trade Division, www.census.gov U.S.-MEXICO TRADE n In billions of dollars $100 $150 $200 $250 $300 U.S. Imports U.S. Exports '15 '14 '13 '12 '11 '10 '09 '08 '07 '06 ■ U.S. Imports ■ U.S. Exports "NAFTA is a treaty. It's been ratified. Trump, even if he were elected, is bound by the laws of the United States."

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