The answer is corn. The question is, what really changed U.S. President Donald Trump's mind about saving the North American Free Trade Agreement and trying to revise it only hours after he said the United States was pulling out of the treaty?
Edward Goldberg, professor at NYU's School of Professional Studies, Center for Global Affairs, explains, "Mexico is the second largest consumer of U.S. corn. Mexico purchases $2.6 billion worth of corn every year.
When Trump decided to pull out of NAFTA, Mexicans started a movement, “Just say ‘No' to American corn.”
That got the attention of U.S. farmers, U.S. agriculture experts, and Midwestern Congressmen. According to Goldberg, “the pressure mounted on the U.S. president. He changed his mind because of political pressure from Congress and their farming constituents.”
Political reality, it is called. He needed their votes on repealing Obamacare.
NAFTA at 23
NAFTA is a trade agreement among three nations, the United States, Canada and Mexico, that has been in effect since Jan. 1, 1994. U.S. trade with NAFTA partners went from less than $3 billion to $1.14 trillion in 2015.
One of the major issues is the annual trade deficit, $63 billion with Mexico and about $11 billion with Canada, according to 2015 figures. This has prompted concerns about lost jobs, especially in the well-paying manufacturing sector.
The 300-member American Apparel & Footwear Association, headed up by Rick Helfenbein, believes NAFTA did not result in loss of jobs and U.S. factories.
“NAFTA didn't cause these problems at all,” said Helfenbein. “Scholars and people in the know will tell you it's actually the ‘ations,’ - automation, innovation, globalization, regulation, that's caused the loss of these factories.”
“April 26, 2017,” Helfenbein continued, “NAFTA became the topic of the day. From the Trump concept of killing NAFTA that morning, followed by phone calls between the U.S. president and his counterparts in Canada and Mexico, Justin Trudeau and Enrique Pena Nieto, by 10:30 in the evening an email was released stating that the patient, NAFTA, was in recovery and negotiations will take place.”
NYU's Goldberg said, “From what I'm hearing it wasn't just Congress pressuring Trump. Every major trade association in the United States was knocking on the White House door.”
NAFTA revision schedule
According to a treaty provision there is a 90-day waiting period before re-negotiations can begin. That probably means nothing will happen before September.
Professor Goldberg says it's been 23 years and counting for NAFTA. Time for an update. The world economy has changed and so have the three countries.
And, he added, “Most of the updates have been worked out a year or two ago during TPP (Trans Pacific Partnership agreement) and they have to do with environmental protection, better labor standards, technology and I-T. Canada and Mexico are part of TPP, the United States has withdrawn from the treaty.”
He predicts, “What is going to happen at NAFTA negotiations, in my mind, is more theater than change.”
Ramon Taylor contributed to this report.