These are the trade agreements that could seriously change under Trump

Donald Trump speaks to guests during a campaign stop.
Source: Jeff Swensen/Getty Images
Donald Trump speaks to guests during a campaign stop.
Source: Jeff Swensen/Getty Images

The United States is party to 14 free trade agreements. All of these agreements are threatened by the Trump administration's hostility towards free trade and its mystifying desire to return to the protectionism of the inter-war period. 

Technically, "free trade" means that goods and services traveling between countries party to an FTA are not subject to tariffs. In reality, most FTAs are best described as "freer" trade agreements. There are often specific goods or services subject to modest tariffs. 

Trump has already taken steps to kill the Trans-Pacific Partnership, and the Transatlantic Trade and Investment Partnership is dead on arrival. But what could he do to existing agreements?

A truck pulls into a warehouse at LMS International, in Laredo, Texas.
Source: Eric Gay/AP

The North American Free Trade Agreement

The North American Free Trade Agreement entered into force in 1994. It eliminated most tariffs on trade between the U.S., Canada and Mexico; President Donald Trump is not a fan. 

On the campaign trail, Trump said, "If they do not agree to a renegotiation, then I will submit notice under Article 2205 of the NAFTA agreement that America intends to withdraw from the deal." 

More recently, he has said that he will "tweak" NAFTA. That may not be possible, as Canada's GlobalNews wrote: "Either Trump keeps it closed, tinkering superficially with NAFTA through regulatory changes, or he opens it – and all sorts of issues start spilling out." 

If Trump withdraws from NAFTA, the economic effects would be devastating. The administration's own website reads: "[U]nder NAFTA, U.S. trade with Canada and Mexico have supported over 140,000 small and medium-sized businesses"; "U.S. manufacturing exports to NAFTA have increased 258% and the United States maintains a growing manufacturing trade surplus with Canada and Mexico"; and "The largest factor affecting the trade balance with NAFTA countries is the importation of fossil fuels and their byproducts. If those products are excluded, there is no deficit." 

Look quickly, that page may come down any minute. 

From left: Miriam Sapiro, deputy U.S. trade representative; Hector Dada, El Salvador's minister of economy; Anabel Gonzalez, Costa Rica's minister of foreign trade; and Jose Francisco Zelaya, minister of industry and commerce for Honduras
Source: Luis Romero/AP

The Dominican Republic-Central American Free Trade Agreement

CAFTA-DR entered into force in 2012. It is an agreement between Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, the Dominican Republic and the U.S. Together, the CAFTA-DR area is America's 16th-largest trading partner. The Los Angeles Times reported that Trump "vowed to dismantle" CAFTA-DR. 

As the Jamaica Observer reported, "Government officials and businesses said that the Central America Free Trade Agreement ... is so favorable to the U.S. that it makes no sense to get rid of it." 

Again, according to the administration's own website: "The U.S. goods trade surplus with CAFTA-DR countries was $5 billion in 2015. According to the Department of Commerce, U.S. goods exports to CAFTA-DR supported an estimated 134 thousand jobs in 2014."

Ambassador Susan C. Schwab, U.S. Trade Representative (left, seated) and Kim Hyun-chong, Korean Trade Minister (right, seated) signing the Korea-U.S. Free Trade Agreement.
Source: PABLO MARTINEZ MONSIVAIS/AP

The Korea-United States Free Trade Agreement

The KORUS agreement entered into force in 2012 after years of intense negotiations. While Trump's ire has been primarily focused on NAFTA, KORUS has not escaped his attention. According to the Asia Sentinel, Trump said that KORUS was, "a perfect example of broken promises" and that it "doubled our trade deficit with South Korea and destroyed nearly 100,000 American jobs." 

That's what is called, in political science terms, a "lie." 

While there has been a trade deficit with South Korea, the lead U.S. negotiator of KORUS told World Policy Institute's Kirsi Goldinya, "The fact that the Korean economy has slowed down and, as a result, the level of Korean imports has declined, coupled with the U.S.’s demand for imports — that’s a better explanation for a bilateral deficit.” 

President Clinton and King Abdullah II of Jordan watch the signing of a Free Trade Agreement between the United States and Jordan.
Source: SUSAN A. WALSH/AP

Other bilateral agreements

Despite his constant attacks on the KORUS agreement, Trump might choose to leave the other 11 bilateral FTAs alone. The U.S. has such agreements with Australia, Bahrain, Chile, Colombia, Israel, Jordan, Morocco, Oman, Panama, Peru and Singapore. 

Multiple sources report that Trump prefers bilateral "deals" to multilateral agreements and negotiations. It is now likely that one such agreement may be negotiated with Japan. A new report by Jeffery J. Schott, a senior fellow of the Peterson Institute for International Economics, explained why a bilateral deal is "unlikely to bear fruit." 

In essence: International negotiations are not simple, and trade agreements take years to negotiate. Trump may think that by scrapping multilateral free trade agreements in favor of bilateral agreements, he has a better chance of "winning."

It remains to be seen how Trump will square the lost opportunities for American workers from "making America great again."

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Jonathan Cristol

Dr. Jonathan Cristol is a fellow at the World Policy Institute (www.worldpolicy.org). He is also a senior fellow at the Center for Civic Engagement at Bard College (www.bard.edu), where for many years he was a professor of international affairs and director of Bard's Globalization and International Affairs Program. Dr. Cristol is an independent advisor/expert at Duco, a global affairs, policy, technology, and security consulting firm (www.ducoexperts.com).

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