As promised in his campaign, Donald Trump is working to impose a tax on Mexican exports in the first weeks of his presidency.
According to the official website of the Department of Homeland Security, The North American Free Trade Agreement was established in 1994 by Canada, Mexico and the United States. The agreement immediately lifted tariffs on goods produced in the nations and worked to remove barriers to allow goods and services to move among the three countries.
“The sentiment, from Trump at least, is that the manufacturing sector in the U.S. has been especially hurt by jobs moving and industries and factories moving from the U.S. to Mexico,” Randall Waldron, professor of economics and international business at John Brown University, said.
Although he recognizes the validity of the other side of the argument, Waldron said that there would be many immediate ramifications if NAFTA were to be altered.
“Each country has benefited from being part of NAFTA,” he said. “What is forgotten in the conversation sometimes is how much consumers have benefited in the U.S. from our ability to import things cheaply from abroad.”
Kai Togami, professor of International Business, said that Mexico would also suffer greatly if NAFTA were to be altered or removed.
“The Mexican economy exports about 70 to 80 percent of what they manufacture. The biggest country they export to is the United States,” Togami said.
Without the U.S. purchasing its goods, Mexico would not get the economic value from other countries that they are getting from the U.S.
Despite the urgency of the executive powers to make a change in NAFTA policies, Togami said that it is a complex process and change could take several years to take effect.
Waldron also said that if the U.S. were to attempt to leave NAFTA there would be certain legal challenges.
“There will be issues for courts to decide, and congress ultimately can enact laws or alter laws that restrain the president’s executive authority,” said Waldron.
Waldron raised concern of increasing tension with Mexico could translate to negative relations with the country as a whole.
“With rising negative attitudes with Mexico, I am personally concerned that what spills over is a general unwelcomeness, not only of Mexican goods, but of Mexican people,” said Waldron.
Togami had similar concerns regarding relations between the countries. “At the end of the day, it comes down to creating value which benefits both the U.S. and our wonderful neighbors in Mexico, this is more important than quick reactions.”
Togami said that because of our limited frame of reference as humans we don’t always see the way God is working. “God is God regardless, and throughout the course of history he allows things to happen and it is always to the benefit of those who choose to follow him,” he said.
With the controversy surrounding the trade agreement, emphasis is placed on how changing the policy would affect general acceptance and flourishing of global relationships.
“To see us step back in the wrong direction is to be on the wrong side of history,” Waldron said.