United
States politicians won’t allow the North American Free Trade
Agreement (NAFTA) to fail, says the author of a report for the C.D.
Howe Institute.
An
end to NAFTA would hit the auto industry and agriculture so hard that
politicians in Congress and the Senate won’t allow it to happen,
says lead author Dan Ciuriak, a former chief economist with the
Department of Foreign Affairs and International Trade.
The
U.S. would lose more than Canada if the negotiations fail and Trump
carries through on his threats to scrap NAFTA.
About
$110 billion is at stake for the three countries.
"This
battle will be fought within the United States, between U.S.
stakeholders, Congress and the White House, not between Canada and
Mexico and the Trump administration," says the study, titled
Nafta Requiem: What if the U.S. walks away?
The
effects on agriculture and autos amount to "poison pills"
that Congress would be unable to swallow, said Ciuriak.
"How
would the Trump administration roll over the agriculture lobby plus
the auto lobby to withdraw from NAFTA?" Mr. Ciuriak asked in an
interview. "I just don't see the politics working for the
administration on that."
Terminating
the agreement would cost Mexico $25-billion in economic welfare, or
the combination of a reduction in wages and income.
The
comparable figure for Canada is $14.5-billion and for the U.S. is
$20-billion.
The
beef, pork, poultry and dairy industries in the United States would
each take hits of about $1-billion in exports.
