Sep 24, 2018

What's next: Trump's NAFTA dilemma

Photo: Saul Loeb/AFP/Getty Images

Trade watchers call Sept. 30 the "AMLO deadline" for President Trump's efforts to renegotiate the North American Free Trade Agreement.

The big picture: If the Trump administration can't strike a deal with Canada and Mexico by next Sunday — and the Canadians are showing few signs they'll comply with Trump's demands — it means Mexico's incoming leftist leader Andres Manuel Lopez Obrador (AMLO) would have to sign the final deal.

  • Everyone involved has been trying to avoid that scenario. AMLO has campaigned on far more aggressive changes to NAFTA than have been agreed to by Trump and current Mexican President Enrique Peña Nieto.
  • It's an image issue; AMLO and his team don't want his face tied to the new NAFTA, so by Pena Nieto signing the deal, he gives the new leftist leader political room to claim the new deal was a "fait accompli."

Assuming Canada doesn't cave, Trump has two options on the 30th:

  1. Delay the release of the trilateral deal, which would be a concession that AMLO has to be the one to sign the deal.
  2. Publish the text of a U.S.-Mexico only agreement. That would raise all sorts of questions, including how to get such a deal through a very skeptical Congress and how these amazing new automobile rules of origin would work without Canada.

Go deeper: To understand the fraught state of the NAFTA negotiations, read Phil Levy's latest for Forbes. "It really means," writes Levy, "that the odds of a revised NAFTA being implemented anytime soon just went from slim to slightly slimmer."

Go deeper

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 5,923,432— Total deaths: 364,836 — Total recoveries — 2,493,434Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 1,745,930 — Total deaths: 102,808 — Total recoveries: 406,446 — Total tested: 16,099,515Map.
  3. Public health: Hydroxychloroquine prescription fills exploded in March —How the U.S. might distribute a vaccine.
  4. 2020: North Carolina asks RNC if convention will honor Trump's wish for no masks or social distancing.
  5. Business: Fed chair Powell says coronavirus is "great increaser" of income inequality.
  6. 1 sports thing: NCAA outlines plan to get athletes back to campus.