Challenges and Complexities: NAFTA and Major Trade Agreements

What is it about?

Strategic Alliances The Trump Administration not only crowned the first year of its anniversary with record highs on Wall Street but may also have created irreparable damage and shifts in strategic alliances with one of its most trusted and loyal allies – the very much understated African Union. On the 12th January 2018, a week which is set to precede and commemorate the annual Martin Luther King Day celebrations, the United States President is alleged to have made insulting remarks about several nations – with references to such allies as “ shit hole” nations. The President is known to be vocal about his opinions – a characteristic which to a considerable extent, earned him admiration, the position and key to the White House – demonstrating to many supporters during the race to the White House, his reflection of their beliefs and frustrations (which many politicians would not even dare to make publicly known). Even though remarks relating to immigrants, the Mexican border still prove controversial, and even though he escaped the judgment and repercussions that could have been expected during the US Presidential elections, could the President have scored an irreparable “own goal” as a result of the degrading comments made in respect to those nations referred to on the 12th January 2018? The extent of the United States’ growing isolation from the rest of the globe was made all the more evident on the same day when reactions to the President’s decision to decline an invitation to London in February 2018, were made public – as expressed through many Londoners – as well as Europeans. Whilst it is hoped that a state visit in the UK will eventually occur – as well as an extension of an invitation to the Royal wedding, other issues relating to the Paris Global Climate Summit, Iran sanctions, the recent acknowledgement of Jerusalem as the capital city of Israel, are matters which have not gone down too well with the global community. Perhaps the United States will find greater solace with its competitors – China and Russia – who ironically, the African Union is increasingly engaging with. Meanwhile, having recently withdrawn also from the Trans Pacific Partnership, the future of the North American Free Trade Area (NAFTA) Agreement also hangs in balance. Only time will tell whether the widely respected and renowned brands of Coca Cola, CNN – and even its highly respected film industry, will continue to be patronized on the same scale as previously – following the revelations made on the 12th January 2018.

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Why is it important?

The era and dawn of new trade alliances - as well as the forging of new and consolidated economic partnerships, is being witnessed to a greater degree - than has never been seen or presided. Particularly in respect of security and defense alliances. From the historic statement - joint statement signed by President Trump and Kim Jong Un - which although widely criticized for the absence of certain key terms (such as verification of the dismantling of nuclear facilities, the failure to include terms such as "verifiable" and "irreversible"), to the imposition of trade tariffs between formidable trade partners such as the United States and China - repercussions of which are certain and probable to generate consequential impacts of higher prices, rising inflation - as well as impact on real wages, Further questions, such as those related to whether trade imports will be affected - with consequential rise in unemployment, constitute key and fore questions. Trade imports are certain to experience some level of decline as a result of the imposition of higher tariffs - with more expensive products also contributing to less exports being sold - also owed in part to higher wages (for those countries where higher wages are paid).