President Donald Trump claimed on November 30 at the G-20 summit in Buenos Aires, Argentina, that the newly revised North American Free Trade Agreement (NAFTA) is the biggest trade deal ever.
Is this new trade pact really as historic as Trump claims?
Presently, the historic significance of this agreement is Trump going off script and changing the name of it to the United States-Mexico-Canada Agreement (USMCA).
“The USMCA is the largest, most significant, modern and balanced trade agreement in history,” Trump said. “All of our countries will benefit greatly. It is probably the largest trade deal ever made, also.”
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This agreement must still win approval in Congress, so this statement is very overzealous considering the insurmountable evidence.
According to Politifact, the new NAFTA is very similar to the first version, which surfaced in 1994. For example, it mirrors its predecessor by covering the same three nations, which are the United States, Canada, and Mexico. Also, USMCA will preserve the structure of NAFTA by eliminating trade barriers between the three countries and increasing economic opportunities.
Nevertheless, there are a few differences in the new version that appear to favor the United States. Contrasting trade experts gave their perspectives on the new additions of this deal.
“Normally, there is some sort of balance worked out. That wasn’t the case this time,”Edward Alden, a senior fellow at the Council on Foreign Relations, told Politifact. “The United States had a huge list of demands, and the Canadians and Mexicans were on the defensive.”
“One thing that is absolutely clear is if you measure the new NAFTA relative to what was already covered in NAFTA, the incremental trade covered is very small,” Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics, said.
Trump’s claim that the new NAFTA is the biggest trade ever is very subjective for a couple of reasons. There have been more sizable trade agreements, and the new provisions outlined in USMCA have come from the Trans-Pacific Partnership (TPP), according to Phil Levy, a senior fellow at the Chicago Council of Global Affairs.
TPP, which was negotiated by the Obama administration, involved the three NAFTA nations in addition to Japan and eight other Pacific Rim countries. Also, other larger trade deals, such as the European Union and the 1994 Uruguay Round, exceeded the amount of trade created under USMCA.
Fact or Fiction?
Trump’s claim that the newly revised NAFTA is the biggest deal ever is simply not true based on the evidence highlighted. While Trump’s claim is subjective, the measures of this trade deal can be easily dissected by concrete facts.
Furthermore, this claim is wrong purely by virtue of the number of trade partners involved in USMCA. There is no way it can be the biggest trade deal ever if this deal doesn’t have the most trade partners ever.
We vote this claim as fiction.