May 19, 2017
During the presidential campaign, candidate Trump promised to renegotiate the North American Free Trade Agreement. NAFTA is not free trade but crony trade. It’s managed trade where bureaucrats and politicians control the levers of power and provide advantages for themselves. Politicians cannot know what goods and services need to be produced. And politicians are motivated to create trade barriers because they need money for re-election. To the extent that trade barriers were removed and goods and services have been allowed to flow unimpeded, Canadians, Americans, and Mexicans have all benefited. If NAFTA is renegotiated so that it increases trade and does away with the cronyism, the three countries will win. The simplest free trade agreement would be for Canada, Mexico, and the United States to publish a one page document saying that their governments have removed all trade barriers and citizens and companies are allowed to trade goods and services.