Negotiating NAFTA's Future

In Mexico, uncertainty abounds over U.S. President-elect Donald Trump and, in particular, his promises to change NAFTA. Although the next president will have the power to unilaterally pull out of the trade bloc, as he has threatened to do, congressional opposition and legal challenges from private companies may discourage him from doing so. Aside from the political and legal battles that would doubtless ensue, withdrawing from the North American Free Trade Agreement would be economically painful, disrupting business continuity for companies around the world — including those in the United States. Still, Trump has a few options with regard to NAFTA. Instead of suddenly withdrawing from the deal, he could try to renegotiate certain aspects of it. He may even decide to leave NAFTA alone (although that seems unlikely given the emphasis he placed on the agreement during his campaign). Regardless of which path he takes, Trump will not be acting in a vacuum. His decision will likely depend on the cooperation of the U.S. Congress and of the trade agreement's other signatories, Canada and Mexico.