As Latest Round Of NAFTA Negotiations Conclude, A Look At The Stakes For Vermont

Jan 29, 2018

Trade negotiators from the United States, Mexico and Canada have wrapped up their sixth round of talks on the North American Free Trade Agreement (NAFTA). The representatives spent the last week in Montréal, renegotiating the free trade deal.

NAFTA originally went into effect in 1994. President Donald Trump has criticized the deal, saying it's resulted in lost jobs in the United States, and since renegotiation talks began last year, there's been a lingering worry that Trump might pull the U.S. out of the agreement.

Birgit Matthiesen is a trade policy director for the Washington, D.C. law firm Arent Fox. She’s based in Burlington, and spent the last week observing the NAFTA talks in Montréal.

Matthiesen says she agrees with most assessments that there's cautious optimism for the deal after the latest negotiations.

"I think that's where we stand right now as we conclude the sixth and very critical round of the NAFTA," she says.

Matthiesen spoke to VPR on Monday. Here are some highlights of the interview:

NAFTA's Impact On Vermont

If NAFTA were to end, Matthiesen argues Vermont businesses that either export or import products from places like Québec and Mexico would feel the pain.

"It would significantly increase the cost of imports and component parts from Québec to Vermont," Matthiesen says. "And more broadly, it will reduce and erode North American competitiveness because the world doesn't stand still and China, the Pacific Rim are aggressively pursuing their own trade policy objectives."

Efforts To Attract Canadian Business To The Green Mountain State

Courting Canadian, specifically Québecois, businesses to expand to Vermont is a priority of Gov. Phil Scott's administration. But does that still make sense, given the uncertainty around NAFTA? Matthiesen says it does. She says states like Vermont have to export.

"To do that, they must expand their own production facilities and production capability, and to do that it requires investment from elsewhere," Matthiesen says. "There is a very strong streak of entrepreneurship in Québec, as there is here in Vermont, and it is that cross-border business partnership that will dictate our future competitiveness right here in Vermont."

NAFTA's Impacts On American Workers

Trump has long criticized NAFTA, and according to a Gallup poll last year, Americans are almost evenly divided on whether they think the trade deal is good or bad for the country.

"The United States should stay in the NAFTA," Matthiesen says, and she pushes back on the idea that trade agreements are to blame for a decline in manufacturing jobs in the United States.

"The trade agreements themselves, including the NAFTA, is a pact that reduces duties and tariffs on products crossing the border to each other's markets. ... Businesses make their decisions on where to locate and where production is undertaken based on the availability of skilled labor and new technologies," Matthiesen says. "And all of these factors combined can contribute to production moving, but it is not just at the feet of trade agreements."

Click the audio player above to hear the full interview with Birgit Matthiesen.