The Trump administration reached a trade agreement with Canada over the weekend, paving the way for the president to sign a renegotiated agreement with both Canada and Mexico by November.
Called the U.S.-Mexico-Canada Agreement, or USMCA, which President Trump referred to as "the most important" trade deal the administration has made so far, it marks the end of a tumultuous period between the three trade allies. The White House said USMCA will govern $1.2 trillion in trade, making it the largest trade deal in U.S. history.
Scott Lincicome, international trade attorney and scholar at the Cato Institute, joined Fox News Radio's Guy Benson and Marie Harf to discuss the U.S.-Mexico-Canada Agreement, USMCA.
On his tweet saying it is not perfect but not devastating: I think, you know, it's really important to understand where we where we're coming from and there's really I think 3 benchmarks for that. The first is a pre-Trump world with NAFTA 1.0 out there and TPP which was a very an update to NAFTA because Canada and Mexico were in that agreement and that had a bunch of other countries as well like Japan and others. Then you have to think about the second is where we were just a few months ago and that was a very tense period, where it really looks like there might not be anything, in terms of NAFTA and that we could be heading down a rather dark road of no trade agreement at all. And then finally this this kind of half deal we had with less than Mexico. With those in mind then you know our job is try to figure out what does this agreement actually do and then how does that compare to those benchmarks. And I think honestly we're still working through it. But, you know the big picture you know remains as as you mentioned it there are some some bad things in here. There are some good things in here. (1:25)
On if he could choose NAFTA 1.0 or NAFTA 2.0: I'm actually more inclined to stick with the old deal and wait for the next administration to get it right. And the reason for that is a few things. You know, we really are cementing a lot of bad behavior in terms of trade globalization into into kind of a model free trade agreement or I should really say a trade agreement in the future. And these are really technical issues when it comes to things like automotive rules of origin. But, they really set the precedent for not just a more closed, a less modern supply chain manufacturing policy, but they also cement other problems into kind of the DNA of U.S. trade agreements. (5:05)
On Larry Kudlow saying this deal is sending a message to China: I think Larry, you know God bless him, he's doing the best he can up there. But, unfortunately Larry is skipping the last 21 months. The fact is that if you go back to say middle of 2016, give or take, all of the countries you just mentioned were on board with creating a bit of a you know this united front against certain Chinese economic behavior. There was no need to slap national security tariffs on our closest allies to get them on board. The EU has long been in favor of things like WTO reform and going after non-market economy issues through trade remedy laws all this kind of very boring technical stuff. So, there was no need to poke them in the eye to get that. Certainly, Canada and Mexico were ready to modernize and after and they did it through a thing called TPP. So the idea that you needed to kick our closest allies you know in the butt in order to get them to do what they already were we're doing is just nonsensical. (10:40)