Former U.S. Trade Representative Weighs In On Current Talks With Canada
AILSA CHANG, HOST:
For a little more insight now on the negotiations around NAFTA, we turn to someone who was part of the original negotiations. Carla Hills was U.S. trade representative under President George H.W. Bush and his primary negotiator on NAFTA. Welcome.
CARLA HILLS: Thank you.
CHANG: So one thing that's gotten lost a bit in all of this back-and-forth this week is the question, why was NAFTA created in the first place? Help us understand that question.
HILLS: Well, the president wanted to link our economies throughout North America, and by doing so would create a $19 trillion market, 490 million consumers. But he also had the political view that if Mexico were bound by clear rules, that President Salinas would be more apt to be able to incorporate democratic principles and values. And that in fact occurred so that the trilateral partnership has become very close in - over the past 25 years.
CHANG: Well, President Trump would disagree with you. He has called NAFTA a disaster, maybe, quote...
CHANG: ..."The worst trade deal ever." Were there any aspects of this deal that you regret, that you think are worth revisiting?
HILLS: What I think is that the agreement, by being 25 years old, needs to be updated. I think it's a very good agreement. But when we sat down at the table, we didn't have cellphones. We didn't have digital trade. There were so many things that we didn't have...
HILLS: ...That it is time to upgrade.
CHANG: Well, let's talk about some ways the countries are trying to upgrade this agreement. So the tentative deal between U.S. and Mexico right now calls for more vehicles to be built by workers making $16 an hour or more. And it also calls for a higher percentage of car parts to be made in North America. Do you think these are actual improvements to the agreement you helped draft 25 years ago?
HILLS: It's going to be tough for some of the companies to deal with more complex rules of origin. But if they can assimilate it, we can handle it. What you want to do particularly for Americans is - 90 percent of our exporters not in terms of value but in terms of numbers are small and medium-sized businesses. And when we make more complex our trade rules, we actually put a burden on them and reduce their opportunities.
CHANG: At the same time, do you think these proposed changes would actually result in more jobs for American factory workers?
HILLS: Well, we'll see. The proof is in the pudding, as they say. But let's not lose any jobs. If we can keep our supply chains synchronized from Canada, United States and Mexico - keep in mind that Canada is our largest export destination. Mexico is our second-largest export destination. One third of our total global trade is with our two neighbors. And trade not only is an economic benefit, but it is a strategic and security benefit. We work very closely and share intelligence with our two neighbors. We want to keep them friends. Our language and our way we handle our negotiations - to keep that in mind.
CHANG: Well, let's talk about the negotiations between the U.S. and Canada. Do you think that the fact that the U.S. and Mexico have already reached at least a tentative deal - does that erode Canada's leverage in these talks right now?
HILLS: It's not eroding leverage in the sense that we win and they lose. What we have to do is to find win-win situations because if Canada were to fail, if they were to have an economic disaster, we would feel that very, very significantly and not only in terms of the auto trade that we have but also agriculture and chemicals and machinery and a host of other things. So we want Canada to be really vibrant in terms of its economy and work with us to that end.
CHANG: Carla Hills was the lead U.S. negotiator on the original North American Free Trade Agreement. Thank you very much for joining us.
HILLS: Pleasure - thank you.
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