AUDIE CORNISH, HOST:
After months of bashing the North American Free Trade Agreement and threatening to pull out of it, President Trump today said he'll begin renegotiating with Canada and Mexico.
(SOUNDBITE OF ARCHIVED RECORDING)
PRESIDENT DONALD TRUMP: So I decided rather than terminating NAFTA, which would be a pretty big, you know, shock to the system, we will renegotiate. Now, if I'm unable to make a fair deal, if I'm able to make a fair deal for the United States, meaning a fair deal for our workers and our companies, I will terminate NAFTA.
CORNISH: That's President Trump speaking at the White House. NPR's John Burnett is in Austin, Texas, where he's been following developments for us. Hey there, John.
JOHN BURNETT, BYLINE: Hey, Audie.
CORNISH: So President Trump has described NAFTA as the worst trade deal the U.S. has ever signed, but he's also now pushing to renegotiate. What do economists say about this?
BURNETT: You know, a lot of trade experts would agree that NAFTA needs a makeover. The economic landscape really has changed. I mean just for instance, the Internet was coming into being when it went into effect, and now you have billions of dollars in e-commerce. An economist at the Woodrow Wilson Institute was telling me that say you have a customer in Mexico City who wants to pay an architect in Chicago to design his house, and so how do you tax that, you know, international arrangement?
CORNISH: Now, as a candidate and as president, Donald Trump has talked tough about how the agreement has been bad for U.S. workers, specifically talking about manufacturing jobs going south. But I understand you got an interview with the economic secretary of Mexico before this most recent dust-up. What did he have to say about this?
BURNETT: So Ildefonso Guajardo is Mexico's point person on NAFTA, and he really knows it well. He's U.S.-educated economist who served as director of the NAFTA office at the Mexican embassy in Washington. He was in Austin schmoozing with the trade officials here in Texas, which is Mexico's biggest trading partner inside the U.S. And he sounded pretty upbeat about retooling the three-nation trade pact. Let's listen.
ILDEFONSO GUAJARDO: Mexico is clearly very realistic about the fact that NAFTA is a 22-year-old agreement that has to be updated. To give you an example, the energy sector - 22 years ago, the U.S.A have shale oil or shale gas. The Mexican energy sector was a state monopoly. Now it's open for private investment.
CORNISH: All right, John, so what are the deal breakers? I mean did the Mexican minister say what might be off the table altogether?
BURNETT: Absolutely. He said Mexico won't go back to the '80s for the imposition of new quotas or tariffs. And he reiterated statements from President Enrique Pena Nieto who said Mexico will not pay for the border wall. That point could poison the new NAFTA talks.
CORNISH: Did you get a sense of how Mexico is essentially feeling about negotiations heading into this with a president so critical?
BURNETT: I gather Mexico's feeling cautious but pretty strong. He says in the last 23 years, U.S.-Mexico trade has increased sevenfold. Many U.S. industries have come to depend on the Mexican market. So Mexico won't be pushed around. Let's listen again to Ildefonso Guajardo.
GUAJARDO: We are the second-largest buyers of U.S. exports. We are the No. 1 buyers of many production in the U.S. from manufacturing to agriculture. So we are willing to improve it. We're willing to renegotiate this agreement as long as it's in the best interest of both countries.
BURNETT: And the secretary pointed out Mexico has free trade agreements with 47 other nations around the world. When he was leaving Austin, he was going to the airport to fly to London where he planned to talk to his counterpart in the U.K. to discuss a free trade agreement with Britain after Brexit.
CORNISH: That's NPR's John Burnett. John, thanks so much.
BURNETT: It's a pleasure, Audie.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.