Larry Summers on NAFTA

Harvard University economist Larry Summers (born 1954) writes that the greatest gift the United States could give China is exit from the North American Free Trade Agreement (NAFTA).

I was in Mexico Thursday seeing the Mexican president, foreign minister and finance minister and addressing a convention of bankers. The only subjects anyone is interested is the future of NAFTA and U.S. Mexican relations.

I came to Mexico from Beijing, and so I was able to report that there was no greater strategic gift the United States could give China than to abrogate NAFTA and rupture the North American community.

In narrow commercial terms right now, Mexican goods enter the United States on a preferred basis relative to Asian goods. This preference would disappear with NAFTA suspension. Furthermore about 70 percent of Mexican exports are of goods that are not finished but are inputs to further U.S. production. Anything that hurts Mexico therefore hurts us in global economic competition with China. ….

Larry Summers, “Why scrapping NAFTA would be Trump’s big gift to China“, Larry Summers Blog, 24 March 2017.

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