This Is Your Brain On Nafta

The Mexico deal was the result of a year of excruciating talks. They’re not over

- Josh Wingrove, with Eric Martin and Andrew Mayeda

It was a perfectly Trumpian moment. On the morning of Aug. 27, reporters and top White House officials crowded into the Oval Office to witness the president announce an agreement with Mexico. “Big day for trade, big day for our country, a lot of people thought we’d never get here,” Trump said as he settled in behind his desk. After more than a year of contentious negotiations with Canada and Mexico to redo the North American Free Trade Agreement, Trump finally had a deal—though not quite the one he promised. It included only Mexico, not Canada.

Ever the showman, Trump was eager to make a public display of calling Mexican President Enrique Peña Nieto as TV cameras rolled. He punched a button to get Peña Nieto on speakerphone. “Enrique?” Instead of the Mexican president, there was silence on the other end as cameras snapped away, capturing the awkward moment. “Hellooo?” Nobody was picking up. As aides scrambled to fix the connection, Trump’s TV triumph had become a scene from the HBO comedy Veep.

In a sense, the moment encapsulated the frustrating year of Nafta negotiations that preceded it: slapped together, barely coordinated, and wildly oversold—and at the mercy of a fickle president hungry for a “win.” Although Trump touted the Mexican agreement as one of the largest trade deals ever struck (it’s not), Wall Street analysts were decidedly meh. In a note to clients, Goldman Sachs concluded: “We do not expect the revised terms to have substantial macroeconomic effects in the U.S. if they do take effect.” The skepticism stems from doubt the agreement will be passed by Congress—where many legislators want Canada to be part of it.