If Trump kills off Nafta it will be at his own peril – and the peril of America

A little over five years ago a spokesman for Enrique Peña Nieto, who was soon to be elected President of Mexico, leaned across a cafe table and told me what his boss had in mind for relations with America: mimicking Europe’s single market and wiping away the border between them entirely to allow unfettered freedom of movement for goods, services, capital and people.

If ambitious then, such a notion looks laughable today. The new fashion, not just in this hemisphere, is anti-globalisation. The "America First" doctrine of Donald Trump especially makes it so. His signature pledge of last year’s campaign – the construction of thousands of miles of border wall – is still part of his agenda. Meanwhile talks on renegotiating the barrier-busting Nafta treaty between Mexico, the US and Canada have been bogged down in acrimony and pique.

Last week, all three sides admitted the goal of revising the 1994 pact by year’s end is beyond their grasp for the simple reason that the US is making demands the other two countries can’t possibly swallow. The talks will now drag on into next year. While not surprising, this is alarming news. Peña Nieto’s term is almost over. With a new presidential election set for July and a populist candidate of the left, Andrés Manuel López Obrador, known as AMLO, leading all the polls, the time to surrender to American’s trenchant demands will not be then.

That Trump’s posturing on Nafta – he continues to express a willingness to kill it off entirely – could end up propelling a leftist to power in Mexico for the first time in modern memory is an inconvenience he either doesn’t see or doesn’t care about. Even the arguments from a multitude of quarters – including from some of his economic advisors in the White House – that the economic costs could be severe aren’t getting through.

A document reportedly circulated by Peter Navarro, director of the White House Office of Trade and Manufacturing Policy, said declining US manufacturing, which the administration repeatedly links to its unhappiness with Nafta and the US-South Korea trade deal, also now in jeopardy, has led to jumping rates in America of divorce, spousal abuse, drug abuse and murder.

This is the easy language of populist nincompoopism. If Nafta kills unborn babies, Nafta is bad. If Nafta makes husbands beat wives, bad too. If it means an annual trade deficit with Mexico of $60 billion, again, bad. The problems with this approach should be self-evident. First it means you enter negotiations expecting the other parties to accept they will be cast as the losers when it’s all over. It doesn’t work like that; they have political calculations to make too. The linear fixation with surpluses and deficits is equally misleading and unhelpful. There are other considerations. In spite of that deficit, are there overall benefits to the US economy? To national security, even?

Defenders of Nafta insist that scrapping it or even reworking it to America’s liking will cost US jobs and raise prices to US consumers. Especially contentious is a US demand that existing rules on the amount of North American content in cars manufactured in the Nafta zone be raised sharply or they will be subject to border tariffs all over again. A study by the Boston Consulting Group finds that ending Nafta could mean the loss of 50,000 American jobs in the auto-parts industry. Overall, about 14 million American jobs are directly attributable to Nafta trade, according to the US Chamber of Commerce which outright opposes Trump's trade agenda.

Another major sticking point: Robert Lighthizer, the current US trade representative, is demanding a sunset clause in the agreement whereby every five years any of the three parties will be free to pull out if they find it is not working out to their liking. Rather than “Till death do us part” it will be, “Till populist forces do us part”.

It’s bad enough Trump is risking the livelihoods of precisely the blue collar Americans he purports to champion. But he is also turning his back on what has been a central tenet of the Republican Party for decades: open engagement with other nations, including trading with them freely, makes the world a peaceful place. It is a prerequisite for global stability. Trump has a quite different approach: pick fights and relish conflict, even with your closest neighbours.

Listen on the topic to former president George W Bush. His rare foray back into the public glare last Thursday at a forum in New York co-sponsored by his presidential library was widely seen as a veiled attack on Trump. But the more important message was this: the isolationist winds he has harnessed and fanned is taking the country and the world into a newly dangerous place.

“We see a fading confidence in the value of free markets and international trade – forgetting that conflict, instability, and poverty follow in the wake of protectionism,” he warned. "We have seen the return of isolationist sentiments – forgetting that American security is directly threatened by the chaos and despair of distant places, where threats such as terrorism, infectious disease, criminal gangs and drug trafficking tend to emerge.”

Bush acknowledged the resentments of people are real. “They are angry. And, they are frustrated. We must hear them and help them,” he went on. “But we can’t wish globalisation away, any more than we could wish away the agricultural revolution or the industrial revolution.”

In other words, don’t fight it, but fight the negative side-effects that come with it. There is a lot that can be done if you focus on it – try, for instance, requiring Amazon to set up its touted second headquarters not in New York or Houston but somewhere lagging behind and in need of a leg-up. But it’s hard to find that focus if you are too busy blaming abortion rates on a 23-year-old trade deal.