Canadian Foreign Minister Chrystia Freeland and her Mexican counterpart Luis Videgaray attend a press conference about NAFTA in Mexico City on May 23. | Alfredo Estrella/AFP/Getty Images 5 big questions about the NAFTA talks

One of President Donald Trump's core campaign promises is about to be tested as talks with Canada and Mexico on NAFTA open Wednesday.

Trump’s negotiators will be tasked with transforming the 25-year-old agreement that he has called "the worst trade deal" in history into one that he can trumpet as "saving and creating jobs." At the same time, Trump will have to please constituencies who are both for and against lifting trade barriers.


Talks are scheduled to continue until Sunday, but this week is just the beginning of a drawn-out process. Negotiators from the three countries will be meeting over multiple rounds in the coming months.

But a long list of U.S. demands could make it difficult to wrap up a deal quickly. Here’s a look at some of the looming questions as the three countries get down to business:

Will the revised NAFTA deal bring back manufacturing jobs?

The United States had 16.8 million people employed in manufacturing in January 1994, when NAFTA went into effect. That increased to 17.4 million over the first five years of the pact. The number of jobs started to fall sharply in the early 2000s and slumped to 11.6 million by January 2010 — a decade marked by China’s entry into the WTO; increased factory automation and efficiency; and the 2007-09 financial crisis and recession.

Since then, manufacturing employment has been gradually rising, currently totaling 12.4 million. But if Trump is looking for the NAFTA renegotiation to bring U.S. manufacturing employment back to the mid-1990s level of 16 to 17 million, he may disappointed.

The U.S. International Trade Commission estimated the much more extensive Trans-Pacific Partnership agreement negotiated by the Obama administration would have only generated 128,000 additional jobs by 2032. That pact, which Trump abandoned on his third day in office, included both Canada and Mexico, as well as nine other countries.

Still, in any given year 4 million Americans lose their jobs involuntarily. A report by the Peterson Institute says that only 5 percent of those losses can be attributed to trade with Mexico. But "based on the increase in U.S. exports to Mexico, about 188,000 new U.S. jobs were supported each year by additional sales to Mexico," the report said, adding that those export-related jobs "pay better."

Can Trump reduce the trade deficit?

Like no other president in recent history, Trump is obsessed with reducing the U.S. trade deficit. He is unpersuaded by arguments that the deficit is more the result of macroeconomic factors, like the low U.S. savings and high consumption rates, than trade policy.

Reflecting that bias, the Office of the U.S. Trade Representative put “Improve the U.S. trade balance and reduce the trade deficit with the NAFTA countries” as the first item in its list of more than 100 NAFTA negotiating objectives. However, it also wants to maintain existing duty-free access between the three countries in both the agricultural and manufactured sector.

That raises questions about how Trump can actually reduce the $63.2 billion trade deficit with Mexico and $11 billion with Canada — short of somehow ordering those countries to export less to the United States or requiring them to import more U.S. products. One option could be "managed" trade arrangements in certain sectors. These would be similar to the semi-conductor and auto deals the United States struck with Japan in 1980s, which set limits on imports of those products.

Will Trump keep threatening to withdraw?

During last year’s campaign, Trump promised that he would renegotiate NAFTA or withdraw under Article 2205 of the pact, which allows any of three countries to leave with just six months' notice. Trump appeared to be on verge of invoking Article 2205 in April before being pulled back by his advisers. But since then, Trump has continued to warn that he will withdraw from the pact, unless he gets what he considers a good deal.

It will be harder for Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau to negotiate with United States if Trump is repeatedly bullying them. Even if Trump’s threat is only a bluff, it could be counterproductive to getting a deal all three leaders can support.

Can Trump get a “win” on NAFTA without Canada and Mexico losing?

So far Trump has not been able to deliver on many of his campaign promises, putting pressure on U.S. negotiators to deliver a victory in the NAFTA talks. But in trade negotiations, all countries have to see a win for themselves in order to strike a deal.

That means Canada and Mexico are unlikely to agree to changes that will put them in a worse position than they would be in if no deal is reached. Failing to strike a deal would renew the prospect of Trump withdrawing from the pact, an action that could leave all three countries worse off in the short-term as tariffs are reimposed and supply chains are disrupted.

Where will Trump get the votes in Congress to win approval of the revised deal?

Even if the United States scales back its ambitions so negotiators can reach a deal by Christmas, it would be difficult to get to a vote in Congress before the November 2018 midterm elections. That’s because trade legislation requires the White House to give Congress at least 90 days' notice before signing a new trade agreement. It then gives the U.S. International Trade Commission another 105 days from the date of signing to conduct an economic analysis.

It takes 218 votes to win approval of a trade deal in the House and 51 in the Senate. Typically, Republicans provide most of the support for trade agreements.

But Trump's trade views and policies are closer to those of Democrats who have supported labor and environmental groups that have been against previous free-trade pacts. Trump may move to the left by making Mexico's access to the U.S. market dependent on the nation adopting tough reforms to their labor regime or by weakening protections for companies who invest in Mexico's economy, to name just two possibilities. That could help him pick up Democratic votes but he could possibly lose as many or more on the Republican side.

There's no clear sense of how the administration plans to get majorities in both chambers to approve, said Scott Miller, a trade policy expert at the Center for Strategic and International Studies. One Democratic aide said he had asked legislative affairs officials at USTR whether the Trump administration would relying be "the usual group of members" to pass the agreement, or would try to get support from "the people who vote no" on trade agreements.

"They didn't know at the time," the aide said.



CORRECTION: Due to an editing error, an earlier version of this story’s photo caption gave the wrong title for Chrystia Freeland. She is the Canadian foreign minister. The caption has been updated.