"The intellectual backwardness of many of Trump's trade advisors contrasts dramatically with some of the very good advice he's gotten in terms of deregulation," says Roberto Salinas-León, president of the Mexico Business Forum and adjunct scholar at the CATO Institute. "Talking about your second most important trading partner in that [derogatory] vein—that's not the 'art of the deal.' That's just very bad business."
Salinas-León, an expert on trade and monetary policy, says that if Trump ends the North American Free Trade Agreement (NAFTA), it would decimate jobs on both sides of the border.
"Does Indiana depend on jobs because of its trade with Mexico? Does Ohio? Texas? You want to shut down NAFTA? That turns Texas into a Democratic state overnight."
Reason's Nick Gillespie sat down with Salinas-León at Freedom Fest in Las Vegas to discuss NAFTA's economic impact, his heated confrontation with Trump at Freedom Fest 2015, and how the president's anti-Mexico rhetoric propelled leftist presidential candidate Andrés Manuel López Obrador ("a rabid, primitive, vitriolic, populist") to the top of the polls.
Interview by Nick Gillespie. Edited by Alexis Garcia. Camera by Justin Monticello and Meredith Bragg.
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This is a rush transcript. Check all quotes against the audio for accuracy.
Gillespie: Let's talk about NAFTA first and your role in it. Is NAFTA a good thing or a bad thing for Mexico, Canada and the US? It's getting a lot of heat lately.
Salinas-León: In the early 1990s, we thought, "Well, wow! Mexico's already a story of trade liberalization. We're exporting 35 billion dollars a year worth of products and so on." Today that number is 365 billions, so from a trade perspective, and this is a trade agreement, from a trade perspective, I don't think there's any question that NAFTA has been a success in the sale side. And then you go to the purchase side, in other words, imports, and you find that you're also importing a vast amount. Guess where those imports come from? In about 80 percent, the United States.
Gillespie: Yeah, exactly.
Salinas-León: So those in Indiana depend ... I mean, speaking of Mike Pence, does Indiana depend on jobs because of its trade with Mexico? Does Ohio? Texas? You want to shut down NAFTA? That turns Texas into a Democratic state overnight.
Gillespie: Where do you think the animus against NAFTA, particularly in the United States, and I mean, this is something that Donald Trump ran on. It's also something that Bernie Sanders brought up a lot, the idea that somehow free trade agreements suck jobs out of America and they put them in third-world countries, which due to a lot of economic ignorance, often times they're talking about Mexico as a third-world country, as well. Where does the resentment of something like that come from?
Salinas-León: I think that was one of the great lessons of the Trump campaign, the Bernie Sanders campaign. It's not something that discriminates between Republicans and Democrats or between the right or the left or whatever. What you found out is that there is anger because there's displacement. There is job displacement, and that's a very serious concern. But are we going to address it by closing our economies? By building walls? I mean, wasn't another famous Republican the one who said, "Tear down this wall." The same one that said, "We will always keep our doors open in the shiny city on the hill no matter how many walls it may have." I think those principles have to be kept in mind, but also, to be very serious about trying to alleviate the disruption and the displacement that may come in this era of globalization for those that have lost their jobs.