NAFTA’s survival depends on business stepping up to back it

by Jere Sullivan and Hector Faya, opinion contributors - 08/15/17 10:00 AM ET

The upcoming weeks are perhaps the most crucial ever faced in North American trade history and relations. Many initially breathed a sigh of relief following the publication of the U.S. negotiating positions in July, ahead of this week in August, during which the North American Free Trade Agreement (NAFTA) can be formally reexamined by the American, Canadian and Mexican governments. Despite the momentary optimism, the pitfalls in the way of a successful outcome in the negotiations are plentiful.

Most alarming are the threats arising across all borders to dissolve the agreement if discussions prove unsuccessful. While NAFTA remains controversial among certain circles in all three countries because of the seismic shifts it introduced, the agreement helped to create a $5 trillion North American economy with $1.1 million in goods and services being exchanged among the three countries every minute.

{mosads}As the debate enters into high gear, those advocating the positive attributes of NAFTA are at an immediate disadvantage. It’s all too easy to point to the pitfalls of the agreement when a factory decides to leave a particular community as a cost savings measure. And those stoking populist sentiments opposed to the agreement have ready kindling and plentiful examples.

Communicators advocating for a successful update of NAFTA can choose to highlight the positive attributes of NAFTA, but most gains are incremental and invisible to the general public. Gains like enhanced incomes and cheaper consumer prices are hard to sell because they’re less evident in the eyes of the public. Another option would be to “sell fear” by highlighting what may happen if the agreement were to be dissolved. But doing so would open a debate based upon hypothetical scenarios with the opposition, who are already offering their own scenarios.

Instead, advocates should be working to seize the narrative and define the parameters of the debate to achieve an updated agreement that reflects 21st century realities. Taking control of the narrative would set the path to strategic, organized and progressive actions with multiple stakeholders at the federal, state and local levels that could elevate the cost of scrapping the agreement, while defining what “success” and “failure” will look like.

The current discussion about NAFTA is based on a nationalist discourse and an anti-Mexican rhetoric, even though Mexico is the United States’ third-largest trading partner. Every day, both people and businesses conduct millions of exchanges that are enormously beneficial for all three countries.

Also, the present debate does not recognize that pulling back the treaty would reverse the model of integration and cooperation that has expanded diplomatic, educational, intelligence, security and immigration collaboration between the United States, Mexico and Canada to create a dialogue that is fact-driven and informed. This dialogue should seek, for example, to elevate the political cost of using Mexico as a scapegoat, or portraying lumber and dairy “disputes” between these countries as “trade wars.”

In an era defined by the rise of economic nationalism, business and industry in all three countries must begin to step up and take a leadership role to ensure that the agreement survives. Many in the private sector will seek to advance their own agenda during these discussion. First, however, they shouldn’t lose focus that the alternative to a free trade agreement is no agreement, which means higher prices for goods and the loss of many jobs due to added taxes, tariffs and other barriers to trade.

Second, the private sector must be specific with its word choice when describing these talks. Renegotiation implies that every portion of NAFTA is up for discussion. While many in each country would prefer to renegotiate sections that impact them the most, by renegotiating, more barriers to success are placed in front of the delegations.

Rather, the private sector must be clear that it seeks modifications, or even better, a modernization of the treaty. By stressing modernization, governments can understand that the private sector finds the present agreement palatable, albeit requiring updates to reflect our digital economy, which didn’t exist in 1994 when the agreement went into effect, as well as other improvements.

Last, the private sector must be willing to take a leadership role in the public debate. In the present political environment, many politicians will require the air cover that the private sector can provide in conveying to the general public the benefits of NAFTA. Debate must be based on fact and evidence to engage stakeholders effectively and to prevent misinformation. Research and other intellectual property can be placed for public consumption to convey the importance of this trilateral relationship.

Engagement and debate can occur in traditional media and digital platforms, and information can be distributed to employees of firms to highlight how they continue to benefit from this agreement. Business and industry must also not be shy from speaking directly with public sector officials or actively engaging in the consultation process in all three countries, which can be done in concert among peer firms or through industry trade groups.

The world has changed since 1994: it paved the way for the creation of the WTO and other major global trade accomplishments. Any new agreement should strive to reflect this reality. If political leadership is ceding the public agenda to economic nationalists and populists, the private sector must be willing and ready to step up to ensure that the debate stays within bounds. The private sector can play a decisive role in balancing the debate and shaping trade policy, so that even worst-case outcomes do not cause devastation for tens of millions of families across all three countries.

Jere Sullivan vice chairman of international affairs at Edelman in Washington, D.C.