The Challenges Weighing on the Nafta Negotiations

The video discusses the complexities of the trade deficit, emphasizing that focusing solely on it can be harmful. It examines the US government's strategies to reduce the trade deficit, such as limiting exports from Mexico and Canada, and the potential consequences of these actions. The video also explores the decision-making process for Mexico and Canada, weighing the costs and benefits of staying in NAFTA versus switching to WTO rules.

Why might focusing solely on the trade deficit be considered harmful?

• It ignores other economic factors.

• It leads to increased exports.

• It reduces government spending.

• It strengthens international relations.

What is one method the US government might use to address the trade deficit?

• Reducing taxes on imports

• Limiting exports from Mexico and Canada

• Encouraging foreign investments

• Increasing domestic production

What could be a consequence for Mexico and Canada if the US limits their exports?

• Higher export volumes

• Increased economic growth

• Improved trade relations

• Negative impact on their economies

What is one alternative for Mexico and Canada if they leave NAFTA?

• Joining the European Union

• Reverting to World Trade Organization rules

• Forming a new trade agreement with Asia

• Increasing tariffs on US goods

What might influence Mexico and Canada's decision to stay in or leave NAFTA?

• The popularity of NAFTA among citizens

• The number of trade partners

• The level of foreign investment

• The cost of staying versus the benefits of leaving