what was said
“This is one of the largest trade deals ever made. Maybe the largest trade deal ever made.”
— President Trump, in a phone call with President Enrique Peña Nieto of Mexico on Monday
Mr. Trump announced on Monday that the United States and Mexico had reached a preliminary agreement to revise key portions of the North American Free Trade Agreement. That is not the same thing as signing a new bilateral deal.
Nor would a United States-Mexico trade agreement potentially rank as the “largest trade deal ever made.”
It is premature to consider the bilateral agreement a done deal. Canada, the third country that was a party to Nafta in 1993, has not yet agreed to the changes. Participating in Monday’s announcement via conference call, Mr. Peña Nieto, the outgoing Mexican president, said he hoped Canada would rejoin the negotiations.
Congress would also need to approve the changes before the trade deal could go into effect.
Even if Mexico eventually agreed, and Congress approved the two-country deal, it would by definition be smaller than Nafta, a three-country deal. In 2017, trade between the United States and Mexico totaled $615.9 billion in goods and services. That same year, trade between the United States and Canada was about $57 billion more, at $673.1 billion.
Gene M. Grossman, a professor of international economics at Princeton University, called Mr. Trump’s claim “at best a vacuous statement, and almost surely misleading or outright dishonest.”
“I cannot imagine any metric in which an agreement between the U.S. and Mexico can be the largest,” Mr. Grossman said.
Several other trade agreements eclipse the size of a potential bilateral deal between the United States and Mexico.
The Trans-Pacific Partnership between the United States, Canada, Mexico and nine other Pacific Rim countries, would have represented 40 percent of global gross domestic product and a third of global trade. (Mr. Trump abandoned this multilateral deal last year.)
The European Union signed a trade agreement with Japan in July, covering a third of the global economy and 40 percent of international trade. The European Union itself is a single market and trade between members totaled about $4 trillion in 2017.
The Uruguay Round of trade talks that culminated in 1994 created the World Trade Organization and involved 123 countries that accounted for 90 percent of international trade. It now includes more than 160 economies and affects nearly all global trade.
“By any measure, the Uruguay Round was the biggest trade agreement ever reached in terms of countries (all W.T.O. members) or amount of trade affected,” said William A. Reinsch, a trade expert at the Center for Strategic and International Studies.
Sources: Office of the United States Trade Representative website, Eurostat, World Trade Organization, Gene M. Grossman, Scott Miller, William A. Reinsch, The New York Times