Wanting to honor the Marines, President Trump abbreviated NAFTA’s replacement as USMC for the three countries entering into the agreement. As we know, that morphed into USMCA because without the A for agreement it would have been just a list of countries. But isn’t the U.S., Mexico, Canada Agreement a lousy name precisely because USMCA is so cumbersome? After all does anyone call the Marines the USMC? Sure most people know USMC is the acronym of the United States Marine Corps, but that isn’t enough to make it the default name. The term Marines conjures up an image of a proud branch of service that has served and is serving the U.S. well. USMC doesn’t help build that image. By fading into the background USMC has taken its rightful place, allowing the Marines to take their rightful place front and center.
Looking at precedent and the agreement itself we should be able to come up with a name yielding a better acronym because USMCA should also fade into the background. We can begin by looking at past agreements. Regional trade agreements like NAFTA, CAFTA and Obama’s proposed TPP roll off the tongue much better than USMCA. Not that they are truly free trade agreements The North American Free Trade Agreement and The Central American Free Trade Agreement were declared to be free trade agreements back before that term became politically toxic. However, both have less than free trade elements. Their treatment of dairy and sugar come to mind. The late Nobel Prize winning economist Milton Friedman pointed out that FTAs are hundreds if not thousands of pages long whereas a truly free trade agreement needs to be only a page or two. All the extra pages allow the agreeing countries to protect politically powerful groups that stand to be hurt by truly free trade. The end result is hurting consumers to benefit the special interest groups.
Undoubtedly, the toxic nature of the term free trade agreement influenced naming Obama’s ambitious Trans Pacific Partnership a partnership rather than an FTA. Of course, TPP had a more ambitious agenda than just freeing trade. One goal was to contain China’s ambition of economic domination. A goal President Trump seems to share, but he chose to forego TPP’s soft power, international alliance approach for the more hardball tariff and inflammatory rhetoric path, and what’s worse he thinks it is working. Instead, at this point he should be regretting his choice. TPP would have united 12 countries against China, and as a side benefit it included a revision of NAFTA, many parts of which are now part of the USMCA.
So now for name change proposals: Terms we see in the press include the “New NAFTA” and “NAFTA 2.0”. Likely these are not being used as suggested new names, but as a way of avoiding use of USMCA and alerting readers more clearly the topic being addressed. That said, NAFTA 2.0 does have a certain draw. After all, a large share of USMCA comes directly from the original North American Free Trade Agreement text. It’s interesting, President Trump declared NAFTA the “single worst trade deal ever approved in this country” — a sentiment he has repeated many times, but it forms the foundation of USMCA which he recently described as the “most modern, up-to-date, and balanced trade agreement in the history of our country.” Perhaps there were only a few parts of NAFTA that pushed it from being the best to being the worst.
As another naming option perhaps we could follow Obama’s lead and call it the North American Partnership or NAP. Of course two problems immediately surface. First, Trump would never give credit to Obama for anything good, and second, NAP, while easy to say, probably isn’t the most desirable image for a new, hopefully dynamic initiative.
While I’m certain Trump would object (see NAP above), perhaps naming it for the heaviest contributors should be considered. In this case we could call it the Obama, Trump NAFTA or OTNAFTA. An optional 2.0 or even Partnership could be added at the end. Sure it looks cumbersome, but you can pronounce it if you think of it as O.T.-NAFTA, and if Partnership were added it would become O.T.- NAF-TAP. Any of these possibilities can be justified since Obama, through TPP, supplied many of the revisions of NAFTA that formed the basis for USMCA negotiations, and Trump threw in the new, onerous requirements for the regional production of vehicles to qualify for the agreement’s special tariff treatment. Trump’s new regulations would make a bureaucrat’s bureaucrat proud. They will inflict such a heavy paperwork burden on the North American auto industry that it may prove expedient for vehicle producers to just pay the tariff normally levied on vehicles and their parts not qualifying for NAFTA’s special treatment and forego doing the paperwork. For cars this is a low 2.5% tariff. Trucks, on the other hand, are another matter. That tariff is 25%. Trump also insisted on keeping the ability to reinstate protection by invoking a national security argument (via a complicated process that includes at least one exception), and made Mexico and Canada agree to alert the U.S. anytime they are considering entering a trade deal with China or other non-market economies, giving the U.S. an excuse to then pull out of USMCA.
Here are possible names that didn’t make the cut but warrant an honorable mention. In these the A can either link with C to represent Canada, or stand for And. The “honorable” mentions include: CAMUS offering a nod to the French philosopher; MUSAC bringing back memories of elevator music; SUMAC referring to the potentially toxic nature of USMCA by going with States, United; and SCAMU being senseless by separating and reversing the US yet making perfect sense the more we learn about the agreement. Of course, USCAM is more logical but it may make the most sense if “ed” is added at the end.
Perhaps we could look at USMCA as a mixture of the good, the bad and the ugly. The good being the Obama and original NAFTA parts, the bad being Trump’s contribution, the ugly being the name.