The North American Free Trade Agreement is a treaty between Canada, Mexico and the United States. That makes NAFTA the world’s largest free trade agreement. The gross domestic product of its three members is more than $20 trillion. On September 30, 2018, the United States, Mexico, and Canada renegotiated the North American Free Trade Agreement. The new deal is known as United States-Mexico-Canada Agreement – USMCA.
The re-negotiation deal that just concluded did have its typical ‘Trump’ drama that has characterized President Donald Trump ever since he assumed office. As again, he has come up trumps deftly putting across the American brawn.
The drama first. Trump completely sidelined Prime Minister Justin Trudeau in the first round of talks in September. This reminded us of the recent visit of Trudeau to India. Billed as the most expensive personal tour of Trudeau and family funded by the taxpayers. To his credit as a family man, he had photo sessions at the Taj Mahal and several other monuments. The final word on his visit was that it was a monumental failure, lacking in diplomacy and tact. In short, Trump shooed away Trudeau from the multilateral talks and had a bilateral discussion with outgoing Mexican president Enrique Peña Nieto. A bilateral meeting with Canada followed this up and as Trump put it, Canada will have no option but to agree to the terms dictated. Finally, the United States Mexico Canada Agreement (USMCA) has come into being. However, this requires ratification by the Congress. The credit must go to Trump for opening up the Canada dairy market which till now enjoyed complete protection. 75% of automobile spares will be made in North America (USA, Canada and Mexico) to enjoy the tariff concessions. In a way to keep, the Chinese and Japanese automobile spare parts exports pegged at 25%.
Stakeholders in management are accountable for an organisation. Some are powerful and hold a sway over ongoing ‘programs in a projectised organisation’. In an effort to get a firm grip, the strategy is to divide and control individuals. The program managers must be strong enough to face up to such stakeholders. A ‘fact’ based approach is the best approach in such discussions. President Trump sidelined Prime Minster Trudeau in the first round of talks and struck a deal with Mexico. Relatively Mexico has less power at the negotiation table. (Can Mexico pay USD16-per hour as labour?) Once done, Trump let loose ‘off the record’ remarks at Canada, with this psychological advantage invited Canada for discussions. Is this a sound strategy?
Such a strategy has both pros and cons. If the stakeholder is a visionary and has an utilitarian approach of maximizing the overall good considering the good of others as well as one’s own good, it has benefits. If on the other hand, the focus is selfish and draws away from being ethical, then the intentions are questionable. Ethics is what sustains business in the end.
Thanks and Best Wishes
Tanish Mathur, PMP, PMI-ACP
Editorial Content Credit -Vishwanath Thanalapatti, PMP