This is from Trump's press conference at the G7 meeting:
Q Are you close to a deal on NAFTA? Your Press Secretary said (inaudible).
THE PRESIDENT: So two things can happen on NAFTA. We’ll either leave it the way it is, as a threesome deal with Canada and with the United States and Mexico, and change it very substantially — we’re talking about very big changes. Or we’re going to make a deal directly with Canada and directly with Mexico. Both of those things could happen.
If a deal isn’t made, that would be a very bad thing for Canada and it would be a very bad thing for Mexico. For the United States, frankly, it would be a good thing. But I’m not looking to do that. I’m not looking to play that game.
So we’re either going to have NAFTA in a better negotiated form, or we’re going to have two deals.
Q And does it have to have a sunset clause in it?
THE PRESIDENT: It will have a sunset. You have the two sunsets. I mean, you have an ISDS provision and a sunset provision. They’ve been very heavily negotiated. You have two sunsets, two concepts of sunset. We’re pretty close on the sunset provision. Okay?
Q Like five years or —
THE PRESIDENT: Well, we have one that’s five years; you know it very well. You’ve studied this very well. Congratulations. That’s right. You have one group that likes to have five years, and then a renegotiation at the end of five years. And you have another group that wants longer because of the investments. But we’re pretty close.
I've had a couple interactions with people -- online and in person -- who argued for having a sunset clause in NAFTA (i.e., NAFTA expires and terminates in five years, unless the parties affirmatively agree to renew it). It's one of the least convincing arguments I've ever heard, and I wasn't even sure if they believed in it. I certainly understand why people who oppose trade agreements want them to be sunsetted, but in my view they don't have anything resembling a principled policy argument for doing this.
If the sunset clause is an item being put forward as a "concession" to be negotiated away, that's fine. But I hope that someone is telling Trump (and also telling his senior trade people) that there is no chance of having a sunset clause that involves automatic expiration in NAFTA or any trade agreement. No other government will agree to it, and neither will Congress.
(I'm not really sure what he means by "another group that wants longer because of the investments." I could speculate, but it would probably be wrong.)
