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America’s trade negotiators are now in the process of crafting a 2.0 update of the 1994 North American Free Trade Agreement (NAFTA). Fortunately, it now appears that Donald Trump’s intention on NAFTA is to mend it, not end it. The trade deal has been a stunning economic success for all three nations: Canada, Mexico and the United States. Freer trade has meant steady increases in the volume of trade, greater competitiveness and lower prices.
But President Trump is right that under NAFTA 2.0, some things need to be fixed to guarantee fair play and to assure America’s continued commanding heights in technology and innovation. Intellectual property rights — patents, copyrights and so on — need to be better safeguarded.
There have been abuses. In an unprecedented move, Canadian regulators recently ordered American pharmaceutical company Alexion to lower the price of its breakthrough treatment for a rare blood disorder. The decision was based on currency exchange fluctuations between 2012 and 2014, which increased the relative cost of the medicine — despite that the company obviously has no control over currency values.