Goldman Sachs on NAFTA renegotiation - impact on CAD & MXN
Goldman Sachs Economics Research has used "simple text analysis" of comments from the public on the NAFTA renogiation
- The Trump administration recently announced its intention to renegotiate the North American Free Trade Agreement (NAFTA)
- As part of that process, the US Trade Representative recently solicited comments from the public
- Using simple text analysis, we analyze those comments to measure sentiment across corporates and individuals, as well as identify particular industries that were frequently mentioned.
- We find that comments from companies and trade groups tend to be positive on the agreement, while individuals are much more negative.
- This is consistent with trade agreements having broad benefits but sharply penalizing some pockets of the population.
What GS see as implications:
- Our results are additive to our view that the renegotiation of NAFTA will probably result in only incremental changes - in part because corporations are likely to strongly oppose new barriers.
- From an investment standpoint, this supports our outlook that NAFTA re-negotiation is unlikely to be disruptive enough to fundamentally negatively affect MXN and CAD.