The negotiations between Mexico, the U.S., and Canada have been a recurring topic in the news recently. BBVA Research has used big data techniques to monitor the media coverage and tone used by the national media outlets in each North American country as the slow-going renegotiation of this agreement has been reported.
Mexico, Canada, and the U.S. began renegotiating Nafta in May 2017, months after Donald Trump was elected president in the U.S. The goal was to update the agreement, which was originally signed in the early 1990s. The North American trade authorities aimed to conclude negotiations before 2018 to avoid any potential political fallout resulting from Mexico’s 2018 elections. Ultimately this goal was not reached, and Nafta has entered its eighth round of negotiations.
However, on August 27 the U.S. and Mexican authorities announced they had reached a bilateral agreement in principle that would replace Nafta. The chief economist of BBVA Bancomer, Carlos Serrano Herrera, welcomed this progress as a positive sign pending the inclusion of Canada to seal the deal. Although full details of the agreement have yet to be revealed, Carlos Serrano explained it basically covers the automotive and agricultural sectors. Likewise, an agreement has been reached on some key aspect such as the duration of the accord (known as a sunset clause), which has been set at 16 years extendable for another 16 years and subject to a review every six years.
BBVA Research's analysis has made it possible to monitor reporting frequency, key terms, the predominant tone and perspective used by the media in its coverage of the Nafta negotiations. To this end, media coverage by the principle news outlets in each of the countries involved in the treaty was analyzed. In the U.S. 120 media outlets were evaluated; in Canada 52, and in Mexico 30 were tracked. Together this represents 20 percent of the region’s most important digital media.
Big data analysis provides a tool that enables high frequency monitoring of the impact the Nafta negotiation process has had on the press.
What is the press saying?
Coverage of Nafta-related topics has increased over time, according to BBVA Research’s study. The so-called “poison pills” proposed by the U.S. are among the subjects featured, most specifically the “sunset clause” and suggested changes to the rules of origin for the automobile industry.
Approval of the U.S. proposed “sunset clause” would involve a mandatory review and renegotiation of the agreement every five years. In the event the three countries failed to reach an agreement, the treaty would be canceled, thereby provoking significant instability according to Mexican and Canadian authorities. The political controversy raised by these types of proposals has resulted in their becoming topics that have gripped the attention of the media at various times during the negotiations.
BBVA Research has observed that the key terms used most frequently by the press in their coverage of Nafta have been “trade”, "economy”, and “political management and taxation”. During the first rounds of negotiation, there was a balanced use of these three key terms. However, in later stages of negotiation there was a shift with “government management and taxation” and “trade” predominating. “Economy” fell to second place as it was used less frequently.
BBVA Research's analysis also shows that the geographic areas that captured the most media attention were the regions around the U.S.- Mexico border. Wide coverage was also observed in regions just south of Canada. But it has been Mexico where the media has paid the most attention to the Nafta negotiations.
In general media sentiment about the agreement has been pessimistic
Despite the controversies and international implications related to the renegotiation of the agreement between the North American powers, media coverage of Nafta dropped notably in July 2017 when the most favorable period for its approval came to a close. BBVA Research concludes that from that moment on, media attention focused on related topics, such as immigration.
Media sentiment vis-à-vis Nafta
BBVA Research concludes that in general media sentiment about the agreement has been pessimistic. A negative tone has predominated in the majority of news items analyzed. The analysis also shows that this sentiment has been common across North American media outlets, irrespective of their country of origin.
In May 2017, the 23-year-old agreement floundered. It seemed as if the era of free trade in North America was coming to an end under U.S. President Donald Trump’s new mandate. This view could be sensed in the media's tone regarding Nafta, which became increasingly pessimistic as expectations that an agreement would be reached evaporated.
According to BBVA Research, throughout the negotiations there have been moments when the press used a more positive tone to cover Nafta-related topics. As reported by the study, moments of journalistic optimism occurred both in the first official rounds of negotiation as well as in later stages, such as April 2018 when an agreement seemed more likely.
Positive signs and a more optimistic tone were observed in May when it seemed like the signing of an agreement was imminent. Nonetheless, the successful conclusion of the trade discussions has not been possible given the current disagreement over topics such as dispute settlement provisions or stipulations that control sector-specific trade such as the automobile industry, areas where the U.S. administration has refused to budge, thus hindering dialogue with its Canadian and Mexican counterparts.
According to BBVA Research’s conclusions, despite the rounds of negotiation that have taken place to date, it is excepted that uncertainty about the treaty will continue and there will be not be significant progress until the second half of Donald Trump's term in office.