In 2016 Trump and I had something in common…..we both disliked NAFTA….the only difference was he could do something about it and I could only bitch about it.
US, Canada and Mexico have come to an agreement on trade and NAFTA…..
Canada and the United States reached a deal Sunday night for Canada to stay in a free trade pact with the US and Mexico. In a joint statement late Sunday, US Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said the agreement “will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.” The new deal, reached just before a midnight deadline imposed by the US, will be called the United States-Mexico-Canada Agreement, or USMCA. It replaces the 24-year-old North American Free Trade Agreement, which President Trump had called a job-killing disaster.
The agreement reached Sunday gives US farmers greater access to the Canadian dairy market. But it keeps a NAFTA dispute-resolution process that the US wanted to jettison and offers Canada protection if Trump goes ahead with plans to impose tariffs on cars, trucks, and auto parts imported into the United States, the AP reports. “It’s a good day for Canada,” Prime Minister Justin Trudeau said as he left his office. Canada, the United States’ No. 2 trading partner, was left out when the US and Mexico reached an agreement last month to revamp NAFTA. US-Canada talks bogged down earlier this month, and most trade analysts expected the Sept. 30 deadline to come and go without Canada being reinstated.
Of course Trump’s new replacement for NAFTA has a nice ring to it……USMCA
America’s free trade pact with Mexico and Canada may be alive, but the same can’t be said for the NAFTA moniker. Once the new deal was arrived at Sunday night its new name was announced: the United States-Mexico-Canada Agreement, or USMCA. President Trump weighed in on the name during a Monday press conference, saying, “It has a good ring to it.” It’s also “a great deal,” he said per USA Today, one that should “pass easily, really easily … in theory there should be no trouble.” Congress needs to approve the agreement, and it needs to be ratified in Mexico and Canada as well. As for how one should say the name, Trump didn’t read it as a word a la NAFTA but spelled the letters out: U-S-M-C-A.
CNBC reports that while much of the deal echoes that of NAFTA, there are pivots in terms of how the dairy and auto industries are handled: US dairy producers’ access to Canadian markets will increase, while Mexico and Canada scored a win in terms of an exemption on passenger vehicles, pickups, and auto parts from potential tariffs. CNBC has much more, including details on changes that will could up the price of cars made in Mexico, which could push more of these jobs north of the border.
NYTimes op-ed states that USMCA is worse than NAFTA…….
North American business leaders are breathing a sigh of relief after Canada agreed, at the 11th hour, to join the revised North American Free Trade Agreement between the United States and Mexico. But before they break out the Champagne, they should look at the details.
Although the revised deal brings much-needed modernization in areas such as e-commerce and intellectual property, the media spotlight on Canada has obscured a bigger problem for the region: Under the new terms, North American trade is headed off the rails and, perhaps along with it, political stability south of the border.
But leave it to the master of business, the grad from the Wharton School, to negotiate a deal that has LESS trade in it……
The United States, Canada, and Mexico have completed their renegotiation of the North American Free Trade Agreement (NAFTA). Being nothing, if not creative, negotiators named this revamp the “United States-Mexico-Canada Agreement on Trade,” or USMCA for short. While the namers get an F for imagination and creativity, they receive an A for self-evaluation skills, as they aptly removed the term “free trade” from the title. The USMCA does not advance free trade in the world.
There are more than a few labor and manufacturing provisions in this bill that will, no doubt, lead to higher prices for American consumers. There is a sourcing requirement, which mandates that 75 percent of automobile parts be produced in North America, otherwise that automobile cannot enter duty-free. Not only are the costs of auto parts already rising due to President Trump’s trade dispute with China, they will now rise even further due to the requirement that manufacturers use more expensive domestic parts that could have been imported more cheaply.
Is that a technique known only to those that study at Wharton?
How to cut a deal where there is less trade than the previous deal.