NAFTA Vs USMCA

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.

https://www.realclearmarkets.com/articles/2018/10/02/leave_it_to_trump_to_negotiate_a_deal_that_leads_to_less_trade_103433.html

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.

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A New Cold War?

Our Dear Leader went to the UN and made his feelings known.  First was the humor that was unintended but he made it sound like it was a humor set-up…..anything to make it look like it was his idea…..after his chuckle he then went before the UN Security Council and made another threat……

President Trump on Wednesday accused China of trying to meddle in the 2018 elections in a bid to keep him down. While opening a UN Security Council meeting, Trump put it like so, per the BBC: “In my remarks yesterday to the United Nations General Assembly, I laid out my administration’s commitment to building a more just and peaceful future. Regrettably, we found that China has been attempting to interfere in our upcoming 2018 election coming up in November against my administration. They do not want me or us to win because I am the first president ever to challenge China on trade. We are winning on trade. We are winning at every level. We don’t want them to meddle or interfere in our upcoming election.”

Foreign Minister Wang Yi, China’s representative on the Security Council, responded with a denial, reports CNN: “We do not and will not interfere in any countries’ domestic affairs. We refuse to accept any unwarranted accusations against China, and we call on other countries to also observe the purposes of the UN charter and not interfere in other countries’ internal affairs.” Trump was later asked what proof he had. “Plenty of evidence,” he replied, though he didn’t offer any. The AP reports a Chinese delegate “shrugged” when the remarks were translated in the General Assembly.

It will be China this time…..will it be the talk of the town as the Russian thing for the 2016 election?  Somehow I doubt it.

But as long as we are talking China.

Our Dear Leader has a massive hard-on for China and just keeps poking the dragon in the eye about trade…..

resident Donald Trump is making good on his pledge to escalate the trade war with China by imposing tariffs on US$200 billion of Chinese goods. The Chinese government, for its part, is already retaliating with new taxes on $60 billion of American imports.

If you’re curious why China’s sanctions don’t match Trump’s, there’s an easy explanation. As a number of commentators have correctly pointed out, Beijing is running out of American products to target. Americans bought $375 billion more stuff from China than the Chinese bought from the U.S. last year, which means Trump has a lot more to punish.

While this may mean that China’s leverage on trade is limited, it doesn’t mean that Trump can easily win this confrontation.

https://theantimedia.com/trump-trade-war-china-cold-war/

I do believe this situation will get uglier before it gets better….if ever.

Closing Thought–25Sep18

Our Dear Leader has been waging his trade war for a little over 2 months…..some are happy with the events……while others are finding it difficult to earn a living with the tariffs and stuff…..

Farmers are needing help…..and another industry is finding these tariffs a bit hard to swallow……

The American lobster industry is starting to feel the pinch of China’s tariff on US seafood as exporters and dealers cope with sagging prices, new financial pressures, and difficulty sending lobsters overseas, the AP reports. China is a major buyer of lobsters, and it imposed a heavy tariff on exports from the US in early July amid trade hostilities between the two superpowers. Exporters in the US say their business in China has dried up since then. Wholesale prices for live lobsters have also dipped a bit as dealers have lost markets. Prices in July and August were both slightly less than the same month in the previous year, business publisher Urner Barry reported.

One exporter, The Lobster Co. of Arundel, Maine, resorted to laying off four people, which constituted 25% of its wholesale staff, says Stephanie Nadeau, the company’s owner. “I can cut my variable costs and tuck my head in and see if this storm passes,” she says. “What they’ve done is made it so everybody is fighting over the remaining customers. Price goes down, margins go down.” China applied the tariffs to a suite of American seafood products, including tuna and crab. It made the move at a time when many Chinese are acquiring a taste for American lobster. China’s American lobster imports grew from $108.3 million in 2016 to $142.4 million last year, and the country barely imported any American lobster a decade ago.

Lagging prices may help the consumer but does little for the struggling fisherman……

Keep that in mind when you make that trip to your local Red Lobster”….who I am kidding….Americans have NO social conscience any more…it is all me,me, me!

 

Closing Thought–21Sep18

An American institution is heading for a fall.  American agriculture is heading for a fall.

It is time for the harvest!

I have been watching this sector of our economy closely….one because the new tariffs could have a lasting effect on the farming in this country…..I have written a couple posts recently….

https://lobotero.com/2017/12/18/closing-thought-18dec17/

https://lobotero.com/2018/07/25/the-coming-farm-aid/

The Wall Street Journal is also watching this sector and their insights are not very good for the coming year…..

The Farm Belt is hurtling toward a milestone: Soon there will be fewer than two million farms in America for the first time since pioneers moved westward after the Louisiana Purchase.

Across the heartland, a multiyear slump in prices for corn, wheat and other farm commodities brought on by a glut of grain world-wide is pushing many farmers further into debt. Some are shutting down, raising concerns that the next few years could bring the biggest wave of farm closures since the 1980s.

The U.S. share of the global grain market is less than half what it was in the 1970s. American farmers’ incomes will drop 9% in 2017, the Agriculture Department estimates, extending the steepest slide since the Great Depression into a fourth year.

https://www.wsj.com/articles/the-next-american-farm-bust-is-upon-us-1486572488

How sad that a true American institution is slowly withering away….the government will step in but it may be too late for it to save this way of life.

STOP Whining!

Our Dear Leader has finally imposed the tariffs that he basically promised while a candidate…..the agriculture sector in the US is starting to hurt those people that voted for Trump……and soon it will extend into the auto industry……

The lobster fishermen in New England are whining….potato farmers in Idaho are whining……cranberry framers are whining……soybean farmers in Nebraska are whining….are you getting the picture?

Time for these whiners to face reality…..they voted for the person that is slowly strangling them……they voted for the person that said what he had in mind as a new trade policy.

So these people need to STOP whining!

Take responsibility for the the shitty vote they gave the person that is killing their future….the control of that future.

Ignorance has consequences.

And the whining continues……this time it is over the turn that the Kavanaugh nomination has taken…..it seems that he has been accused (notice I used “accused”) of a drunken grope and possible rape attempt…..and the GOP has been whining about the timing of the information release……and then of course the Fat Man in the Oval Office had to inject his feelings into the debate….

President Trump weighed in Monday on the allegation against his Supreme Court nominee, Politico reports. “We want to go through a full process” to air Christine Blasey Ford’s allegation that, when they were high school students, Brett Kavanaugh sexually assaulted her, Trump said. If that “takes a little delay, it’ll take a little delay. It shouldn’t certainly be very much,” he said, per Breitbart News. But the president, speaking during an event at the White House in what Fox News notes are his first public comments on the matter, added that he was certain everything would “work out very well” as Kavanaugh is “as high a quality individual as you’ll ever see.” He said Kavanaugh has “never had even a little blemish on his record. The FBI has, I think, gone through a process six times with him over the years where he went to higher and higher positions. He is somebody very special.”

Trump also said Blasey Ford’s accusation “should have been brought up long before.” “I wish the Democrats could have done this a lot sooner,” he said. “Because they had this information for many months, and they shouldn’t have waited until literally the last days. They should have done it a lot sooner. But with all of that being said, we want to go through the process. I’d like to see a complete process. I’d like everybody to be very happy. Most importantly, I want the American people to be happy. Because they’re getting somebody that is great. … We want to make sure everything is perfect, everything is just right.” Asked if Kavanaugh had offered to withdraw from consideration, Trump responded, per Daily Caller video, “Next question. What a ridiculous question.” He noted he has not spoken to Kavanaugh about the matter.

They are whining like the cowards they are……think back to when another guy was nominated for SCOTUS and the games played …..now does anyone think that there would not be a tit for tat?

Keep whining fools!  If the House goes Democratic then the paybacks have just begun……

Personally, I do not think these “paybacks” accomplish anything ……but I do understand why the Dems will be doing it…..and anyone with half a brain will understand it also.

Whining accomplishes nothing…..to avoid having to use the “whining gambit” then do the work of the nation and leave political games behind.

The voters are the worse whiners….I guess it is easier than learning the issues and voting for the benefit of the nation….not some party.

It’s All About Trade

As no doubt you are aware Our Dear Leader has been on a tear for a couple of months about trade….he has pulled out of some agreements and imposed tariffs that have started a bit of a trade war (oh joy as if the American worker did not have enough problems)

The newest proposal is the threat of the US pulling out of the WTO…of which I have written…..https://lobotero.com/2018/09/03/if-it-is-monday-it-must-be-wto/

Dear Leader has started attacking NAFTA (again) and even has some vague words about a revised NAFTA……sadly it sounds like a scam…..keep in mind that I basically agreed with Trump on NAFTA…I think it was a barbaric thing to do to American worker……that aside…I was saying a “scam”?

If the renegotiated North American Free Trade Agreement were good for working people, its content wouldn’t be hidden. Just what the Trump administration and the Mexican government of Enrique Peña Nieto have cooked up we do not know, but given the proclivities of both it is not likely to be good.

That the hurried-up deal appears to be intended to force Canada, which has the strongest regulations among the three NAFTA countries, into signing on disadvantageous terms, provides all the more reason to be skeptical. And, finally, a study of the United States Office of the Trade Representative’s “fact sheet” leaves no doubt that any new NAFTA will be a windfall for multi-national corporations, at our expense.

https://www.counterpunch.org/2018/08/31/revised-nafta-shows-every-sign-of-being-another-trump-scam/

Trump is doing what has become his trademark style….he goes in kicks over all the furniture and then rearranges …in other words he tries to ax an agreement and then with a little success he can claim ultimate victory…..which it is not.

It is always about appearance not results.

And then there is China….you remember them right?

It is 10 years in September since Lehman Brothers went bankrupt bringing global capitalism to the point of collapse.  Although the crash did not finally lead to a total meltdown, it triggered a slump of 1930s proportions and for most economies the last decade has been a lost decade of low growth, low investment, low productivity, marked by debt and deficit, with virtually no improvement in real incomes for the 90 per cent.

The stand-out story of the period has to be the continuing rise of China. Initially, the economy was also badly hit by the crisis, but China was able to recover rapidly to emerge today as a major economic power, moving steadily closer centre stage in the global order.

https://www.counterpunch.org/2018/08/31/the-decade-of-a-rising-china-10-years-after-the-financial-crisis/

Keep in mind that China is our world competitor….is it really a good idea to start a trade war with them?

Something else to consider…..with all the games played by Our Dear Leader with US trade we still had a deficit……

The US trade deficit widened for the second straight month in July, reaching the highest level since February, as imports hit an all-time high. The deficit in goods with China and the European Union set records, reports the AP. The Commerce Department said Wednesday that the deficit in goods and services—the difference between what America sells and what it buys from other countries—rose to $50.1 billion in July from $45.7 billion in June. Exports slipped 1% to $211.1 billion, while imports increased 0.9% to a record $261.2 billion on increased purchases of trucks and computers. The deficit rose despite President Trump’s efforts to bring it down by renegotiating trade agreements and imposing taxes on imports.

So far, Trump’s aggressive policies have had little impact on trade numbers. The goods deficit with China rose 10% in July to a record $36.8 billion. The EU gap shot up 50% to a record $17.6 billion and with Canada nearly 58% to $3.1 billion. The July deficit with Mexico, though, plunged 25% to $5.5 billion. So far this year, the trade deficit is up 7% from January-July 2017. Trump views trade deficits as a result of bad trade deals and abusive behavior by America’s trading partners, but mainstream economists blame an economic reality that can’t be changed much by trade policy: Americans spend more than they produce, and imports fill the gap, particularly as a strong US economy encourages Americans to buy more foreign products.

Maybe things will look up next month……

This will be one of few posts of the day….I must endure about 5 to 6 hours of medical tests and doctors visits….I shall return later…..

If It Is Monday It Must Be WTO!

First, this is not some post about some moronic wrestling federation extravaganza….no I am talking about the World Trade Organization (WTO)….or some of you old farts might remember it as GATT (General Agreement on Tariffs and Trade)…..but what the Hell is it?

The WTO was born out of negotiations, and everything the WTO does is the result of negotiations. The bulk of the WTO’s current work comes from the 1986–94 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT). The WTO is currently the host to new negotiations, under the ‘Doha Development Agenda’ launched in 2001.

Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to open markets for trade. But the WTO is not just about opening markets, and in some circumstances its rules support maintaining trade barriers — for example, to protect consumers or prevent the spread of disease.

https://www.wto.org/english/thewto_e/whatis_e/who_we_are_e.htm

I know you are probably thinking that this has nothing to do with you…well you would be wrong for Our Dear Leader if successful could make your living a lot more expensive than today……

He, Dear Leader, has declared a possible war on the WTO……

Shape up or we’ll ship out. That was essentially the message President Trump had for the World Trade Organization in an interview with Bloomberg on Thursday. Trump described the 1994 agreement that formed the WTO as “the single worst trade deal ever made” and issued his threat: “If they don’t shape up, I would withdraw from the WTO.” The body sets rules for global trade and serves as a forum for handling trade disputes, and Trump complained about the historical outcome of those complaints. He had this to say: “We rarely won a lawsuit except for last year. In the last year, we’re starting to win a lot. You know why? Because they know if we don’t, I’m out of there.”

The BBC cites a study that shows the reality is more like 90/90: We win about 90% of the cases we bring, and lose just shy of 90% of those filed against us. As for the cases filed against us, ones from China have made recent headlines. The AP reports Beijing on Monday formally sought “dispute consultations” over the latest round of tariffs—$16 billion of them—imposed last week on Chinese goods. China is a thorn, per US Trade Representative Robert Lighthizer, who views China’s 2001 entry into the body as a mistake. Bloomberg’s take: “A US withdrawal from the WTO potentially would be far more significant for the global economy than even Trump’s growing trade war with China.” In the meantime, the US has been blocking the appointment of new judges, which could ultimately put the WTO’s ability to issue judgments on ice. Click for more on Trump’s wide-ranging interview.

As this policy expands items will becoming more expensive and in some cases more difficult to obtain and that could influence the production in this country…and for what?

Some minor machismo for the news cycle…….for he must be the talk of the town whether good or bad…..