Tag: Trade Agreements

A New “Free Trade” Agreement

Once again I return to my small expertise….foreign affairs….I have gotten caught up in the drama we call politics here in the US….it is a train wreck that one cannot look away from or miss the best part.

Our president is playing the trade war card these days…..everyone is in his sights……his policies reflect ideas from the 1950s not the 21st century….but that is not what this post is about……

There is a new “Free Trade” agreement now…..it is the continent of Africa…..

In a nutshell, it means a single market of goods and services for 1.2 billion people with an aggregate GDP of over $2 trillion. UNCTAD, the UN’s trade body, predicts reducing intra-African tariffs under AfCFTA“could bring $3.6 billion in welfare gains to the continent through a boost in production and cheaper goods.”

One of the more stark economic data points about Africa is just how little African countries trade with each other—just 16% of total continental trade in 2014. The UN Economic Commission for Africa thinks AfCFTA has the potential to raise intra-African trade by 15% to 25%, or $50 billion to $70 billion, by 2040.

Brookings’s analyst Landry Signé estimates that if AfCFTA works as intended, Africa will have a combined consumer and business spending of $6.7 trillion in 2030.

https://qz.com/africa/1633022/africa-free-trade-deal-will-boost-continent-economy/

It is good to see that Africa is trying to protect itself and to make a better economy for the people of the region.

The Free Trade Con

As Americans we pretend that we are down with the concept of Free Trade…..but in reality there are very few voters who know what the term means and we voted a dim wit into the presidency with the promise of more “Free Trade”…….

First let us define “Free Trade”…… Free trade is a policy to eliminate discrimination against imports and exports. Buyers and sellers from different economies may voluntarily trade without a government applying tariffs, quotas, subsidies or prohibitions on goods and services. Free trade is the opposite of trade protectionism or economic isolationism. (Trump shot that concept in the ass!)

Politically, a free-trade policy may be the absence of any trade policies, so a government doesn’t need to take specific action to promote free trade. This hands-off stance is referred to as “laissez-faire trade” or trade liberalization. Governments with free-trade agreements do not necessarily abandon all control of import and export taxation. In modern international trade, few free trade agreements (FTAs) result in completely free trade.

If you have a hard ti me with this concept we can get more simple……

https://youtu.be/sLoL99lIJzU

From the start of these “Trade Agreements” like Clinton’s NAFTA and then it went on from there….I had to write about them as well….

https://lobotero.com/2016/12/09/what-about-nafta/

https://lobotero.com/2018/10/03/nafta-vs-usmca/

The promise of a better trade economy from the dolt in the White House has done little to expand the concept of “Free Trade”…..and the GOP can NO longer claim to be the party for Free Trade as long as they enable the policies of this president…..

The whole idea of a “new” NAFTA is a con and the American people need to be aware of this con…..

Approval of the North American Free Trade Agreement (NAFTA 2.0 also known USMCA) will do little to reverse the problems of the NAFTA trade agreement of 1994. Nothing in the proposed replacement agreement will prevent job outsourcing, nor is there any part of the agreement that would reverse our current agricultural trade deficit. So what’s the deal with the “Motorcade for Trade” tour?

The 2018 Census of Agriculture documents the occurrence of a clear shift in farm size. Small and medium sized farms are exiting production while the number and overall size of larger farms continues to increase. We are told growth is inevitable in any business if they wish to succeed, because growth goes hand in hand with efficiency and profit.

Farmers are told they must become more efficient and adopt economies of scale and that rationale is often accepted since farm prices are seemingly always on the decline and less income per unit of production means more units of production are required if one wants to survive. This same logic is applied to most jobs: factory workers must produce more, teachers must teach larger classes, etc.—all for the same low wage.

https://www.commondreams.org/views/2019/04/17/dont-fall-hype-free-trade-agreements

Voters need to know that a con job is a con job and this BS is at beast “snake oil” for the mindless.

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.

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…..

A New Round Of Tariffs

Here we go!

It is not over and promises to get worse……

The trade war has started……Trump’s admin has placed tariffs on China and our European friends…..and a new round has been put into place against China….

The US-China trade war is here—and it’s escalating rapidly. US authorities rolled out a list Tuesday of some $200 billion in Chinese goods that could be hit with 10% tariffs by September, Deutsche Welle reports. The list of more than 6,000 product lines includes food products and many consumer goods, raising fears that the escalation could raise prices significantly for American shoppers, the Wall Street Journal reports. China hit back with its own tariffs on $34 billion in American goods after the US brought in tariffs on the same amount of Chinese goods last week, and Beijing has signalled that it will continue raising tariffs dollar for dollar. No talks are scheduled to resolve the dispute, which the US side blames on unfair Chinese practices.

The latest US tariffs were condemned by Senate Finance Committee Chairman Orrin Hatch, among others, who called the move “reckless.” China Ministry of Commerce said it was shocked by the escalation, the South China Morning Post reports. “China is shocked by the US move and the Chinese government, as always, will have to react to defend the core interests of our nation and people,” the ministry said. Li Chenggang, assistant minister of commerce, likened the US to a “bull in a China shop” and said tit-for-tat tariffs would “inevitably destroy” US-China trade.

The predictions are that these tariffs will now effect every room of one’s house from the windows and doors to kitchen to bath room….so many household things are made in China and now it will be expensive…..

Something to think about……the attacks on China by Trump could be behind the NK flipping on the “deal” that was supposedly struck in Singapore.

Just a thought.

Tit For Tat Tariffs

Even if you are a Repub you know that Trump has fired the shots of a tit for tat tariff war with China first and others to come…..and China will not roll over for Trump……

The United States hiked tariffs on Chinese imports Friday and Beijing announced it was retaliating against American goods in a technology dispute between the world’s two biggest economies that President Trump says he is prepared to escalate. Washington imposed 25% tariffs on $34 billion worth of Chinese imports, a first step in what could become an accelerating series of tariffs. Retaliatory measures “took effect immediately,” said a Chinese foreign ministry spokesman, Lu Kang. Hu gave no details, but the Communist Party newspaper People’s Daily said the customs agency was carrying out a plan announced last month to impose 25% tariffs on a $34 billion list of American goods including soybeans, pork, and electric cars, reports the AP.

The AP reports the first exchange of tariffs is unlikely to inflict much economic harm on either nation. Indeed, Asian financial markets took Friday’s developments in stride. Japan’s main stock index, the Nikkei 225, gained 1.1% while the Shanghai Composite Index added 0.5%. Hong Kong’s Hang Seng rose 0.8%. But President Trump said Thursday that he’s prepared to impose tariffs on up to $550 billion in Chinese imports—a figure that exceeds the $506 billion in goods that China actually shipped to the United States last year. Escalating tariffs would likely raise prices for consumers, inflate costs for companies that rely on imported parts, rattle financial markets, cause some layoffs, and slow business investment. A full-fledged trade war, economists warn, risks tipping the US economy into recession. See the AP for more, including the impacts the tariffs have already had .

I feel this is all just a feel good war…..there will be NO winners…..just workers losing…..

I would think that if someone was a graduate of the Wharton School they would understand the complexities of a trade war….but then I could be mistaken and Wharton does not teach such things.

The EU will be next on the targets of the Trump Tariff Train…..

Int trade4.jpg

Closing Thought–03Jul18

You know that there is humor in DC….you just have to know where to look…..

For months now the big story has been the tariffs that Trump has decided to punish our allies and neighbors with…….his newest attempt…….

Take the Fair & Reciprocal Tariffs Act……what shall we call it for short?  How about the FART Act?

President Trump is no fan of the World Trade Organization, and Axios reports that he ordered his advisers to work up a bill that would give him broad power to circumvent WTO rules and negotiate his own deals. The story by Jonathan Swan uses the words “insane” and “stunning” to describe the bill’s scope, though it adds that the measure has virtually no chance of becoming reality. Trump reportedly was briefed on the working draft in May. CNN confirms the existence of the leaked proposal, called the United States Fair and Reciprocal Tariff Act. And, yes, the emergence of that name has led to a barrage of social media jokes and commentary about the FART Act, notes the Guardian. “WTO has its flaws, but the ‘United States Fair and Reciprocal Tariff Act,’ aka the U.S. FART Act, stinks,” writes Anthony Scaramucci. “American consumers pay for tariffs.”

And this from a New York Post staffer: “As an editor who writes some headlines at the NY Post can I just say I’m really psyched about the FART Act,” writes Seth Mandel. The Axios report says most of the Trump officials who worked up the proposal think it’s unrealistic, and that has led to speculation that staffers gave it the unfortunate acronym on purpose, notes Business Insider. A White House spokesperson confirmed that Trump asked his team to work up ideas to “remedy” what he sees as unfair trade laws. “The only way this would be news is if this were actual legislation that the administration was preparing to roll out, but it’s not,” says Lindsay Walters. “Principals have not even met to review any text of legislation on reciprocal trade.”

You just cannot make up this shit……DC has better than the Late Nite TV shows……they do it all to themselves……gotta love it.

Following the close of a second quarter that will be best remembered by President Trump’s vacillations on trade, Axios has dropped a Sunday night bombshell that may spook markets hoping for a respite from the daily escalating trade war rhetoric as the second half of the year begins: White House reporter Jonathan Swan has obtained a copy of a draft bill, purportedly ordered by Trump himself, that would allow the US to “walk away” from its commitments to the World Trade Organization.

http://theantimedia.com/trump-blow-up-world-trade-organization/

Good times coming!

The War Of Words

It seems they is all we have going on in this country these days…all the he said, he said…..the silly back and forth while this country slides into yet another abyss…..the trade war is the newest “art of the deal”…….the bluster is good but is any of it true?

President Trump on Monday made the case that his White House is righting years of wrong in regard to China. Beijing “has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products – would be one of the best things to happen to our farmers in many years!” he wrote. “On China, Barriers and Tariffs to come down for first time,” went another. And a third took aim at Democrats. “I ask Senator Chuck Schumer, why didn’t President Obama & the Democrats do something about Trade with China, including Theft of Intellectual Property etc.? They did NOTHING! With that being said, Chuck & I have long agreed on this issue! Fair Trade, plus, with China will happen!” The tweets follow days of negotiations between the two nations, though even some of Trump’s supporters are worried that China is getting the upper hand. Details:

  • Dueling statements: Treasury chief Steven Mnuchin said Sunday that the US was “putting the trade war on hold” and ditching the idea of tariffs while talks continue. However, Trade Representative Robert Lighthizer made a point to say that tariffs were still an important tool to “protect our technology.” The Wall Street Journal sees these as “markedly different positions,” adding that the statements punctuate days of negotiations “with a question mark.”
  • China winning? An analysis by Heather Long at the Washington Postasserts that China is winning the trade fight, at least so far. The White House, for example, has been demanding that China reduce the United States’ trade deficit with Beijing by at least $200 billion, but no such specifics were evident in a “noticeably vague” joint statement issued by the nations over the weekend. Also, China may have agreed to buy more US energy and farm products, “but it was almost certain that the Chinese were going to buy more of that stuff anyway.”
  • Criticism: Business Insider rounds up criticism of the weekend developments from Trump allies including Lou Dobbs of Fox Business (“US must export like a superpower not an agrarian developing nation half our size!” he wrote) and former steel industry CEO Dan DiMicco (“Did #President just blink?” he wrote. “China & friends appear 2 be carrying the day.”) Meanwhile, Marco Rubio states flatly that China “is winning the negotiations.”
  • What’s next: With the trade war “on hold,” CNNMoney looks at the big questions still to be answered in ongoing talks, including whether Beijing will seriously address US allegations of technology theft.
  • Biggest threat? A post at Axios argues that China is “thinking long term” with a global strategy, unlike the US. “China is pouring time, money, infrastructure and trade into every continent, after promising to fill the global void created by Trump’s America First,” writes Jim VandeHei, who also faults Congress for having short-term vision. Xi Jinping is positioning China to dominate most of the world’s important industries in the decade to come.

So the “art of the deal” is put on hold while the words continue to fly……is this something learned in the Wharton School?

TPP Will Not Go Quietly

2016 the promise was to pull out of the TPP because it was NO GOOD for the country and NAFTA would be re-negotiated….promises by then candidate Donny Trump…..

So far NAFTA remains in its original form and the US has pulled out of the TPP in 2017…..but wait there is more news on the TPP front…….

President Donald Trump has asked trade officials to explore the possibility of the United States rejoining negotiations on the Pacific Rim agreement after he pulled out last year as part of his “America first” agenda, the AP reports. Farm-state lawmakers said Thursday after a White House meeting with Trump that he had given that assignment to his trade representative, Robert Lighthizer, and his new chief economic adviser, Larry Kudlow. The Trans-Pacific Partnership would open more overseas markets for American farmers. “I’m sure there are lots of particulars that they’d want to negotiate, but the president multiple times reaffirmed in general to all of us and looked right at Larry Kudlow and said, ‘Larry, go get it done,'” said Sen. Ben Sasse. Eleven countries signed the agreement last month.

Trump’s rejection of the deal has rattled allies and raised questions at home about whether protectionism will impede US economic growth. Kansas Sen. Pat Roberts, the chairman of the Senate Agriculture, Nutrition and Forestry Committee, said he was “very impressed” that Trump had assigned Kudlow and Lighthizer “the task to see if we couldn’t take another look at TPP. And that certainly would be good news all throughout farm country.” The discussions came during a meeting in which Trump told farm-state governors and lawmakers that he was pressing China to treat the American agriculture industry fairly. Midwest farmers fear becoming caught up in a trade war as Beijing threatens to impose tariffs on soybeans and other US crops, a big blow to Midwestern farmers, many of whom are strong Trump supporters.

Is the possibility of re-joining TPP a by-product of the new tariffs that the president thinks will make America Great Again?