Trading Places: Trump and Nieto Announce NAFTA Agreement [VIDEO]
Trading Places: Trump and Nieto Announce NAFTA Agreement [VIDEO]
How quickly things can change when the Master of the Deal sets to work. As little as five months ago, Mexican President Peña Nieto was blasting U.S. President Donald Trump for “offensive and unfounded” remarks about his country, and NAFTA – the North American Free Trade Agreement – was up in flames. This afternoon?
US and Mexico tentatively set to replace NAFTA with new deal
Snubbing Canada, the Trump administration reached a preliminary deal Monday with Mexico to replace the North American Free Trade Agreement —
WOWSAHS, no? We thought those Mexican guys hated us, and had Trump to thank/blame for that.
In a surreal Oval Office joint phone call – full of glitches, gremlins, translators, and awkward pauses – both chief executive officers announced their arrival at a bilteral trade pact.
And they did it all without any input from Canada. Those talks begin Tuesday.
After months of intense negotiations the United States and Mexico agreed Monday on a thoroughly overhauled free trade pact, while talks with Canada begin Tuesday.
Despite the milestone announcement, the 25-year-old North American Free Trade Agreement entered a new phase of uncertainty, with Canada’s foreign ministry insisting that country’s signature was “required” while President Donald Trump suggested he could cut Ottawa out of the deal.
“It’s a big day for trade. It’s a really good deal for both countries,” President Donald Trump said in announcing the agreement from the Oval Office, with Mexico’s President Enrique Pena Nieto participating by telephone.
Trump’s agreement with Mexico also gives him leverage against Trudeau’s posturing. If the Canadians want to play, there are ground rules now.
The United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA), putting pressure on Canada to agree to new terms on auto trade and dispute settlement rules to remain part of the three-nation pact.
Auto stocks soared and financial markets firmed on the expectation that Canada would sign on to the deal by the end of the week and ease the economic uncertainty caused by U.S. President Donald Trump’s repeated threats that he would ditch the 1994 accord.
But details of gains and concessions in the deal were only starting to emerge on Monday, and Trump threatened he still could put tariffs on Canadian-made cars if Canada did not join its neighbors.
“I think with Canada, frankly, the easiest we can do is to tariff their cars coming in. It’s a tremendous amount of money and it’s a very simple negotiation. It could end in one day and we take in a lot of money the following day,” Trump said.
Trudeau: “YIKES!!!” Not really, but close enough. Bets are the Canadians come on board and quickly. They’ve got elections next year.
But with the outlines of a NAFTA 2.0 now on paper, including provisions on auto trade, tougher worker rights, and a provision to review the deal every six years, a spokesman for Canada’s top diplomat and trade negotiator said Chrystia Freeland would travel to Washington on Tuesday to rejoin the talks.
Negotiators have worked for a year to update and rewrite the nearly 25-year-old trade pact but in the last five weeks Washington and Mexico City had worked to resolve their own differences without Ottawa.
The Mexicans wanted NAFTA out of the way before the incoming president took over. The new guy didn’t want the headaches and heartaches.
So. What, exactly, did a reworked NAFTA get us? For starters:
The “rules of origin” section alone is worth a look-see right off the bat. Not only did they obtain a bump in the content number…
The Office of the U.S. Trade Representative said Monday that Mexico had agreed to ensure that 75 percent of automotive content be produced within the trade bloc (up from a current 62.5 percent) to receive duty-free benefits and that 40 percent to 45 percent be made by workers earning at least $16 an hour. Those changes are meant to encourage more auto production in the United States.
…but they managed to cut off the work-arounds nations outside the trading block were using to gain access to the U.S. market.
Not only is Asia, specifically China, impacted; but so too are the EU and other international trade partnerships. The critical point is that the U.S. and Mexico have agreed to partner in our approach toward the rest of the world. Outgoing globalist Mexican President Pena Nieto is not happy; incoming nationalist Mexican President Andres Manuel Lopez-Obrador is ultimately the winner.
Through the efforts of Robert Lighthizer (U.S.) and Jesus Seade (AMLO) the Trump administration has now closed one of the access routes into coveted U.S. market, exploited by multinational corporations and countries (using NAFTA). The Mexico route is secure, agreements are made, and now attention turns toward Canada.
Think about the BMW example above, the downstream ramifications within this agreement are massive. It is not coincidental that Canada’s Foreign Minister Chrystia Freeland is in Germany coordinating the response. Now that a deal with Mexico has been reached, Canada has lost all prior leverage.
Remember, the U.S. and Mexico have agreed to “no protectionist tariffs/subsidies” in the agricultural sector. Canada protects its dairy sector with massive protectionist tariffs and subsidies. It is doubtful Trudeau and Chrystia can retreat from their construct.
…This will likely be the outcome. Like it or not, Canada gets to continue protecting dairy sector and gives up its auto-manufacturing sector as a consequence.
It’s also sort of fun watching the smug-butt Canadians eat themselves alive.
I mean just think about it. The president of Mexico, a country Trump has consistently portrayed as basically America’s public enemy no. 1, was able to do something Trudeau and his team of Ottawa geniuses couldn’t.
— J.J. McCullough (@JJ_McCullough) August 27, 2018
When @stephenharper suggested some months ago that Canada pursue bilateral negotiations with the US and disaggregate from Mexico, Liberals ridiculed him.
But now Mexico has succeeded in pursuing bilateral negotiations with the US, leaving Canada on the sidelines. The irony. https://t.co/M7JxoTbLVp
— Jason Kenney (@jkenney) August 27, 2018
As for nuts and bolts, the U.S. Trade Representative fact sheets on the agreement are here for agriculture and here for the agreement in general. They are things of beauty to read, and I encourage you to do so, if ONLY to cause you to ask yourself “WHAT on EARTH/how BAD were we getting boned in the old one?” Survey says, “PRETTY BADLY.”
The lefty doom and gloom spin machines were already at work, disguised as news reports on the breakthrough. Instead of WINNING for American workers, the AP felt obliged to rain on the parade in practically their first paragraph.
Snubbing Canada, the Trump administration reached a preliminary deal Monday with Mexico to replace the North American Free Trade Agreement — a move that raised legal questions and threatened to disrupt the operations of companies that do business across the three-country trade bloc.
President Donald Trump suggested that he might leave Canada, America’s No. 2 trading partner, out of a new agreement. He said he wanted to call the revamped trade pact “the United States-Mexico Trade Agreement” because, in his view, NAFTA had earned a reputation as being harmful to American workers.
Wait a minute.
That WAS their first paragraph.
There was another guy AP and the media just lurved, who swore over and over he was going to renegotiate NAFTA. The name escapes me, but the face is familiar…
He wound up having EIGHT YEARS to…do something. Anything.
President Obama opposed “free trade” (specifically, NAFTA) when he ran for president in 2008. He campaigned to “renegotiate” the most successful trade agreement in U.S. history. Trade with Mexico tripled under NAFTA. In the end, he did not renegotiate NAFTA. He went on to promote a trade agreement with Colombia negotiated mostly by President George W. Bush.
Along comes Donald Trump, his campaign promise JUST LIKE THAT ^ GUY, and, with a little over a year and a half in office…
A big deal looking good with Mexico!
— Donald J. Trump (@realDonaldTrump) August 27, 2018
Trump can’t win for winning with this bunch.
It sure helps that he could care less.
Myself, on the other hand – I like the winning.