U.S. and Mexico reach new trade agreement
- Thread starter Aardvark154
- Start date
Interesting to see where this goes.
If it requires killing of NAFTA, Trump may have not be able to pass it.
Zero details on the deal as of yet as well.
Trump - 'done deal'
See 'North Korea'
Or read here.
https://www.washingtonpost.com/blog...-getting-the-job-done/?utm_term=.2b567f775ec2
Different topic involving a different person. Trudeau thought standing with Mexico was a good idea. Obviously they thought differently.
So at best it means that Trudeau was as naive and stupid as Trump. Is that what you are saying?
There's a thread in the lounge about this where I posted the following:
In order to understand why the US is negotiating hard with Mexico, you need to realize that Mexico has elected a new President. He does not take office until December 1st. He has stated that he would prefer NAFTA be settled before he takes office and would respect what has been negotiated (no guarantees though). So there is a huge political risk that if a deal isn't signed before he takes office - it is back to square one. Why does this matter? Because Trade legislation can require up to 180 days to move through Congress. The President can use a procedure called "Fast Track" which reduces this to 90 days. Now it could conceivably get through Congress faster than 90 days, but it could also take the maximum time if eg: The Democrats take their time. "Fast Track" limits filibusters and Congress cannot request Amendments. In short - the only way the US can guarantee a deal by Dec 1, is to get it before Congress by the end of August.
Canada has no issues with what is being negotiated. Mexico does not want the Sunset Clause anymore than Canada (both would limit investment). The regulations on wage and content being discussed helps Canada, doesn't hurt us. Further, because of the last minute nature of this deal and the fact that the US wants to seal a deal before the new President takes office (because what if he is like Trump with TPP and just tears up what's been negotiated) - THIS gives Mexico a bit of an advantage to conclude negotiations. Once the US and Mexico agree, it should not take much time for Canada, since there is not a lot of daylight between Mexico's demands and ours.
I really wish people would do a bit of reading before they simply post stuff online which they do not have a full understanding of eg: NAFTA as well as the political forces at play.
Edit to add with a load of irony: It should also be pointed out that while Trump rails about Canada and tariffs, the new Farm bill is winding slowly through Congress - maybe passing in Sept. Of course, Trump frames this as just helping farmers who have been hurt by his idiotic trade wars - but in effect it is absolutely no different in principle than supply management - it's all about protecting the producers - fuck the consumers.
In order to understand why the US is negotiating hard with Mexico, you need to realize that Mexico has elected a new President. He does not take office until December 1st. He has stated that he would prefer NAFTA be settled before he takes office and would respect what has been negotiated (no guarantees though). So there is a huge political risk that if a deal isn't signed before he takes office - it is back to square one. Why does this matter? Because Trade legislation can require up to 180 days to move through Congress. The President can use a procedure called "Fast Track" which reduces this to 90 days. Now it could conceivably get through Congress faster than 90 days, but it could also take the maximum time if eg: The Democrats take their time. "Fast Track" limits filibusters and Congress cannot request Amendments. In short - the only way the US can guarantee a deal by Dec 1, is to get it before Congress by the end of August.
Canada has no issues with what is being negotiated. Mexico does not want the Sunset Clause anymore than Canada (both would limit investment). The regulations on wage and content being discussed helps Canada, doesn't hurt us. Further, because of the last minute nature of this deal and the fact that the US wants to seal a deal before the new President takes office (because what if he is like Trump with TPP and just tears up what's been negotiated) - THIS gives Mexico a bit of an advantage to conclude negotiations. Once the US and Mexico agree, it should not take much time for Canada, since there is not a lot of daylight between Mexico's demands and ours.
I really wish people would do a bit of reading before they simply post stuff online which they do not have a full understanding of eg: NAFTA as well as the political forces at play.
Edit to add with a load of irony: It should also be pointed out that while Trump rails about Canada and tariffs, the new Farm bill is winding slowly through Congress - maybe passing in Sept. Of course, Trump frames this as just helping farmers who have been hurt by his idiotic trade wars - but in effect it is absolutely no different in principle than supply management - it's all about protecting the producers - fuck the consumers.
Just a brief review shows that the details are almost identical to what was agreed to back in March, BEFORE Trump scuttled it by adding the 5 year Sunset clause. NOW, the renewal is 16 years (YES - SIXTEEN) with a review at year 6 to see if it should be renewed for another 16 years at that time (making it a 22 year deal). This is pretty much everything Canada wanted back in March - maybe even better given the change in heart on the Sunset clause (eg - not extended to 7, or 10, or 12 but to SIXTEEN). Of course, there may be give backs somewhere else that will leak out later. But the sunset clause is gone.
Also - Trump is talking about the deal being signed.. No it has NOT been signed. It is a tentative agreement. The "Art of the Deal" from Cadet Bone Spurs. LOL!
Also - Trump is talking about the deal being signed.. No it has NOT been signed. It is a tentative agreement. The "Art of the Deal" from Cadet Bone Spurs. LOL!
It's funny, but with respect to NAFTA, Canada and the US have a largely balanced trade sheet. Canadian workers don't work for 2 dollars an hour either. Jobs are not leaving the USA for Canada, yet they are leaving the USA for Mexico.
Yet Trump brays away about Canada this and Canada that and continually threatens this country with tariffs and the like.
Further cementing my take on Trump that he's a fucking moron.
The only thing that does surprise me is the Mexicans doing an end run around Canada after Canada did the right thing and said that we would not do a deal without Mexico. THAT is disappointing. But Trump being a moron yet again? That's just par for the course.
Yet Trump brays away about Canada this and Canada that and continually threatens this country with tariffs and the like.
Further cementing my take on Trump that he's a fucking moron.
The only thing that does surprise me is the Mexicans doing an end run around Canada after Canada did the right thing and said that we would not do a deal without Mexico. THAT is disappointing. But Trump being a moron yet again? That's just par for the course.
Well said. From my initial take on the Mexican agreement, it's not that far off the original NAFTA deal with most of the politically motivated US items removed. Allot of Trump rhetoric for little actual gain.
I was getting tired of Trumps yahooing about Canada's protected dairy industry supported by subsidies. Many US states also subsidize their milk and farming industry at almost 2X the rate per farmer than Canada. In addition there are lower safety and processing standards on many US milk byproducts. Canada has always said, meet our standards, you are free to market your products in Canada.
As with all Trump "deals" you have to ignore his pronouncements and look at the substance. Typically as with the SK deal and the EU deal there was very little of any substance. just some lip service and conforming prior agreements and understandings. I suspect that thie will be the same. Much ballyhoo by the PGOTUS and very little substance to show for it.
Oh, man.... just caught Kudlow on CNBC talking about the "deal" and it was hilarious how his voice kept rising with every statement. Every time he talked about Canada, his voice rose at the end of the statement like even he couldn't believe what he was being asked to say. If you can catch a replay of it, watch. A far cry from his "Canada stabbed us in the back" rhetoric before he went into drug rehab... ooops I mean before he had a "heart attack". When asked about the 90 day window, he deflected that he isn't a trade lawyer... LOL - You're not even a trained "Economist", Larry!!
Man, what a lilly livered opinion. The US needs Canada. Good luck passing a net new act in Congress the US-Mexico act, vs the NAFTA Renwal Amendment. People like you are EXACTLY the types of chumps that Trumps tactics work on. Firstly Canada ALREADY has a bilateral trade agreement with Mexico through the TPP, secondly Mexico will NOT want to deal with the USA on its own without Canada...they tried that before and lost Texas. I did not hear about the dispute system but it looks like the US caved on the sunset clause. Trump needs a trade win big time. Canada has its list, the US has our list. Trump will likely not have a majority after this election so GOOD LUCK repealing the NAFTA ACT with a hostile congress.
Canada has no subsidies on dairy, we use supply management i.e the tax payer pays more for milk. The US subsidizes to the tune of 20B+ a year. This is why the smaller farmers are being wiped out and near bankruptcy.
It's only Tuesday tomorrow. They should make Trump wait another day at least. Also - there's probably room to get the steel and aluminum tariffs eliminated since all it does is hurt both countries. Not that Trump realizes this - but hopefully his negotiators and US business leaders will tell him (slowly) so that he'll understand. If they make it seem like it was his idea to remove the tariffs, Trump will jump all over it. Hell, he and his supporters are so out of it, he could celebrate the removal of the punitive tariffs and declare a major victory when NAFTA is signed as a result and his base will eat it up.
"Canada Just Got Played": How Mexico Stabbed Canada In The Back
In what was the biggest economic news of the day, Donald Trump concluded bilateral trade negotiations with Mexico, a deal which he called the US-Mexico Trade Agreement ( profiled previously )
and which will replace the trilateral NAFTA which has - for now at least - been scrapped until Canada also comes to the negotiating table and hammers out an agreement with the US (read: concedes), from a position of weakness and virtually no negotiating capital.
There were some odd twists in the announced deal, for example the agreement on the "sunset clause", which as some pointed out is strange as it is a "trilateral matter" - i.e., one which would involve Canada - and it was unclear how it squares with the U.S.Mexico pledge that their talks were purely on bilateral issues.
Confirming that Trump was engaging in some good old "divide and conquer", was the announcement from a White House official that, if Canada doesn't agree to a renegotiated NAFTA, it will go ahead with a two-way deal with Mexico, although another official claimed that splitting up the negotiations is "standard practice and not about squeezing Canada."
That may not have been exactly true because even though Mexico’s foreign minister Luis Videgaray said it’s necessary for Canada to be part of the deal, he then said that if a trilateral Nafta deal with Canada is impossible, a bilateral agreement between the U.S. and Mexico would also be acceptable.
At this point the alarm bells went off, and as Globe and Mail correspondent Adrian Morrow said,
" it looks like the U.S. and Mexico went far beyond bilateral issues and agreed to a pile of trilateral stuff without Canada." He also noted that while it was unclear whether any of the negotiated terms were okay with Canada, "it puts enormous pressure on Ottawa to agree or hold up the deal."
Furthermore, Morrow points out that unless Canada already agreed to these trilateral issues — sunset compromise, IP etc. — via its back-channel with Mexico, "the U.S. and Mexico have just massively cranked up the pressure."
In other words, Mexico just stabbed Canada in the back in order to get a deal with the US on preferential terms to Canada, just as Trump desired, and in vivid demonstration of applied game theory in practice.
Adding pressure on Canada, Morrow quoted Videgaray who said that Mexico’s deal with the U.S. is a "comprehensive" agreement, and warned that if Canada doesn’t reach a deal this week, it will be much harder for Ottawa to negotiate any changes to what’s already been agreed.
Which is a not very subtle ultimatum to Canada to get on board or lose any leverage it may have; and although Videgaray tried to wash his hands and said that Mexico can’t control state of relationship between U.S. and Canada, the message was received loud and clear.
Here Morrow makes two key observations: "because of U.S. trade law, it would be very difficult for the U.S. and Mexico to do a bilateral without Canada at this point," but confirming the dagger in the back interpretation, "it looks like Mexico is helping Trump turn the pressure up on Canada. They agreed a nearly-complete deal without Canada at the table" something which Videgaray confirmed saying today is a good day for Mexico, U.S. relations.
Turns out that the art of the deal does work on occasion.
Meanwhile, although it is possible that there’s a secret Canada-Mexico understanding here, if there isn't, "it’s hard to see this as anything other than Canada getting played", Morrow wryly observes, and adds that "Mexico is blowing up the Canadian spin that Mexico and the U.S. weren’t agreeing anything Canada needed to be at the table for."
As a final point, much of what was agreed today was "style over substance", as the substance of the deal (mostly) doesn't look that bad for Canada: Mexico gave up more with its concessions on autos. But as the Canadian journalist cautions, "this is definitely not how Canada would have chosen to negotiate, cut out of talks and now pressured from two sides to agree a deal in a week."
So what does being stabbed in the back by Mexico mean for Canada? Morrow concludes that Ottawa will "probably spend all of its negotiating capital this week trying to keep Chapter 19, which Mexico has apparently agreed to scrap, nevermind trying to defend on any of the other things it won't like in the U.S.-Mexico deal."
Said otherwise, Mexico made some concessions but kept its US market exposure, even as Canada is now cornered and has virtually no leverage or political capital left.
The winner from today's deal?
https://www.zerohedge.com/news/2018-08-27/how-mexico-just-stabbed-canada-back
