Trump Announces Deal with Mexico, "We’ll See" About Canada

Mish

"Big deal looking good," says trump as he drops the name NAFTA due to "bad connotations".

The Wall Street Journal reports Trump Hails U.S.-Mexico Trade Pact, Says ‘We’ll See’ With Canada

> President Trump said he had reached an agreement with Mexico to rewrite portions of the quarter-century-old North American Free Trade Agreement and threatened to remove Canada from the three-country accord if Ottawa failed to make concessions.

> Mr. Trump said the agreement should be renamed the U.S. Mexico Free Trade Agreement, dropping the Nafta name because it had “bad connotations” for the U.S. It wasn’t immediately clear if the Mexicans—let alone the Canadians—would agree to any renaming of the regional trade pact.

> The core of the deal with Mexico overhauls rules for building cars across the continent, aimed at ensuring a greater portion of the vehicles are built in the region, and more locally-produced steel is used. The accord also has new provisions aimed at raising wages and offering new rights to Mexican labor unions. Those measures are aimed longstanding complaints by U.S. Nafta critics that American workers have been hurt by having to compete with cheaper labor across the border.

> The U.S. side said the deal would also beef up regional content requirements for chemicals, steel intensive products and other industrial materials. The U.S. side also touted moves to strengthen rules governing supply chains in the textile and apparel industries.

> President Trump dialed the Mexican President Enrique Peña Nieto on the Oval Office speaker phone, and congratulated him on the deal. Mr. Nieto responded, in part, by saying he hoped Canada would remain part of the agreement.

Nebulous Details

The devil is in the details, and we have scant few of them.

One thing we do know is the Mexican president pushed for higher minimum wages so that would have happened anyway.

Whatever the deal is, Mexico will not be paying for the Wall. That aside, trade is a good thing, so any deal is better than no deal.

Mexico will start buying US soybeans again, and the US will resume buying cars made in Mexico. We are essentially back to where we were, with a few little extras throne in.

Why We Can't Call It NAFTA

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This is all pretty nebulous but the essence of this deal could have been made without all the brouhaha.

Meanwhile, please don't call it NAFTA due to "bad connotations".

Mike "Mish" Shedlock

Comments (7)
No. 1-5
2banana
2banana

Short negotiations lesson for Mish.

Rolling over and playing dead is not a negotiations tactic.

Getting a good small deal now may later set up a great big deal later.

Fear of missing out (Canada, EU, China, etc.)

Stop with sour grapes of "Mexico is still not building the war." Part of the tariffs could build the wall. A tax on sending money to Mexico could pay for the wall. Like you said, you have yet to see the details.

It still may happen unlike "Thr average medical policy will go down $2500" and "If you like your doctor you can keep your doctor" and "Illegals won't be able to use government provided health care" and...

Kinuachdrach
Kinuachdrach

This is progress -- baby steps, but still progress. NAFTA never was a Free Trade agreement. It was a heavily-managed trade agreement -- so changing the name now is simply an application of Truth in Advertising.

A true free trade agreement would be very short: (1) No tariffs on anything. (2) No non-tariff barriers or subsidies on anything.

Instead of that kind of short agreement, the Canadians are whining about Chapter 19 of the defunct NAFTA deal. Chapter 19! That tells you all you need to know about how anti-free trade NAFTA was.

pi314
pi314

I am pretty certain this is a net gain for the US. Reading this piece, however, you would think that Trump has accomplished nothing in this trade deal proposal. Btw, the current Mexican president would likely have resisted the minimum wage hike demand. It is the incoming president who is pushing for big minimum wage hike. Your statement that "the Mexican president pushed for higher minimum wages so that would have happened anyway" has no factual basis.

Zardoz
Zardoz
(deleted message)

Gotta lower the bar for our special needs president.

ML1
ML1

I hope Trump demanded that Mexico agrees as part of the new trade deal to the following:

1. Stopping all migrants now going thru Mexico and coming to USA to seek asylum by stopping their movement through Mexico and giving them the option of asking asylum in Mexico from Mexican government OR returning back home to Guatemala, Honduras, El Salvador, Nicaragua etc.

2. Stopping the flow of drugs to USA by building a wall on the southern Mexican border which will also make Mexico itself much more peaceful and lower influence of cartels and also make fulfilling 1. requirement easier since wall on the southern border of Mexico will take care of most migrants so they stay at home.

3. Mexico agrees to pay the 25 billion the wall on the border of USA-Mexico costs since Mexico benefits 100's of billions from trade with USA.

IF Trump or Trump's trade negotiators did NOT require these 3 things as a condition for the trade deal then Trump and his trade negotiators are all INCOMPETENT...


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