By choosing politics over fundamental trade economics Justin and Chrystia from Canada have painted themselves into an isolated position on the renegotiated North American Trade deal. Here’s the basic Canadian conundrum.
The U.S. and Mexico have agreed to manufacturing origination terms; wage and labor improvements; elimination of AG subsidies and non tariff barriers; and removal of all protectionist tariffs – so long as the structural terms of commerce are upheld.
In order for Canada to join the U.S. Mexico deal they would need to:
Each of these five issues, now locked-in and agreed by the U.S. and Mexico are “take-it-or-leave-it” terms for Canada to join. There’s almost no-way, given the politicization of the Canadian plan, for Justin and Chrystia to agree to those terms and keep their fragmented political support base appeased.
Therefore, absent total acquiescence, it is likely Canada will keep their soft-wood lumber subsidies, keep their protectionist Dairy tariffs, keep their banking rules blocking U.S. access, and face a 25% duty on U.S. auto imports – effectively destroying their auto manufacturing sector. Car companies (ex. Toyota) will simply leave Canada and return to building/assembling in the U.S.
Here’s the content from a conference call filling in more details:
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The corporate-owned, Wall Street-controlled, U.S. media are twisting, contorting, and in many cases hiding the consequential details of the U.S-Mexico trade agreement.
The reason for MSM disinformation campaign is quite simple: the deal helps the U.S. middle-class; helps both U.S. and Mexican workers; begins deconstructing the tentacles of Wall Street economic policy; and highlights a major success story for President Trump and the country in general. The UniParty, Wall Street and the agenda of their purchased political class are being dismantled…. All of those interests are furious.
While it is still available, watch the 10 minutes of this report (and interview with U.S.T.R. Lighthizer) from 07:00 to 17:00 to get a generally good idea of how significant a day this is. (prompted, just hit play)
https://youtu.be/Uen12x0jmXA?t=7m
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Earlier today President Donald Trump and First Lady Melania Trump welcomed Kenyan President Kenyatta and his wife to the White House. Two videos and transcripts.
So much good news: WASHINGTON (Reuters) – The trade deal between the United States and Mexico will stand even if Canada does not come to an agreement with the Trump administration in the renegotiation of the North American Free Trade Agreement (NAFTA), Mexico’s foreign minister said on Monday.
“If for any reason the government of Canada and the United States do not reach an agreement, we already know that there will still be a deal between Mexico and the United States.”
~ Mexican Foreign Minister Luis Videgaray (link)
Remember those “private meetings” between Jesus Seade and Robert Lighthizer?
It is said: a picture is worth a thousand words. Cue the audio visual:
The incoming Mexican President, Andrés Manuel López Obrador,(AMLO)’s representative is Jesus Seade. The outgoing Mexican President Pena Nieto’s representative is Mexican Secretary of Economy Idelfonso Guajardo.
Why the joy in Seade and the defeated Guajardo? The answer is in the details:
One of President Trump’s principal objectives in the renegotiation is to ensure the agreement benefits American workers. The United States and Mexico have agreed to a Labor chapter that brings labor obligations into the core of the agreement, makes them fully enforceable, and represents the strongest provisions of any trade agreement.
Key Achievement: Worker Representation in Collective Bargaining
The Labor chapter includes an Annex on Worker Representation in Collective Bargaining in Mexico, under which Mexico commits to specific legislative actions to provide for the effective recognition of the right to collective bargaining.
In direct relationship to the checkbook policy that impacts middle-class Americans the U.S./Mexico trade deal is the biggest win so far in Trump’s presidency. There are such massive ramifications it could take days for anyone to comprehend how the granular details have such massive downstream consequences. The deal is incredibly complex.
At the 30,000 ft level, the deal positions Mexico to retain their current multinational investments, and through a series of sector-by-sector standards on origination the deal simultaneously closes the fatal NAFTA loophole. The agreement makes an economic manufacturing partnership between the U.S. and Mexico; and for assembly products third parties will have to produce parts and origination material within the U.S. and Mexico.
U.S.T.R. Lighthizer has put some details forward:
♦The NAFTA Loophole closure is explained in Summary Form HERE; with emphasis on the Auto-Sector. The key is a 75% part origination level for auto-assembly; and a 40-45% level for parts with a minimum $16/hr wage rate. The source-origination rate (75%) is even higher than all previously forecast negotiation results.
Example of downstream consequences/benefits: German auto-maker BMW recently built a $2 billion assembly plant in Mexico (almost complete). Most of their core parts were coming from the EU (steel/aluminum casting components) and/or Asia (electronics). Now the assembly plant will have to source 75% of the auto-parts from the U.S. and Mexico, with 45% of those parts from facilities paying $16/hr. Result: BMW will need to modify their supply chain and build auto parts in the U.S. and Mexico.
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Promises made, promises kept. The CTH community is in a unique position to understand exactly what has taken place today as President Donald Trump announces the termination of NAFTA and simultaneously announces a bilateral trade agreement has been made between the U.S. and Mexico. This is exactly what CTH predicted. Most, not all, but most of the media are absolutely clueless.
In an Oval Office announcement today President Trump put outgoing Mexican President Enrique Peña Nieto on his speaker phone as the press watched in the Oval Office. U.S. Trade Representative Robert Lighthizer, Mexican Secretary of Economy Idelfonso Guajardo, and the key figure for incoming Mexican President, Andrés Manuel López Obrador (AMLO), Jesus Seade was present for the announcement.
CTH will have much more on the details of the trade agreement. This is the most comprehensive and complex trade agreement in U.S. history. However, in the interim here’s the full video of the announcement (including nuance). ENJOY:
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After the Michael Cohen guilty plea. his attorney Lanny Davis began pitching a claim that the longtime Trump loyalist/lawyer had information Trump knew of the Russian hacking of Democratic emails ahead of time.
Davis said: “I believe that Mr. Cohen has direct knowledge that would be of interest to Mr. Mueller that suggests -I’m not sure it proves- that Mr. Trump was aware of Russian government agents hacking illegally, committing computer crimes, to the detriment of the candidate who he was running against, Hillary Clinton.” And the media ate it up, and put Davis on just about every possible TV show imaginable.
However, in an interview with the Washington Post this weekend, Mr Davis not only walked back that claim, he entirely retreated from it:
(Via Washington Post) An attorney for Michael Cohen, President Trump’s former lawyer, is backing away from confident assertions he made that Cohen has information to share with investigators that shows Trump knew in 2016 of Russian efforts to undermine Democratic nominee Hillary Clinton.