Secretary Ross and the Commerce Department Wrongly Conclude NAFTA Rules are Bad for the U.S.

10/4/2017 Forbes

Flag_of_the_North_American_Free_Trade_Agreement_(standard_version).svgBy Luis de la Calle

U.S. Secretary of Commerce Wilbur Ross published an important op-ed (These NAFTA rules are killing our jobs) in the Washington Post this past Friday, September 22nd.  In it, he claims to offer a serious analysis to show that the trade deficit with Mexico and Canada and lower U.S. value-added in Mexican and Canadian U.S. imports are proof the United States is losing under the North American Free Trade Agreement (NAFTA).  Secretary Ross aims to end the “loose talk” about industrial integration for automobile production in the region.

The problem with the article and the U.S. Department of Commerce paper it is based on is that they cherry pick statistics out of the March 2017, Trade in Value-Added (TiVA) database by the Organization for Economic Cooperation and Development (OECD), in an attempt to confirm the Trump’s administration bias that trade deficits are bad and lead to job losses.  This wrongheaded approach (the trade deficit with Mexico does not harm the United States) does a growing disservice to the comprehension of the importance of international trade for the economy and further politicizes the issue. More worryingly, it shows civil service officers can be influenced so that their analysis comports with White House views on trade.

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New Publication | The NAFTA Negotiations: A Mexican Perspective

By Luz Maria de la Mora Sanchez

The launching of the North American Free Trade Agreement (NAFTA) negotiations on August 16, 2017 begs a serious and thorough discussion given what it is at stake for the three countries in terms of trade, investment, economic integration, competitiveness, jobs, shared production, and innovation. While a NAFTA modernization has been long overdue, this renegotiation was motivated by the wrong reasons; i.e. to address the United States’ concern regarding its trade deficit with Mexico and to return lost jobs to the U.S. manufacturing sector.

When the NAFTA negotiations were launched in Washington, DC, United States Trade Representative (USTR) Robert Lighthizer’s remarks underscored “the huge trade deficits, the lost manufacturing jobs, the businesses that have closed or moved” as a result NAFTA.  In sharp contrast, Canada and Mexico framed this process as an opportunity to modernize the Agreement to better respond to the 21st century economy. Canadian Foreign Minister Chrystia Freeland and Mexico’s Secretary of Economy, Ildefonso Guajardo, used their opening speeches to reiterate that NAFTA has benefited the three partners and considered it a very favorable pact. In direct contrast with Trump’s and Lighthizer’s statements, Secretary Guajardo called the NAFTA a “strong success for all parties,” while also stressing that Mexico is not the problem but rather “the solution to the region’s competitiveness.”  Given these diametrically opposing views and goals, Mexico and Canada have a very hard act to play in order to come up with an agreement that responds to their own interests while also addressing the United States’ key concerns.

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The Expert Take | Where is Mexico’s Fight Against Corruption Now?

expert I (2)By Viridiana Rios

The deadliest earthquake since 1985 hit Mexico last week, the second significant earthquake in 2017. With at least 225 victims, the parallels between last week’s earthquake and 1985’s are spine chilling. Both happened on the same day of the year, September 19th, and both have awoken a powerful civilian mobilization to rescue victims from collapsed buildings.

Back in 1985, corruption and violations of the city’s building codes were attributed much of the destruction. Today, an excellent piece by Animal Político has proven that the state of Oaxaca was hit the hardest during the first earthquake of 2017 due to corruption and poor use of tax-payer resources. The entire seismic warning system of Oaxaca had not been operating since January due to the state government’s debts to the service provider. The alerts were either stored in warehouses, or were sold online by private parties. In Mexico City, out of the 7,356 seismic alerts that the city’s government had bought, about 46 percent were never installed and had simply disappeared.

In the face of these events, corruption becomes a humanitarian crisis, rather than just a judicial issue.

Mexico’s organized civil society knows this and, as a result, has recently embraced a vibrant and ambitious agenda to improve the corrupt system. Lawyers have joined efforts with activists to propose to Congress the necessary laws and institutions to effectively prosecute corruption acts and to watch over the legislation’s implementation.

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How Mexico’s Anti-Corruption Fight Went Off-Track

09/18/2017 Americas Quarterly

By Viridiana Rios, Mexico Institute Global Fellow

Eighteen months ago, I wrote in AQ about the success of Mexico’s citizen-driven corruption fight in Congress. Civil society groups, academics and activists had pushed for the rejection of a watered-down anti-corruption bill and instead presented their own, sharpened version of the legislation. This citizen’s bill, called #Ley3de3 (or #Law3of3) promised not only to help identify, punish and prevent corruption, but to do so while promoting collaboration among different federal institutions and citizen groups.

Congress agreed to discuss the bill only after 634,000 citizens signed their support, and approved it only after trying several times to reduce its scope. Passage of the #Ley3de3 thus marked one of the most important breakthroughs for Mexico’s civil society since democratization began in the late nineties.

All of us who were part of this effort knew that it was a first step, but were sure that many more would follow. Little did we know how resistant to outside pressure – from civil society, the media and others – the government would prove to be when it came to cleaning up its act.

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NAFTA Talks Called Opportunity to ‘Lock In’ Mexican Energy Reforms, U.S. Gas Trade

09/11/2017 Natural Gas Intel

The North American Free Trade Agreement (NAFTA) renegotiations are an opportunity to update the 1994 treaty so that it reflects changes in Mexico’s oil and natural gas sector and deepened ties to Canada and U.S. energy markets, according to analysts.

“North American energy markets have changed, and there are the new reforms in Mexico,” BDO Mexico’s Rita Mireya Valdivia Hernandez, a partner in the tax practice, told NGI.  “We need to adapt or modify NAFTA so that it is aligned with what North America is today.”

Talks to hammer out the details of a new NAFTA began in mid-August with the first of seven negotiating rounds scheduled through December. Delegates from the United States, Mexico and Canada met again in early September, while the third round is scheduled for Sept. 23-27.

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Trump wants to restrict trade and immigration. Here’s why he can’t do both.

9/11/2017 The Washington Post

Recently, trade negotiators from the United States, Canada and Mexico concluded the first round of talks to renegotiate the North American Free Trade Agreement. President Trump has made clear that he wants a deal that cuts the U.S. trade deficit— and brings manufacturing jobs back to the United States. Trump also threatened to withdraw from the South Korea-U.S. free-trade agreement (KORUS), citing unfair trade practices and a desire to bring home U.S. jobs.

At the same time, Trump is supporting the Reforming American Immigration for a Strong Economy Act (Raise Act), which would cut legal immigration by 50 percent. And he announced the end of the Deferred Action for Childhood Arrivals program, which could mean the deportation of about 690,000 “dreamers” — immigrants who came into the country illegally as children.

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You Won’t Like Mexico When It’s Angry

09/11/2017 Politico

President Trump’s insults are pushing the Mexican political system into dangerous territory.

In his landmark 1985 book, Distant Neighbors, Alan Riding, then the New York Times’ Mexico City correspondent, wrote that the Mexican president, in the days of the one-party state, was all powerful except for two things he could never do: 1) reelect himself (there’s a constitutional one-term limit for Mexican presidents) and 2) bring Mexico closer to the United States.

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