U.S. Boosts Credit Line to Mexico in Gesture of Ties

10/17/2018 – Wall Street Journal

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Source: Edgard Garrido/Reuters

The U.S. is boosting the size of a credit line available to Mexico in times of need, part of a largely symbolic display of close ties as the countries prepare to sign a new version of the North American Free Trade Agreement.

U.S. Treasury Department officials said Wednesday they would triple the size of a credit facility known as the exchange stabilization agreement, potentially allowing Mexico to borrow up to $9 billion, compared with $3 billion under a previous agreement when the original Nafta came into force. Mexico also has a $3 billion line with the U.S. Federal Reserve that isn’t expected to change.

The size of the credit program, which comes in the form of a temporary swap line, is small compared with Mexico’s economy. Mexico already has a so-called flexible credit line of up to $87 billion with the International Monetary Fund that hasn’t been used. Mexico has previously drawn on the Treasury credit program in the aftermath of its economic crisis known as the Tequila Crisis in the 1990s. Treasury officials say there is no current indication that emergency funding is needed in Mexico, which has $173 billion in foreign-currency reserves.

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The loyalty oath nestled inside the new NAFTA

10/3/2018 – Politico

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Daderot/Wikimedia Commons

THE LOYALTY OATH NESTLED INSIDE THE NEW NAFTA: The fine print of the new trade agreement that the U.S. struck with Canada and Mexico includes a warning — one that the White House hopes will help the North American triumvirate unite against China.

 

Buried within the USMCA deal is a provision that requires any member of the pact to give three months’ notice to its partners if it launches negotiations with a non-market economy, which the United States considers China to be. The stipulation — which bears President Donald Trump’s fingerprints — means that if any of the North American countries enters into talks with China or another similar economy, the new three-way U.S.-Mexico-Canada deal can become a bilateral one.

It also means that when it comes to the growing trade war with China, the U.S. is seeking to keep Canada and Mexico on its side.

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Trump’s USMCA delivers big wins to drugmakers, oil companies and tech firms

10/3/2018 – Washington Post

thermometer on medical pills
Photo by Pixabay on Pexels.com

A handful of major industries scored big wins in President Trump’s North American trade agreement — at times at the expense of ordinary consumers in the United States, Canada and Mexico.

The winners include oil companies, technology firms and retailers, but chief among them are pharmaceutical companies, which gained guarantees against competition from cheaper generic drugs.

The gains underscore the benefits U.S. industry will be seeking, and the pressure it will exert, as the Trump administration continues rewriting trade deals with other countries and regions.

Lobbyists for several industries said they hoped the U.S.-Mexico-Canada Agreement, or USMCA, would serve as a yardstick for future U.S. trade deals, including any involving China.

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U.S. Stocks Jump With Peso, Loonie on Trade Pact: Markets Wrap

10/01/2018 – Bloomberg 

bright-business-chart-210607.jpgU.S. stocks rose toward records and the dollar slipped with Treasuries after negotiators agreed to a new version of the Nafta trade pact. The Canadian dollar and Mexican peso gained.

The S&P 500 Index climbed on the first day of the fourth quarter. General Electric Co. surged after replacing its chief executive, while Tesla Inc. ralliedafter Elon Musk settled with regulators. The loonie and peso each jumped 0.7 percent versus the dollar. Oil drifted higher on concern over a slowdown in U.S. drilling. Treasury 10-year yields climbed to 3.08 percent.

A measure of confidence returned to markets after American and Canadian representatives announced a trade deal to be known as the U.S. Mexico Canada Agreement, making modest revisions to the old Nafta framework. Political drama in Washington still swirled around Donald Trump’s Supreme Court nominee, but investors remained focus on a spate of corporate news and economic data due this week.

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Canada-US Reach Deal to Stay in Trade Pact With Mexico

10/01/2018 – The New York Times

Canada-MexicoCanada was back in a revamped North American free trade deal with the United States and Mexico late Sunday after weeks of bitter, high-pressure negotiations that brushed up against a midnight deadline.

In a joint statement, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said the agreement “will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.”

The new deal, reached just before a midnight deadline imposed by the U.S., will be called the United States-Mexico-Canada Agreement, or USMCA. It replaces the 24-year-old North American Free Trade Agreement, which President Donald Trump had called a job-killing disaster.

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NAFTA’s bendable deadline

09/24/2018 – Politico 

33645221874_2dfa78ab68_kNAFTA’S BENDABLE DEADLINE — We’ve all heard about the Sept. 30 deadline to reach a new NAFTA deal — because, according to U.S. fast-track law, the text needs to be publicly available for 60 days before leaders can sign it, and Mexico’s president leaves office on Dec. 1. Well, it turns out that deadline might be more flexible than advertised. We rounded up expert opinions and the overwhelming consensus is that, if Congress agrees to add Canada after Sept. 30, time is relative — not only in theoretical physics, but also in congressional procedure.

What’s the holdup? The U.S. mostly blames dairy for holding up a NAFTA deal. But a senior Canadian official tells POLITICO that dairy isn’t even in the top four sticking points anymore. He even ranks the outstanding irritants in order: He says it’s 60 percent the Chapter 19 arbitration system, 30 percent exemptions from Section 232 national security tariffs, and 10 percent de minimis online shopping rules and non-market economy provisions.

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Mexico Will Seek Deal With Canada if NAFTA Talks Fail: Lopez Obrador

9/21/2018 – New York Times

Mexico's President-elect Andres Manuel Lopez Obrador speaks during a rally as part of a tour to thank supporters for his landslide victory in the July 1 election, in Mexicali
REUTERS/Cristian Torres

MEXICO CITY — Mexico’s incoming government will pursue a bilateral deal with Canada if talks to overhaul the North American Free Trade Agreement falter, Mexican president-elect Andres Manuel Lopez Obrador said on Friday.

 

After more than a year of talks to modernize the NAFTA trade pact between the United States, Mexico and Canada, the United States and Mexico reached a side deal in late August.

Days later, Canada began negotiating with the United States to close a deal on the 24-year-old trade pact. But the talks have hit an impasse over U.S. threats to impose tariffs to Canadian auto exports.

“We would like the government of the United States and the government of Canada to come to an agreement so the treaty can be trilateral, as it was originally signed,” said Lopez Obrador, a veteran leftist who takes office in December.

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