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

10/17/2018 – Wall Street Journal

im-31448
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.

Read more…

Advertisements

The loyalty oath nestled inside the new NAFTA

10/3/2018 – Politico

china

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.

Read more…

Risks behind the new NAFTA

10/3/2018 – Politico

larry kudlow
Image of Larry Kudlow. Source: Pablo Martinez Monsivais/AP Photo.

The new trade deal between the United States, Mexico and Canada improves on NAFTA in many ways but presents potential risks to automakers, senior White House economic adviser Larry Kudlow acknowledged in an interview featured on this week’s POLITICO Money podcast.

 

“I know there is some grousing around,” Kudlow said Tuesday of concerns raised in the auto industry that the increased requirements for North American content in cars and trucks could drive up prices or force production overseas. “The cost issues, let’s look at it, I’ll say a maybe. It’s very important to the president though.”

Kudlow, director of the National Economic Council, added that content and wage provisions in the auto section of the new agreement were a “must” for President Donald Trump. “We didn’t want to lose any more jobs. This was an America first deal.”

Read more…

Tariffs That Send a Political Message

10/3/2018 – New York Times

alcohol alcoholic background beer
Photo by Pixabay on Pexels.com

President Trump may have been overstating things when he argued from a United Nations podium last week that the Chinese were going after American farm products to hurt his political base because “they do not want me or us to win.”

But China clearly would like to send a signal to rural American voters.
Mapping the counties that voted for Mr. Trump in 2016 and those affected by China’s tariffs shows the extent to which Trump voters’ jobs rely on the products being targeted. Beijing hopes it can convince those voters — and their elected representatives — that the president’s trade war could hurt them.
Over the summer, the Chinese took aim at Mitch McConnell, the Senate majority leader. In his home state, Kentucky, 18,000 jobs depend on whiskey. So they put a 25 percent tariff on it. Representative Paul D. Ryan, the House speaker, is from Wisconsin, a leading producer of cranberries. So cranberries were added to the list, for good measure. And China went after pork and soybeans, two of the leading farm products in Iowa, home of Charles E. Grassley, a powerful member of the Senate Agriculture Committee.

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.

Read more…

Trump Renames NAFTA, But What’s So Great About New Trade Deal

10/02/2018 – Forbes 

booth-branding-business-264636POTUS got a much-needed win on trade.

President Trump delivered on his campaign promise yesterday to scrap the North American Free Trade Agreement into something more friendly to American manufacturing, which means more support for blue collar workers.  Trump’s new trade deal is called the U.S. Mexico Canada Agreement. NAFTA has become the USMCA.

But beyond Trump’s penchant for doing away with his predecessor’s signature policies (NAFTA was Bill Clinton’s) and rebranding them like a golf course with his logo on it, what’s so great about this latest trade agreement? The market likes the thought of it, anyway. The Dow jumped over 200 points when the headline hit that Canada and the U.S. struck a deal at zero hour. After hours saw slight sell-off across the board.

Nobody knows the full makeup of the agreement so far.

Read more…

 

What Democratic control of the House means for NAFTA

09/29/2018 – Politico

285083710_fe3883e590_b.jpgNAFTA HOT SEAT — What a day to talk trade. Tune in at 8 a.m. ET today to catch the livestream of our conversation with Canada’s U.S. ambassador, David MacNaughton, to celebrate the launch of Pro Canada. This is happening as the U.S. and Canada hurtle toward a self-imposed U.S. deadline this week to reach a NAFTA deal, with both sides sounding gloomy about the prospects. Even if there is an agreement, there’s a risk it could turn into a high-stakes flashpoint between the White House and Congress. Pro Trade’s Megan Cassella reports for Pro Canada subscribers how Democrats could be the Trump administration’s next NAFTA hurdle if they seize control of the House in the November midterms.

“Navigating the New Washington,” our live launch event from the University of Toronto’s Munk School of Global Affairs, will also feature a briefing by a group of POLITICO reporters, including your favorites here on Team Pro Canada. We’ll talk about the U.S. midterm elections and what comes next. We’re also curious to know, given Megan’s story, whether the Canadian government has a plan to get a potential NAFTA deal through Capitol Hill. You can also catch the event on Canada’s Cable Public Affairs Channel, CPAC-TV.

Read more…