NAFTA 2.0’s Poison Pill For China Will Turn Out To Be A Dud

10/16/2018 – Forbes

44139464355_bc8fdde513_z.jpgHarry G. Broadman

The victory proclaimed by the Trump Administration for its renegotiation of a “modernized” North American Free Trade Agreement (NAFTA) is a hollow one. Despite many months of wrangling with our closest neighbors to the North and South of us—our second and third largest trading partners—in fact, few substantive changes have been introduced to the 1994 pact.

That hasn’t stopped the White House from touting the deal. Why?  Because Mr. Trump and his trade team see NAFTA 2.0 as the model to tame nations outside our hemisphere—especially the use of it as the vehicle to proliferate a poison pill lying at the heart of the agreement the U.S. wants to be deployed to corner China and clip its wings from engaging in pernicious trade practices.

But there are two fundamental barriers to this scenario playing out.  First, Washington will find it tough going to sell this framework to countries with whom there isn’t a pre-existing agreement similar to NAFTA to be amended.  Second, as a practical matter, the U.S.-inserted Chinese poison pill will turn out to be of little therapeutic value, not only in failing to coerce other countries to exercise this provision but to actually induce changes in Beijing’s trade policy conduct.

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United States Seeking Mexican Steel Export Quotas: Negotiator

10/16/2018 – The New York Times

cargo-cargo-containers-containers-906982The United States is seeking to impose quotas on Mexican steel exports as part of a negotiation to remove metals tariffs, the chief trade negotiator of Mexico’s incoming government said on Monday, adding the issue needed to be resolved within weeks.

The administration of U.S. President Donald Trump imposed the tariffs on Canada and Mexico in June, citing national security reasons. Although the three countries agreed a renewed trade deal earlier this month, the measures remain in place.

Jesus Seade, who represented Mexico’s President-elect Andres Manuel Lopez Obrador in the wider trade talks, said the current Mexican government was leading the metals talks but that he had spoken to U.S. Trade Representative Robert Lighthizer on the matter.

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Trump’s silent victory in USMCA

10/11/2018 – Politico 

16652891876_be2e947077_z.jpgTHE NEW SOVEREIGN — New and unprecedented forms of American power may have just been entrenched in the U.S.-Mexico-Canada Agreement, in a series of little-advertised negotiating achievements by the Trump administration. Alex reports that at least six provisions in the USMCA give the U.S. the power to scrutinize, micromanage, or punish its neighbors’ trade policies. To date, only one has drawn any significant public attention — language that makes it harder for Canada and Mexico to strike a trade deal with China. But Washington has also demanded and received the right to scrutinize how the neighbors are design dairy policy; stop third-country imports from evading duties; fight counterfeiting; and apply anti-corruption laws. Additionally, the deal arguably enshrines the U.S.’s unorthodox new use of Section 232 national-security tariffs in a trade agreement, by specifying modest new limits on how they’re used. A former U.S. State Department official concludes the Trump administration has “deputized” Canada and Mexico in its “war on globalism.”

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The new NAFTA isn’t done yet

10/10/2018 – Politico 

asian-builder-china-33266The newly drafted trade agreement between the United States, Mexico and Canada still has multiple details that need to be worked out and includes a provision aimed directly at China that has angered leadership in Beijing.

On the latest POLITICO Money podcast, POLITICO Pro Canada’s Alexander Panetta breaks down exactly what is in the revamped NAFTA deal, known as the “U.S. Mexico Canada Agreement,” and the legislative and political challenges it still faces.

South China Morning Post U.S. correspondent Owen Churchill also explains how Beijing is reacting to the USMCA and where the trade war between the U.S. and China is headed next.

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The 5 surprising things about the new USMCA trade agreement

10/09/2018 – The Washington Post 

apples-business-buy-95425There’s a new U.S.-Mexico-Canada trade agreement after more than a year of high-stakes drama. President Trump’s fingerprints are all over the deal, announced Sept. 30, a renegotiation of the North American Free Trade Agreement (NAFTA), which took effect in 1994.

Trade deals typically aim to boost commerce among countries. What’s different about the U.S.-Mexico-Canada Agreement (USMCA)? Trump’s signature innovations showcase new attempts to make this type of deal result in less trade, not more. Here are four novel, trade-restricting elements.

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How Mexico and Canada saved NAFTA

By Ernesto Zedillo
10/09/2018 – Politico 

downloadBack in July, it would have been impossible to predict that the talks to renegotiate the North American Free Trade Agreement (NAFTA) would end as they did, first with a deal with Mexico on Aug. 27 and then with Canada on Sept. 30. Practically up until those dates, the United States had made outlandish demands, and while we will probably never know what motivated it to move away from its most recalcitrant positions, the important fact is that it did. Mexico and Canada did not cave to the U.S. government’s pretensions and preserved most of the important features of the old deal while the United States backed down.

Many of the U.S. trade representatives’ demands were so unreasonable that it gave credence to the idea that what the U.S. government really wanted was to get a deal that, far from promoting, would destroy trade and investment among its NAFTA partners. Yet, the Mexican and Canadian negotiators repeatedly expressed firmly and credibly that they would rather take the unilateral termination of NAFTA by the United States than sign an agreement that would have the same practical consequence.

Take, for example, the insistence on a sunset clause that would automatically end the new trade agreement every five years unless the three governments agreed otherwise. It was a feature that would have precluded the certainty for investors that these deals are supposed to provide. The negotiators settled for a rather convoluted formula, but one that at least avoids the sudden death of the agreement and makes certain it has an extended life.

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Canada relieved trade deal done, won’t forget Trump attacks

10/04/2018 – The Washington Post

34779883325_fe9802e904_k.jpgU.S. President Donald Trump vowed to make Canada pay after Prime Minister Justin Trudeau said he wouldn’t be bullied in trade talks. Trump called Trudeau “weak” and “dishonest.” He threatened tariffs on cars and slapped them on steel.

The unprecedented attacks on America’s closest ally left a bitter taste. But Canadians mostly feel relieved after reaching a new trade agreement with Trump. Many said it could have been a lot worse. Canada avoided auto tariffs and maintained access to the all-important American market.

The U.S. made few, if any concessions, while Canada provided more access to its dairy sector and allowed Washington to possibly prevent Canada from reaching a free trade deal with China. Canada also was not able to remove steel and aluminum tariffs.

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