Shaky NAFTA deal threatens Navistar’s Mexico-made exports to world

10/9/2017 Reuters

Less than half the trucks exported from Navistar’s (NAV.N) mammoth Escobedo plant in Mexico are sold in North America but the factory’s success remains tightly tied to the uncertain future of the region’s NAFTA free trade deal.

Navistar’s Mexican factory, now the U.S. company’s largest worldwide, exports to around 30 countries and sells less to the United States than competitors such as Daimler AG, one of the top three truck-makers in Mexico, which sends three-quarters of its Mexican-made commercial vehicles north.

But Navistar’s reliance on tariff-free imported parts shows why even Mexico manufacturers that have diversified their customer base away from the United States still fear U.S. President Donald Trump’s threats to scrap NAFTA.

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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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NAFTA Negotiators Accuse US of Pushing Policies Mexico and Canada Will Never Agree With

10/2/2017 PanamPost

The United States continues to propose controversial ideas during NAFTA renegotiations, which could jeopardize any chance of reaching a final deal within the stipulated time frame, according to officials from both Canada and Mexico.

The US’ proposals for public procurement, textiles and fresh produce, those officials said, are imposing a “red line” with little legitimate chance of resulting in an agreement between the three countries.

According to the officials, who spoke on condition of anonymity, the third round of NAFTA renegotiations — which took place in Ottawa — was a scene to numerous negative incidents, especially compared to previous meetings. Officials reportedly expect additional confrontation to take place as a result during the fourth negotiation meeting, set to be held in Washington, D.C. between October 11 and 15.

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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.

Read the publication…

Survey: Economists see no gain from NAFTA renegotiation

9/24/2017 The Seattle Times

Most business economists expect the Trump administration’s efforts to renegotiate the North American Free Trade Agreement will make no difference to the U.S. economy or cause harm.

The National Association for Business Economics survey of 47 economists found that one-third think the renegotiation will have no impact, while one-fifth think it will harm the economy slightly. Seven percent see its impact as strongly or moderately negative.

One-quarter said the renegotiation will be slightly positive while 9 percent said it would be moderately positive. The survey covered economists who work for large companies, trade associations, consulting firms, and universities.

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Canada Nafta Negotiator Sees More Movement Than Labor Leader

9/24/2017 Bloomberg

Talks toward reworking the North American Free Trade Agreement are progressing well, even though the U.S. hasn’t made detailed proposals in some of the most divisive areas, Canada’s chief negotiator said.

Steve Verheul, speaking to reporters Sunday in Ottawa during the third round of talks, said the tone remains constructive and there’s no signal the U.S. will walk away, though he said several U.S. proposals have yet to be revealed.

“We’re making good solid progress,” Verheul said, declining to commit to meeting the December target for a deal. “The endgame is always the hardest part and impossible to predict.”

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Push for Nafta Overhaul May Fall Short, U.S. Negotiator Says

9/18/2017 The New York Times

The top United States trade negotiator said Monday that it was unclear whether Canada, Mexico and the United States could reach a deal to overhaul the North American Free Trade Agreement within the ambitious timetable set by the Trump administration.

In remarks ahead of a third round of talks beginning on Saturday in Ottawa, Robert Lighthizer, the United States trade representative, said negotiators were “moving at warp speed, but we don’t know whether we’re going to get to a conclusion, that’s the problem.”

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