NAFTA Becomes TRumpCA

Trump Tweaks NAFTA and Not for The Better – USA Today October 2, 2018

Trump Tweaks NAFTA and Not For the Better

Why would the president make such a big deal out of a new trade proposal with Mexico and Canada that Congress might not even approve?: Our view


President Donald Trump announced his new North American trade deal with much fanfare. It was, he said, “the most important trade deal we’ve ever made — by far!” And it would replace what he described as “the worst trade deal ever … the job-killing disaster known as NAFTA.”

What a Trumpian moment this was. The deal to succeed the North American Free Trade Agreement, and all the pomp and circumstance surrounding the announcement, was Trump in microcosm.

Trump has spent much of his presidency breaking things, both to garner the attention he craves and to make the point that the previous presidents and congresses who made these laws, policies and agreements lacked his brilliance.

In some cases, his plan has been to leave the detritus strewn about the playroom floor like Lego blocks and dismembered GI Joe parts. With North American trade, his plan is to reassemble the parts in more or less the same order and claim he has created something new and marvelous.

SIERRA CLUB: NAFTA 2.0 remains hazardous to our health

Some observers will find NAFTA 2.0 — which Trump has rebranded USMCA, for the United States-Mexico-Canada Agreement — modestly better than NAFTA. Others will find it modestly worse. We find ourselves in the modestly worse camp.

This deal’s big “win” for the United States is an agreement by Canada to remove some protections for its domestic dairy industry. This might mean a lot to American dairy farmers, but not so much for the 99.9% of the country. What’s more, Canada had already agreed to similar language with other countries in Asia and the Americas as part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

The deal is also said to include some protections for U.S. patents and anti-piracy efforts. These reflect changes in the tech world since NAFTA became law in 1994.

In return, the Trump deal includes a number of questionable provisions:

►It would increase domestic content regulations on automobiles. NAFTA stipulated that any vehicle wishing to avoid tariffs would have to be at least 62.5 percent made in North America. The Trump deal would increase the percentage to 75 percent. That could be good for autoworkers. But it will make cars marginally more expensive and could produce unintended consequences, particularly for the growing industry of exporting U.S.-made German and Japanese vehicles.

►The deal continues America’s campaign to get the world to accept 75-year copyrights on creative works such as movies, books and music. This is helpful for Hollywood, but 75 years after the death of a creator (and even longer for some corporate creations) seems a bit extreme.

► The deal includes a sunset clause that will cause it to end after 16 years. For years, American companies have complained about a tax code that is subject to uncertainty. Now they will have the same fears with trade.

For all the hoopla surrounding Monday’s announcement, Trump was quick to downplay its chances in Congress, which must approve the deal for it to take effect. Democrats, who have largely been quiet, will ultimately line up against the measure, he argued. And many Republicans will wonder why they should support domestic-content regulations that are stricter than those they didn’t like in the first place.

That leads to the question of why the president would invest so much time and effort on a NAFTA tweak that might not even be approved. The best answer seems to be that Trump wants something new to put his name on.

Editorial’s Note

I have called this new Agreement TRUMPCA because Donald Trump insists that NAFTA be re-named. So, instead of using the lame name: USMCA – (United States Mexico Canada agreement), it makes more sense to call it TRUMPCA (The Ridiculous Underwhelming Mexico Panamerican Canadian Agreement).

The North American Free Trade Agreement (NAFTA), ratified in 1994, is a trilateral agreement between the USA, Mexico and Canada. It was designed  to eliminate tariffs between the countries. By eliminating the import tax, United States corporations found that it became extremely profitable to move their companies to another country, like Mexico, which had lower wages, expenses, benefits – produce their products in Mexico and move it across the Southern Border and sell their products in the US without having that old nuisance-import tax on to the price, therefore, under-cutting US made products. TRUMPCA does nothing to alleviate this.

So, what does TRUMPCA do? Not a whole lot. But there a a few changes, (liking changing the curtain rods in million dollar house) that makes this narcissistic President think that is worthy of a name change:

  • To be called American made, automobiles will need to made with 75% American-made materials versus the previous 62.5% to avoid import taxes. Big whoop.
  • It gives copyright protections to creative works: movies, books and music. Hooray for Hollywood.
  • TrumpCA is temporary – it only lasts 16 years – a typical Republican ploy, let somebody else deal with the mess when it runs out.
  • The new agreement calls for 40 to 45 percent of automobile content to be made by workers who earn at least $16 an hour by 2023. This provision specifically targets Mexico.
  • TRUMPCA has negotiated that US dairy farmers can increase their sales to Canada by 3.6%. Big Whoop.

Now TRUMPCA does nothing to decrease the Trade deficits and the offshoring of US jobs, which is the reason that Trump was supposed to renegotiate NAFTA in the first place. Now, instead of blaming NAFTA for the continued off-shoring to Mexico, we can now blame Trump.

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October 2018


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