Donald Trump has given Canada an ultimatum: Sign the new trade deal by Friday, or you're out in the cold. Tom Walkom writes:
Canada has been had. The Mexicans and Americans have agreed behind Canada’s back to cut a bilateral deal that would replace the North American Free Trade Agreement.
Justin Trudeau’s Liberal government has been told it can join in, but only if it capitulates to all of Donald Trump’s demands.
Some of what's in the new deal is good for Canada:
Not everything in the Mexico-U.S. deal would be bad for Canada. Indeed, some parts would be positive.
The original NAFTA allowed companies, particularly big auto manufacturers, to relocate their operations from Canada and the U.S. to low-wage Mexico.
To his credit, Trump recognized that this was a job killer for his country. The new Mexico-U.S. deal specifies that at least 40 to 45 per cent of automotive content must come from factories where workers make at least $16 (U.S.) per hour.
The new pact would also tighten so-called rules of origin to ensure that at least 75 per cent of the content in autos sold duty-free under the deal comes from a country that is signatory to the agreement.
That too would benefit Canadian auto workers if Ottawa signed on.
As well, Mexico agreed to another useful Trump demand — the weakening of a NAFTA provision allowing foreign investors to overturn government laws and regulations that interfere with their profitability.
This so-called Chapter 11 provision has been used mainly against Canada. Yet for reasons that it has never fully explained, Ottawa resisted Trump’s efforts to eliminate it.
The Mexico-U.S. deal doesn’t get rid of Chapter 11. But it would limit its scope to firms operating in specific areas such as energy.
But there are some big poison pills:
In particular, the agreement reached by the Mexicans and Americans appears not to include an independent dispute-resolution system for sorting out trade conflicts among the signatories.
Canada has long insisted that this is a must. NAFTA’s precursor, the original 1989 Canada-U.S. Free Trade Agreement, was almost scuppered by Ottawa over U.S. resistance to this demand.
The Mexico-U.S. deal also includes a so-called sunset clause, a date by which the agreement, unless specifically extended, will automatically expire. According to Trudeau, that too is an absolute no-no for Canada.
True, the time frame has been extended from the original American proposal of five years to 16. But the essential problem with the sunset clause — that placing an arbitrary deadline on a trade deal leads to investment uncertainty — remains.
So it's crunch time. Five of Trump's associates have either pled guilty or been found guilty of crimes. There will be more convictions. It's clear that doing business with Trump is bad business.
Justin has proclaimed that Canada will not be pushed around. Will his actions match his rhetoric?
Image: The Cut
12 comments:
Trump seems intent on dismantling our supply-side farming system Owen. Given that there is an election next year, I find it hard to conceive that even a lightweight like Trudeau would capitulate, but I have been wrong before, of course, many times.
Perhaps Justin will take a lesson from his father, Lorne, and show Trump his middle finger.
Trump's deadline is bullsh!t. Like usual, it's all about the show and being a bully.
Congress did not authorize him to negotiate a bilateral trade agreement so a 2 country (US-Mexico) trade agreement won't happen. Trump may think so, but Congress (the current one or a new one in November) won't have it. There are too many northern (including swing) states that depend on trade with Canada.
UU
I think you're right, UU. But I do wonder how many Republicans will bend to Trump's will. I have been shocked by the collapse of the Republican Party.
This sounds like a Trump deal. It's too much window dressing and much too little reflection. For example, what will be the impact on Mexico's economy of having one sector paying wages vastly higher than the remainder of employers? There are so many adverse consequences that could trigger, particularly for local economies. Remember, Mexico is a nation steeped in corruption and now in the throes of raging drug wars.
As for ISDS, why is Canada digging in? Our government apparently has been the main target of NAFTA ISDS provisions. Now that we're having to deal with climate change we should expect a soaking from ISDS claims in response to environmental regulation.
This is less about trade and far more about electoral politics and the glorification of DJ Trump.
Exactly, Mound. As the walls close in on him, he's looking for a shiny ojbect to distract for a little while. The long term consequences of his decisions have never mattered to him.
https://www.vox.com/2018/8/29/17795452/trump-north-korea-war-summit-singapore-promise
This is why no one should trust Trump.
He asks others to negotiate and compromise but does not himself.
He is of 'who blinks first'
The North Koreans and the Chinese realise this , why don't we?
TB
As the link I gave you yesterday showed, on everything from Trade, Environment, Security, the world is moving away from the US.
The "Indispensable Nation" has proven that it's one election away from bug nut crazy.
Republicans are fine with that.
Democrats are just starting to notice that.
Threre's a huge number of structural changes the US needs to make, from electoral reform through to "codifying the norms", if they want to keep their Democracy and have any chance of regaining some of their place in the world.
Some Democrats are starting to realize how F'd up they have allowed their society to become and how much they need to fix. Then there's Chuck Schumer who just traded rushed Judicial Confirmations, giving the Republicans control of the Courts for the next 30 years, for a big bag of empty.
Still, 27% of 'Murkins are fine with the current path.
15% are fine with the current path as long as they can keep power.
48% dont care about politics.
Things are going to get worse before ( they might) get better.
.. last I looked (yesterday) this is not the era of competent or even vaguely coherent 'public service'.. You know, when elected public servants 'represent' the dreams, needs & wishes of the folks who elected them to do so. Funny how a majority government forgets promises.. eh ?
We hear 'fake news' or rigged this, rigged that.. resurrect Energy East, crooked somebody insults, expand dilbit flows (sorry, that's Alberta aka discounted Canadian 'oil') that revised election processes will improve election processes) (??).. you name it, the daily utterings of Andrew Scheer, the whiny twitter binges of Trump, Doug Ford's evangel rush to sex ed raptureland.
Now all the daily rumanations, are to a great extent, reflected, repeated, shortened, adapted.. by main or actual fake news agencies. Oh yes, richochet via Fox News or Post Media etc et al for ever n ever amen.. they are the holy oracle.. or maybe Sara Nuckabee Sanders is or the precious posturing spouter Rex Murphy.. deary me its hard to know who is real and who aint..plus its the divine era of delay litigation strategy.. Imagine North Carolina being slapped by their own federal courts to 'cease and desist' and redraw gerrymandered election areas. So Repukelicans just ignore and appeal, and change the rules flr 5-6 years ! Same in Canada eh? Classic was Harper telling his Minister of Environment, Peter Kent to ignore the mandate re endangered species, while Harper PMO lawyers with a majority behind them, pretzelled existing legistion as per Big Energy's requests.. plus threw billions in subsidy $ at them while defying ourmfederal courts decisions - 5 years of such delays ! Still, we cannot get main media to correct incorrect terms and fly straight .. most main media cannot squeeze out a simplistic 'news' item via web, with correct spelling, grammer or factual basis.
What hope then to get effective info, in broad terms re so called Trade Deals.. Or Education ? The Trump boasts are just that.. but are dully and dimly repeated to the masses.. as well as for political posturing, party bashing or more extreme insulting nonsense, from mealy thugs like Rebel, or The current White House, Air Force One golf shuttle or a golf cart at an endless array of exclusive country clubs. Politics is diseased currently.. a disaster getting worse, daily
I'm afraid you're right, Jay. Things will get worse before -- and if -- they get better. In fact, they could get pretty bloody.
In whatever Trump does, he only sees one winner, T.B., and that's himself. You can't get too chummy with that kind of blackguard.
The Washington Post changed its masthead recently, sal. It now reads, "Democracy Dies in Darkness." Words to -- and for -- the Wise.
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