The US-Mexico trade deal a threat for others, Trump to single out China, Europe

President Donald J. Trump signs Executive Order Promoting Agriculture and Rural Prosperity in America with Secretary of Agriculture, Sonny Perdue, in the Roosevelt Room of the White House in Washington, D.C., Tuesday, April 25th, 2017. It’s questionable though if in the long run the new NAFTA deal leaves the US farmers better off. (Official White House photo by Shealah Craighead).

The North American Free Trade Agreement (NAFTA) between US, Mexico and Canada is reborn. It was discarded and denounced by the American President Donald Trump since the first days of his campaign to conquer the White House, and now it returns almost undamaged, just under another name. Last Monday, after more than one year of negotiations, the US and Mexico concluded a full free trade deal to replace the NAFTA and Canada is expected to forcibly join soon. Despite Trump’s rhetoric against NAFTA during the past few years, the Agreement is to return having undergone just light cosmetic adjustments. Let’s see the details.

The most criticized by the ‘America First’ President provision of NAFTA was the arrangement for cars produced in Mexico and imported to the US. Trump had condemned it as a ‘disaster’ for American workers. Under the previous Agreement, automobiles produced in Mexico by American, German and other automotive companies could be exported to the US without difficulties, if they contained added value of 62.5% created in the NAFTA region. Now, under the new deal, the White House accepted that this percentage be increased to 75%. Understandably this is an insignificant increase, which can be offset by creative accounting. The new arrangement also demands that 40% to 45% of the value of the car be produced by workers earning at least $16 an hour.

Cosmetic modifications

Last but not least, the new deal doesn’t contain a ‘sunset clause’ or automatic expiration as the American President had repeatedly demanded and advertised. The US, Mexico and Canada have been negotiating for more than one year now to replace the 1994 NAFTA. However, Canada has only five days until this Friday to agree to the terms and join the US-Mexico deal. Otherwise, the White House is expected to solemnly notify the Congress that the President is to sign the new deal with Mexico.

If Canada doesn’t sign until tomorrow Friday, the country will be obliged to negotiate her terms of adherence right from article one and may not get what is on offer today. Trump didn’t miss the opportunity to threaten Canadian made automobiles with more tariffs, if the country doesn’t join the US-Mexico deal now. Obviously, this is an open threat to Canada also intended by the White House to be disparaging.

A full U-Turn

In reality then, the Trump administration is clearly making a full 180 degrees U-Turn vis-à-vis Mexico. In place of statements like the one about ‘the Mexicans stealing hundreds of thousands American jobs’, Trump is now making a favor to the southern neighbor. To make it sound as a good deal, Trump said the Mexicans promised to buy more American soybeans and maize. In this way, he is caressing the ears of republican voters in the agricultural mid West without guaranteeing anything.

Is this full favorable change of Trump attitude to be repeated in the other trade fronts the US has opened all over the world? Let’s count the wars; with China the US is reaching the point of no return, Washington has abandoned the Trans-Pacific Partnership on trade and now threatens Europe with 25% super tariffs on car imports. Is the White House to retreat on all those accounts and show the favorable attitude it adopted towards Mexico? Rather not, and since it’s more possible that Trump has struck this deal with Mexico to corner Canada, he is more likely to do worse in the cases of China and Europe.

China and Europe on the spot

Only last week, Trump repeated his threat of levying 25% super tariffs the cars made in Europe and imported in the US. He also actively prepares a mammoth package of tariffs on imports from China of a value of $200 billion. Add to that the $50bn of Chinese goods being super levied so far and one arrives at half of the Chinese exports to America, amounting to $500bn. It would have been a wonderful surprise for the entire world, if Trump backed down on all those fronts. The global order would have been restored within hours and the stock markets would have reached new historical highs. But no, this is not going to happen.

What the Trump administration did with Mexico is a perfect move to create a solid economic zone in North America. Not to forget, the three NAFTA countries exchange goods of a value of one trillion dollars every year, covering each other’s needs. It’s more likely, then, that Trump is to raise the stakes in confronting both China and Europe.

So, both those economic entities have better prepare for the worse. Even the French President Emmanuel Macron, probably the best friend of Trump in mainland Europe, is not at all at ease with what is happening in the US. Last week, while addressing the annual conference of the French ambassadors, he accused the US of ‘aggressive isolationism’. At the same time, Germany is increasing her openings to Putin’s Russia. Unfortunately, all those signs do not indicate peaceful and calm prospects for the entire world. In conclusion it’s not a wild guess to say the powerful agents are out in search of victims to pay the cost of the next financial crisis.

 

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

The EU cuts roaming charges further while the UK weighs Brexit impact

Does Draghi have another ace up his sleeve given his Quantitative Easing failure?

We need a reskilling revolution. Here’s how to make it happen

8 amazing facts to help you understand China today

Is it just visa-free travel that Erdogan demands from the EU to not break the migration deal?

Can a Bavarian Oktoberfest beer indulger bring down the Berlin government?

2018 ‘terrifying’ for Yemenis but ultimately a ‘year for hope’ says UN Special Envoy

Crimea: The last bloodless secession of a Ukraine region?

EU Copyright Directive: Google News threatens to leave Europe while media startups increasingly worry

Lithuania needs to get rid of the victim mentality

A day in the life of a refugee: the wait

The cost of healthcare is rising in ASEAN. How can nations get the most for their money?

Climate change and health – can medical students be the solution?

Terrorist content online should be removed within one hour, says EP

Parliamentary bid to democratize Myanmar constitution a ‘positive development’ says UN rights expert

North Korean families facing deep ‘hunger crisis’ after worst harvest in 10 years, UN food assessment shows

What does reimagining our energy system look like?

OECD Steel Committee concerned about excess capacity in steel sector

UN chief saddened at news of death of former US President George H.W. Bush

COP21 Breaking News_04 December: Building a Sustainable Future – speech by UNEP Deputy Executive Director Ibrahim Thiaw at the LPAA Thematic Event on Buildings

Globalization 4.0 must provide for the poorest, or it risks causing chaos for everyone

We can save the Earth. Here’s how

EU job-search aid worth €9.9m for 1,858 former Air France workers

Three ways the world must tackle mental health

The banks dragged Eurozone down to fiscal abyss

Global Citizen-Volunteer Internships

It’s not kids’ screen time you should worry about – it’s yours

Israeli security forces’ response to Gaza protests ‘a recipe for more bloodshed’, says UN expert

EU budget 2019 approved: focus on the young, innovation and migration

The cost of housing is tearing our society apart

Chinese Premier Li Keqiang’s speech from World Economic Forum’s Annual Meeting of New Champions

Japanese law professor elected new judge at the International Court of Justice

At Ministerial session, UN regional office in Beirut to focus on technology for sustainable development

It’s time to stop talking about ethics in AI and start doing it

Eurozone: Inflation plunge to 0.4% in July may trigger cataclysmic developments

Office workers in these economies clock up the most extra hours

When connectivity is not enough: the key to meaningful digital inclusion

Nearly 900 children released by north-east Nigeria armed group

From ‘dead on the inside’ to ‘truly alive’: Survivor of genocide against the Tutsi in Rwanda recounts her story as UN marks 25th anniversary

Japanese banks to move their European HQ from London to Frankfurt after Brexit

Europe bows to Turkey’s rulers, sends Syrian refugees back to chaos

The Schengen area is at a crossroads

AI has huge potential – but it won’t solve all our problems

Climate change and health: an everyday solution

China-EU Relations: Broader, Higher and Stronger

Consumer product quality: Parliament takes aim at dual standards

EU-US Trade: European Commission endorses rebalancing duties on US products

Erdogan vies to become Middle East Sultan over Khashoggi’s killing

A Sting Exclusive: EU Commission’s Vice President Šefčovič accentuates the importance of innovation to EU’s Energy Union

Commission takes further action to ensure professionals can fully benefit from the Single Market

CHINA: five letters that could mean…

Who really cares for the environment?

Is a deal over EU budget possible today?

Trump asked Merkel to pay NATO arrears and cut down exports ignoring the EU

Here’s how to build energy infrastructures fit for the future

EU-China relations under investigation?

UN rights office calls for action to end ‘repression and retaliation’ in crisis-torn Nicaragua

How can we build a workforce for our digital future?

Let’s Learn

Why growth is now a one way road for Eurozone

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s