MAGA! Trumpy going to get us that wall too!
In a trade victory for President Trump's divide and conquer approach, the United States and Mexico reached agreement on a new trade pact on Monday, raising hopes that a three-party deal with Canada can be reached to redraw the North American Trade Agreement.
“A big deal looking good with Mexico!” Trump tweeted on Monday.
U.S. and Mexican negotiators worked through the day Sunday to conclude their talks, which focus primarily on autos that will be accepted without tariffs in the United States. The agreement provides that 85 percent of the parts in the car must be made in North America to be considered for tariff-free imports.
The Trump Administration had been concerned that car parts from Europe and Asia, especially china, were being assembled in cars in Mexico and then imported for sale in the United States.
As part of the new deal, the U.S. will impose duties of 2.5 percent on cars that don’t meet the agreement’s terms on car parts from North America at existing car assembly plants in Mexico. But cars made at new plants could face higher tariffs of 25 percent.
Canada had been most concerned about low wages at Mexican car factories siphoning auto industry jobs from Canadian and U.S. factories.
The two sides also agreed on terms to reduce Mexico’s restrictions on foreign oil companies wanting to do business in Mexico.
Canada has said that it does not feel shut out of the negotiations because the problems between Mexico and the U.S. were the most intractable. Now that they have been resolved Canada will rejoin the talks on the trilateral issues.
“NAFTA is overall a trilateral agreement, but inside that trilateral agreement, there are bilateral trading relationships,” Canadian Foreign Minister Chrystia Freeland said. “The U.S.-Mexican issues inside NAFTA are really complicated and it makes a lot of sense — and we welcome the fact — that the U.S. and Mexico are rolling up their sleeves and devoting a lot of time to resolving those issues.”
Trump had demanded a rewrite of NAFTA, claiming that Mexico was stealing jobs and taking advantage of the previous NAFTA agreement, citing the fact that Mexico enjoyed a $63.6 billion trade surplus with the United States in 2017.
Critics pointed out that much of that surplus came from cars that were assembled from parts made in the U.S. and Canada, but the total car price was included in the bilateral Mexican-U.S. trade figures.
By requiring higher content made in the U.S. and Canada, the new trade deal may fractionally increase employment in the U.S., but most of these factory jobs have now been taken over by robots.
U.S. President Donald Trump speaks a s Representative Jeb Hensarling, a Republican from Texas, left, reacts during a roundtable discussion on the Foreign Investment Risk Review Modernization Act (FIRRMA) in the Roosevelt Room of the White House in Washington, D.C., U.S., on Thursday, Aug. 23, 2018. Tariffs on technology from China have led to U.S. economic gain, President Trump said. Photographer: Yuri Gripas/Bloomberg
One key sticking point in the negotiations was a demand by Trump that there be a so-called sunset clause in the agreement, meaning that it would end after a fixed number of years and have to be renegotiated. Mexico said on Saturday that the Americans had dropped the sunset clause, clearing the way for an agreement.
https://www.forbes.com/sites/charles.../#24015f007806
“A big deal looking good with Mexico!” Trump tweeted on Monday.
U.S. and Mexican negotiators worked through the day Sunday to conclude their talks, which focus primarily on autos that will be accepted without tariffs in the United States. The agreement provides that 85 percent of the parts in the car must be made in North America to be considered for tariff-free imports.
The Trump Administration had been concerned that car parts from Europe and Asia, especially china, were being assembled in cars in Mexico and then imported for sale in the United States.
As part of the new deal, the U.S. will impose duties of 2.5 percent on cars that don’t meet the agreement’s terms on car parts from North America at existing car assembly plants in Mexico. But cars made at new plants could face higher tariffs of 25 percent.
Canada had been most concerned about low wages at Mexican car factories siphoning auto industry jobs from Canadian and U.S. factories.
The two sides also agreed on terms to reduce Mexico’s restrictions on foreign oil companies wanting to do business in Mexico.
Canada has said that it does not feel shut out of the negotiations because the problems between Mexico and the U.S. were the most intractable. Now that they have been resolved Canada will rejoin the talks on the trilateral issues.
“NAFTA is overall a trilateral agreement, but inside that trilateral agreement, there are bilateral trading relationships,” Canadian Foreign Minister Chrystia Freeland said. “The U.S.-Mexican issues inside NAFTA are really complicated and it makes a lot of sense — and we welcome the fact — that the U.S. and Mexico are rolling up their sleeves and devoting a lot of time to resolving those issues.”
Trump had demanded a rewrite of NAFTA, claiming that Mexico was stealing jobs and taking advantage of the previous NAFTA agreement, citing the fact that Mexico enjoyed a $63.6 billion trade surplus with the United States in 2017.
Critics pointed out that much of that surplus came from cars that were assembled from parts made in the U.S. and Canada, but the total car price was included in the bilateral Mexican-U.S. trade figures.
By requiring higher content made in the U.S. and Canada, the new trade deal may fractionally increase employment in the U.S., but most of these factory jobs have now been taken over by robots.
U.S. President Donald Trump speaks a s Representative Jeb Hensarling, a Republican from Texas, left, reacts during a roundtable discussion on the Foreign Investment Risk Review Modernization Act (FIRRMA) in the Roosevelt Room of the White House in Washington, D.C., U.S., on Thursday, Aug. 23, 2018. Tariffs on technology from China have led to U.S. economic gain, President Trump said. Photographer: Yuri Gripas/Bloomberg
One key sticking point in the negotiations was a demand by Trump that there be a so-called sunset clause in the agreement, meaning that it would end after a fixed number of years and have to be renegotiated. Mexico said on Saturday that the Americans had dropped the sunset clause, clearing the way for an agreement.
https://www.forbes.com/sites/charles.../#24015f007806
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