NAFTA II, the USMCA

Lots of stuff is slipping through the cracks per usual with this bipolar administration’s constant bullshit. The USMCA is one of the important issues we have all lost sight of.

No one would argue that NAFTA did not need a fine tuning, but many would argue that the USMCA is not the appropriate upgrade of the existing trade agreement between the US, Mexico, and Canada. What is unfortunate is that the Democrats and Republicans seem to be lining up on the side of a political analysis of the USMCA rather than an economic analysis. The GOP seeks to support the agreement no matter what is inside of it, and the Democrats, although by-and-large are finding issues on a micro level with each detail, are also not keen on just giving Trump a “win”.

The only certain “winner” in the USMCA for the US, is dairy producers in slightly wider access to Canada. The target is to allow US dairy farmers access to 3.5% of the Canadian market, a not insignificant sum to US dairy farmers, but an insignificant sum in the overall agreement.

Some of the Democrats point by point concerns about the USMCA are:

  1. Agreed upon labor standards which could have the effect of lowering US Auto manufacturer wages.
  2. How environmental standards will be enforced.
  3. Higher pricing on already costly classes of drugs.

Democratic leaders realize there are 3 options for the USMCA agreement. Accepting the agreement as-is, refusing it and continuing under NAFTA, or a highly likely scenario considering idiot Trump’s track record, of removing the US from any trade agreement with Mexico and Canada altogether. The uncertainty that the US represents to the interests of Canada and Mexico’s trade resulted in the necessary completion and implementation of a major trade agreement between them and 9 Asian countries in the CPTTP.

All of these finer points aside, the biggest drag on the trade situation between the three countries is idiot Trump’s idiot tariffs. Until that is addressed, the US will push Mexico and Canada further away and create an atmosphere exactly the opposite of any formalized trade agreement.

Perhaps equally important is the lack of focus on the holistic effects of the USMCA on trade between the countries. The International Monetary Fund has made just such a study, and it isn’t pretty. Regardless of whether we trust the IMF’s target numbers in this profoundly complex study, the overall effect seems undeniable. The USMCA will result in a net loss of trading between all three countries and a net loss for each country due to global forces that would make it easier and more cost effective to take a portion of their business elsewhere as a result of the agreement.

We must further examine idiot Trump’s idiocy in his constant statements that the USMCA is collecting large amounts of monies in coffers to pay for the wall. First, the USMCA isn’t even ratified. Second, if it were to be ratified, there are no magical “coffers” into which money is flowing from US companies as a result of increased sales. Overall it is clear US companies will have decreased sales and there is no mechanism by which any monies they are making are going to be collected by the Fed to dump into a wall slush fund anyway. Fucking idiot.

The Trump administration’s desire to be an isolationist nation has no effect whatsoever on the global nature of US multinational corporations. Money flows like water through the path of least resistance and the glorious amount of cash that tax reform has dumped into corporations only feeds their desire and ability to find deals across the globe wherever their whims and the bottom line lead them.

4 thoughts on “NAFTA II, the USMCA

  1. Hello Sean. The development I did not like with the new USMCA is that Canada has requirments for protection of LGBTQ people and they insisted on it being put in the new treaty. However after pressure from the Republicans in the US congress Canada added a statement that the US full filled those protections. As long as that statement is still included in the new treaty I am against the whole treaty.

    As for TPP and trade agreements generally I am in favor of them as long as countries do not have to give up their sovereignty. There were parts of the TPP that seemed to do that in favor of multinational corporations.

    One last thought. Have you seen how the orange turd monster is saying if he closes the southern border that will result in a profit for the US? Hugs

    Liked by 1 person

      1. All we can do is keep hammering away at the truth I reckon. These guys hell-bent on making their own dungeons. Hope they notice their chains rattling before election day. The bitch is, we need a massive turn around so severe it will most likely be easily played by the right to their cult and some in the middle as the ruins of democracy! Could very well be right back out of power in 2025…assuming liberals take control of the Senate and possibly the WH in 2021.

        Liked by 1 person

Leave a Reply

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