NAFTA is dead: President Trump announces United States-Mexico-Canada Agreement (USMCA), stocks jump

“U.S. President Donald Trump on Monday took credit for salvaging a trilateral free trade accord with Canada and Mexico, marking it as a victory in his campaign to reshape global commerce as financial markets breathed a sigh of relief,” Reuters reports. “The deal, announced on Sunday, is a reworking of the 1994 North American Free Trade Agreement, which underpins $1.2 trillion in trade between the three countries. Trump had described NAFTA as a bad deal for Americans and threatened to eliminate it as part of his ‘America First’ agenda.”

“The new United States-Mexico-Canada Agreement (USMCA) is aimed at bringing more jobs into the United States, with Canada and Mexico accepting more restrictive commerce with the United States, their main export partner,” Reuters reports. “U.S., Canadian and Mexican stocks were trading higher on Monday, with the benchmark S&P 500 index .SPX rising more than 0.7 percent and the Toronto Stock Exchange’s S&P/TSX index .GSPTSE gaining about 0.4 percent.”

“The deal effectively maintains the current auto sector and largely spares Canada and Mexico from the prospect of U.S. tariffs on their vehicles, although it will make it harder for global auto makers to build cars cheaply in Mexico,” Reuters reports. “‘It’s a promise made, promise kept,’ Peter Navarro, the White House trade adviser, told Fox News on Monday. ‘NAFTA is dead. We have USMCA.'”

“U.S. officials intend to sign the new trilateral deal by Nov. 30, Navarro said. It would then be submitted for approval by the U.S. Congress,” Reuters reports. “A senior source close to the trade talks said Mexico’s Videgaray, Trudeau’s chief of staff Katie Telford and White House adviser Jared Kushner helped over the weekend to facilitate Sunday’s agreement.”

Read more in the full article here.

MacDailyNews Take: Hopefully, once the details are revealed, the new agreement will be an improvement over NAFTA.

42 Comments

  1. MDN tradition on unattributed editorializing continues.

    Original headline:
    Trump cites ‘historic’ trade pact with Canada, Mexico

    And as the article states:
    “While changing NAFTA and bringing down U.S. trade deficits was a top Trump campaign pledge, Sunday’s agreement largely leaves the broader deal intact and maintains supply chains that would have been fractured under weaker bilateral deals.”

    Stocke indices were up. But of course, that’s what markets do, rise and fall.
    “S&P 500 index .SPX rising more than 0.7 percent and the Toronto Stock Exchange’s S&P/TSX index .GSPTSE gaining about 0.4 percent.”

    1. It’s all optics. It’s for show, to get a boost from his base before the election. Trump cooked up a problem and fanned the flames. Then he “solved the problem” by signing a deal that is essentially the same as the old one.

      The truth is that stronger countries gain more than we lose from trade and globalization. Reworking NAFTA, tariffs on trade with China, and antagonizing European trading partners, are not going to put more Americans to work. What they will do is create distortions in the market that will harm the domestic economy in the long run.

      The economy is like a platform-play in the technology sector. You’re in a position of power when your “platform” (currencies, supply chains, finance, corporations) is wired into the heart of the larger ecosystem. What Trump is doing is prompting the rest of the world to build around, instead of more deeply integrating with, the American economic “platform”.

          1. that’s all the orange MDN hero can claim. His underlings changed the acronym to put US first. Weak symbolism.

            How about them wages? US wages haven’t grown in 2 years and the agricultural sector is reeling from trade losses, which Trump thinks can be resolved with a welfare payment.

            Trump demonstrates once again that extreme rhetoric attacking one’s closest trading partners does nothing good for the USA. The extremely modest tweaks to NAFTA could have been smoothly incorporated every 5 years during the standard review period that was written into the original trade agreement. Much ado about nothing. The USA continues to lose the respect of its allies as the dipshit in chief refuses to understand the value of large multilateral trade agreements. The bigger the international trading blocs, the better it is for US business.

    2. As a Canadian who has watched this fairly closely there is no great overhaul here. As you say its mostly optics, some tweaks that add a little value and a new name

      1. And most of the changes that are in the agreement were actually included and agreed to in the TPP, which Trump refused to sign on to and called a horrible deal for the US.

  2. No Mac news here.

    Also, not much of trade news either. Trump’s threats to jack up tariffs were removed. That’s the big news. The market will overcorrect and then settle back to where it should be, as it always does. Trump’s artificial roiling of the markets has been great for traders, bad for US farmers and manufacturers. All of the US bluster can end now. Canada and Mexico got what they wanted. Nothing substantial has changed. Trump’s biggest bragging point is that he gets to change the acronym. Whoopie. How about dealing with China, Trump? On your last visit you openly bowed to Chinese imperialism, then tucked tail and scampered back to other scandals. NAFTA 2.0 was easy, since almost nothing got significant revision. How about solving the Chinese trade problem?

    Go ahead and claim victory for your orange hero, MDN, and then seriously consider changing your website name. You obviously don’t cover Macs anymore. This is now the watch/iphone/trump show.

    1. “…MDN, and then seriously consider changing your website name. You obviously don’t cover Macs anymore. ”

      You know who else doesn’t cover Macs anymore?

      SJW Tim and the gang in Cupertino? Where’s the new/updated modular MacPro? iMac? Mac mini? MacBook Air? By way of the Mac, Apple has certainly not given MDN much to report on. But judging from your post, facts and truth take a backseat to worn out SNLesque grandstanding. You go Spartacus.

      1. As usual, Mike writes the hard critical truth. He called out MDM for going far off into politics, which has ruined this site.
        Mike has written many times in the past concerns about Apple’s pathetic Mac hardware management. So why did you choose to take an underhanded swipe at him? You are the one who posted no facts, just attacks. Lame post, nownow

      2. The self-inflicted trade turmoil which is having direct impact on US businesses and their trading partners will have a negative impact for quite a while. I stand by my words — the renewed NAFTA trade agreement doesn’t bring any substantial improvement to the USA after all the grandstanding he have heard from the least competent administration the USA has had in the last century. All this deal does is put an end to Trump’s brainless twitter tirades against two of the USA’s most important trading partners. Close the wounds already.

        Moreover, Apple is not affected in any material way by this trade “news”. It doesn’t affect Apple. Apple builds almost all its hardware in China, and will continue to do so because US corporations can take advantage of cheap labor that no other nation can offer. No tariffs and no taxation will ever rebalance trade when the minimum wage disparity is that great. Even dumbass Trump knows this, that’s why the self-proclaimed greatest dealmaker in the world can’t even begin negotiations in China. Apple leaders, who care more about executive bonuses than creating USA jobs, will continue to have Foxconn and others do all the heavy lifting and there’s nothing Trump or his cronies are going to do about it. Jobs said as much almost a decade ago.

        I would much rather MDN devote its limited resources to reporting on the Mac, as their title suggests they used to. There is ample subject matter there:
        – a new major version of MacOS to be thoroughly reviewed
        – features missing in recent Mac hardware releases
        – Apple’s promises for future Pro level Mac hardware should be met with honest discussion of what professionals want from Apple (those few pros who haven’t abandoned Apple that is)
        – recommendations for accessories to improve the Mac
        – recommendations and thorough review of 3rd party software for the Mac

        All of these things would be a gazillion times more interesting and useful than hearing about watches or the unfortunate Trump administration.

        1. I think MacDailyNews has meandered off into politics because it is the best clickbait, which generates the most income. Also, Stevejack doesn’t editorialise about Apple much any more because APPL doesn’t need to be pumped up, as it did early on when Apple was beleaguered and MDN was poor. But now Apple is a trillion-dollar company, even after being led by a bumbling Tim Cook, a drooling Eddy Cue, and a stoned Jony Ive. MDN doesn’t need to work so hard any more. Their investment in Apple made them rich men; now the interns take care of the shop; that involves making sure the headlines are sufficiently inflammatory, and rolling out the kegs on Fridays.

          1. “Apple is a trillion-dollar company, even after being led by a bumbling Tim Cook, a drooling Eddy Cue, and a stoned Jony Ive.”

            Poignant, funny and most importantly — spot on! The constant neglect of improving products and removing key features and ports consumers like, are dumb decisions as a result of fat cat laziness and greed. All the while they sip Margaritas on the sunny veranda watching the iPhone gravy train rolling by…

    2. I don’t always (don’t often!) agree with MDN’s politics. But we’re all grownups here, I think we can afford to have our own positions and perspectives challenged from time to time.

      Besides, I don’t think MDN goes too far off their track when they bring to their reader’s attention issues of international trade, sectors adjacent to Apple’s product lines, etc.

    3. Things have actually changed. Our farmers have lost tremendous market share in Mexico and China, which will take years to get back from the competition in South America.

  3. If I understand the process correctly, NAFTA isn’t “dead” until the Senate ratifies the USMCA. While it is probably too early to predict how that will go, the Senate does not have the best record when it comes to ratifying treaties over the last several years.

    https://politi.co/2QlCyM9

  4. The problem is that Candidate Trump highly complained about Investor State Dispute Resolution in these so-called Free Trade Congressional -Executive Agreements. President Trump did nothing about that, but made sure to take care of his benefactors.

    That would score as a fail.

    1. As I said above, as a Canadian I watched this issue closely and from what I’ve reviewed this is very much still the NAFTA agreement with a few tweaks and a new name. Canada is very happy that we gave up little and gained a little. Status quo is what was wanted north of the US border and that’s basically what we have. If that’s what Trump wanted then yeah for him but seems he boasted of much more.

      1. Blah blah blah, As an American I can tell you that this is a win for the US. What can your PM say? What the hell does Canada do anyway except ride on The US’s coat tails. Shove off.

        1. Right on!

          It always irritates me the Canadians as you say ride our coattails, take our money, enjoy our protections and do not pay their fair share.

          Like a certain roadie around here, look down their noses, sneer and constantly criticize the U.S.A. while their hands are out for the taking.

          “Shove off” is being kind…

  5. Actually, as I look at the details more closely the revisions to NAFTA in the USMCA are mostly what’s in the TPP trade deal which Trump pillored and refused to sign. Hilarious. Great bait and switch by Trump I guess. More likely he has no clue about either.

  6. Sounds like all the leftist Trump detractors in their rapid-fire responses reveal, in mere hours they have poured over and read ALL the details and compared it point by point with NAFTA, to make an informed decision. I highly doubt it.

    Parroting CNN is my guess in this short a time span. If so, in the last two years CNN has issued more clarifications (apologies), pulled stories completely and fired Pulitzer Prize journalists for false reporting. It would be great to impeach and pull journalists licenses for life convicted of lying and false reporting. Oh wait, they don’t have a license, are immune (sacred cows) and hide behind the Constitution.

    Regarding the bill, even detractors would to have admit Trump fulfilled a campaign promise. Unlike Obama’s promise to close GITMO. Secondly, what have all presidents since 1994 done to reduce trade deficits? Absolutely nuthin’…

    Bottom line: What the left always says if only one life is saved, it is worth the effort. Well in this case, if only one part of the new deal is improved, it is worth the effort, no? …

    1. Agree it is a win for Trump no matter what. Parsing the details is an academic exercise – not an empty one, but a pointless one because in politics the only thing that matters is who gets credit for what. Any president gets credit for what happens on his watch, even if it’s rubber-stamping or renewing standing agreements. I’m OK with that. As for blame, well, that involves a somewhat different, more complex psychological mechanism, whose explanation this margin is too narrow to contain.

      1. “Agree it is a win for Trump no matter what. Parsing the details is an academic exercise – not an empty one, but a pointless one because in politics the only thing that matters is who gets credit for what.”

        Exactly right fair minded Herself and explains the problem why politics is broken, dishonest, if not corrupt.

        Agreed all presidents have at some point rubber stamped and taken credit. But obviously we are in unprecedented uncharted territory with President Trump.

        The Democrat detractors are downplaying and outright ignoring any progress, same as the media. The proof is the media NOT REPORTING a remarkable economy, it goes against their biased narrative and political goals. Imagine if 10% happened under Obama’s watch, the media would go absolutely bonkers non-stop in effusive praise. The president faces a hostile media everyday treating him unfairly in their reporting and worse feeling good about their collusion. In my lifetime have never seen anything like it, unbelievable…

        1. The media is absolutely reporting on the great economy. It just so happens that the great economy started happening in 2009 and the media is still tracking it.

          “Imagine if 10% happened under Obama”

          Excuse me, but 10% of what?

          1. How many times did GDP rise over 3% and 4% under eight years of Obama?

            How many times did GDP rise over 3% and 4% under 1.75 years of Trump that Obama’s had nothing to do with?

            Nuff said …

    2. Goeb, we have read the summary of the new trade agreement. It’s very thin because it accomplishes almost nothing. Have you read it?

      No, you haven’t, that’s why you went off on a tangent attacking Faux News’ adversary. You can’t even stick to the topic, so being the obedient little attack dog you are, you pounce on standard Faux News talking points. Ignore the fact that US growth is less than half what Trump promised on the campaign trail. Ignore the constant scandals as clueless Trump uses one smokescreen after another to cover for the piles of his own shit he steps in.

      Regarding campaign promises: a successful candidate makes few and instead reacts to the rapidly changing world as new facts become available. The candidate knows very little. When in the White House, he should learn a lot from his intelligence staff. The fact that you want a candidate to stick to a ridiculous stump speech script that had no basis in facts is just plain stupid.

      Trump has made no decisions whatsoever on Gitmo, it remains an large drain on taxpayers and serves no purpose when there are so many underutilized military bases as it is. You conveniently recall that Obama did direct the closing of Gitmo; the Senate, at the strong urging of the Defense Department which loves the light duty and the symbolism of looking like they are doing something important, blocked it. Read more: https://www.newyorker.com/magazine/2016/08/01/why-obama-has-failed-to-close-guantanamo

      So tell us, Goeb, how many detainees are held in Gitmo today? How many bad hombres has Trump sent there? How many $billion per year are US taxpayers spending to keep it open? Give us answers instead of parroting Faux talking points. Prove that you can actually read and use common logic. Because keeping open a 99% empty military base makes no sense.

      1. Mike, no I did not read the summary. Same as MDN waiting for the full details to flush out. I’m not frothing at the mouth like a knee jerk liberal pouncing to denigrate the hard work of our president.

        NO, did not go off on a tangent except to say if trade improves one particle it is a success and more than Obama ever did because he did NOTHING to address trade imbalances, same as Bush and Clinton.

        On the other topic. The same New Yorker that just recently brought forth a false accuser of Kavanaugh no one in the media including the NYT’s could corroborate? How credible. For the record I do not parrot Fox News or CNN either. Facts are all that matters.

        Obama promised during the campaign to close GITMO as one of his first acts almost on Day One. Guess you conveniently forgot the first two years of his presidency when Democrats controlled both houses of Congress and the White House.

        Remember how Democrats rammed through the Unaffordable Care Act without a single Republican vote and the airhead speaker proudly proclaimed you have to pass it first, before you know what’s in it.

        Are you going to tell us the same could not be accomplished with GITMO in the first two years and instead choose to make excuses and blame the Senate.

        As they say on ESPN – C’mon Man!…You

      2. It either accomplishes something or nothing. Almost nothing does not apply:

        Just to be clear, I copied this info from Vox on Apple News. So, yes, it does appear that something was accomplished.

        USMCA, Trump’s new NAFTA deal, explained in 500 words
        A very simple explanation of the new trilateral trade deal.
        The US, Canada, and Mexico struck a new trade deal to replace NAFTA on Sunday. It’s known as the United States-Mexico-Canada Agreement, or USMCA. The three countries reached a consensus after more than a year of talks, which began after President Donald Trump made good on his campaign promise to renegotiate the nearly 25-year-old agreement.
        It’s basically NAFTA 2.0, with major changes on cars and new policies on labor and environmental standards, intellectual property protections, and some digital trade provisions.
        Here are the biggest changes:
        Country of origin rules: Automobiles must have 75 percent of their components manufactured in Mexico, the US, or Canada to qualify for zero tariffs (up from 62.5 percent under NAFTA).
        Labor provisions: 40 to 45 percent of automobile parts have to be made by workers who earn at least $16 an hour by 2023. Mexico has also agreed to pass laws giving workers the right to union representation, extend labor protections to migrant workers, and protect women from discrimination. The countries can also sanction one another for labor violations.
        US farmers get more access to the Canadian dairy market: The US got Canada to open up its dairy market to US farmers, which was a big issue for Trump.
        Intellectual property and digital trade: The deal extends the terms of copyright to 70 years beyond the life of the author (up from 50). It also extends the period that a pharmaceutical drug can be protected from generic competition.
        It also includes new provisions to deal with the digital economy, including prohibiting duties on things like music and e-books, and protections for internet companies so they’re not liable for content their users produce.
        No section 232 tariff protections: Section 232 is a trade loophole that Trump has used to impose steel and aluminum tariffs on Canada, Mexico, and the European Union. Both Canada and Mexico wanted protections from these tariffs, but they didn’t get them. They did get the US to make a side agreement that protects them from possible auto tariffs under 232, though.
        Sunset clause: The agreement puts in a 16-year “sunset” clause — meaning the terms of the agreement expire, or “sunset,” after a set period of time. The deal is also subject to a review every six years, at which point the US, Mexico, and Canada can decide to extend USMCA.
        USMCA has been negotiated — now it needs to get approved
        Trump, Canadian Prime Minister Justin Trudeau, and Mexican President Enrique Peña Nieto have to sign the agreement, which they plan to do before Peña Nieto leaves office at the end of November (perhaps at the G20 summit in Buenos Aires that month).
        But the deal still needs to be ratified by all three governments. Canada and Mexico will likely do so.

  7. In the end, these are minor iterations of the existing agreement – not tearing it up and starting over as promised. What I find interesting is that it actually is designed to have bipartisan appeal. It’s very clever in that regard – the Republicans ask for a living wage which is the Democrat’s baby, but it’s really a cynical ploy to make sure fewer people are employed in Mexico. So everyone can claim joy.

    The sad truth is that if Mexico starts paying a living wage, then low-cost goods will no longer be made in North America at all. They will simply be made in Indonesia, Malaysia, and yes, of course, China.

    On the other hand, if one wants to stop Mexicans from “stealing our jobs”, one needs to create better, higher-paying jobs in Mexico so they have lesser incentive to migrate. Perhaps this is a step in that direction. Pair that with some better economic incentives, policies to help reduce corruption in Mexico etc. and you could be on to something.

    As with any issue like this, many pieces to the puzzle. No single effort or sound bite will move the needle very much.

  8. I didn’t vote for Trump, won’t vote for him in 2020, and personally can’t stand the man. But I am GLAD Hillary lost.

    That said, I think Trump is doing some good things for America so far.

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