Trump's 'New Trade Deal' with Mexico Isn't New at All - It's NAFTA Wedded to the TPP
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28 August 2018
In desperate need of a fresh distraction, Donald Trump decided that Monday was the perfect day to announce his new trade deal with Mexico. Though there’s no deal. Negotiations actually appear to be only a bit further along than Trump’s “deal” for North Korea to denuclearlize, and most of what’s in the proposal is a thin coat of paint over the NAFTA agreement that Trump has railed about for years.
What’s is in Trump’s Half-ta agreement? According tothe Washington Post, it requires that for a vehicle to count as “American made,” more of it has to be made in America, but that can include Mexico. And the wages paid on at least part of that construction have to be higher, but not as high as the wages already paid to US workers. All of which makes the deal sound as if it could potentially be a good thing for Mexican auto workers … though it’s not clear how it creates a job or a dollar of wages in the United States. Unless, of course, US automakers use it as an excuse to argue for still lower “entry level” wages.
Still, there are some genuinely good things in the proposed deal. The agreement would include environmental regulations that address the crisis of marine life along Mexico’s Pacific coast. It would include improvements in international copyright law. It would include more rights for Mexican workers to organize, even as Trump and Republicans are chopping away at labor rights at home.
If these changes sound familiar, it’s because they’ve all been seen before.
These provisions were all part of the TPP, which Mexico and Canada both signed onto after Trump took the United States out of that deal.
Trump attacked NAFTA and the TPP, but his new proposal weds the two together. Experts predict that the proposal is likely to “make cars and trucks more expensive for American buyers,” in exchange for “more North American jobs.” But again, those jobs could far more easily be on the other side of Trump’s nonexistent wall.
And of course, what’s not in Trump’s agreement is equally important. Canada. By attempting to split the NAFTA partners into separate deals, Trump is sending one solid message: This is all very confusing and no one can plan for the future.
Trump’s not-a-deal currently does nothing to tariffs. The tariffs that Trump imposed on Mexico, along with global tariffs on steel and aluminum, remain in place. That’s a good thing for steel plants hoping to get off a few extra batches before situation becomes untenable; not such a good thing for farmers filling up silos with grain (and tanks with milk, and freezers with chicken) that’s coming in with no place to go.
Negotiations with Canada have not yet started, but Trump is warming up in his traditional way by threatening the Canadian government with still more tariffs if they don’t buckle to his demands. But unless there’s actually hidden “and then we both get to pants Canada” language hidden in the proposal with Mexico, it’s hard to see why Canada wouldn’t play along.
Based on the aspects of the Mexico deal that have been made public, Trump appears to be keeping NAFTA and signing TPP one nation at a time. It’s clumsy and inefficient, but that way does give Trump 194 opportunities to claim yet another wily victory at the negotiating table. They also give 194 opportunities to squeeze in a few building permits and, of course, a golf course here and there.
The biggest change Trump seems to have insisted on was a change in the name. NAFTA, according to Trump had “bad connotations.” So they’ll make up something new. Maybe they could bring in H. Ross Perot to work out that part. Donald Trump’s Giant Sucking Sound has a nice ring to it.
One thing is certain, if Trump is going to make this deal more than a “stop talking about McCain and pay attention to me” stunt, it’s going to take some scrambling on both sides of the border. Mexico has a new president and new government arriving on December 1. For this deal to go through without more rounds of review by the new team, Trump will have to get it through Congress and Mexico’s current president Enrique Peña Nieto, will have to do the same.
That means Republican lawmakers getting out there in election season to proclaim how something that’s 90 percent NAFTA, 10 percent TPP is a win, even though they’ve spent decades moaning that both were losers. And it means fitting this vote around both the elections and the fight over Trump’s Supreme Court nominee.