With much fanfare Trump bragged about the USMCA replacement for NAFTA. Canada still has not ratified that agreement, and perhaps won’t at all.
The Wall Street Journal reports Canada Links Trade-Deal Approval to Steel Tariffs.
Canada’s foreign minister indicated Monday the government might delay ratification of the revised North American free-trade deal until the Trump administration lifts its tariffs against Canadian steel and aluminum. “The existence of these tariffs for many Canadians raises some serious questions about ratification,” said Ms. Freeland, in Washington to meet with U.S. Trade Representative Robert Lighthizer and members of Congress.
Given the scandal-fueled political atmosphere and other pieces of legislation on the agenda, Canadian political watchers have said getting the trade deal ratified before summer would prove difficult—and politically unwise given the steel and aluminum tariffs and general animosity in Canada toward President Trump.
Pelosi May Sink the Deal on the US Side
It’s not just Canada that may nix this deal. Also consider New Nafta Is Threatened by Partisan Split Over Enforcement
Led by House Speaker Nancy Pelosi, Democrats want the administration to add provisions to last year’s pact with Canada and Mexico that will ensure Mexico enforces environmental protections and allows its workers to form unions freely.
“Right now, the president’s Nafta update can’t be enforced,” said Sen. Ron Wyden of Oregon, the top Democrat on the Senate committee that oversees trade. “No matter how good a deal looks on paper, it doesn’t mean much if you can’t make sure the other countries live up to their end of the bargain.”
The USMCA requires ratification in the House and Senate as well as legislatures in Canada and Mexico before it could replace the original Nafta that took effect in 1994.
If Mrs. Pelosi’s party remains unified, she could block consideration of USMCA, either by changing the rules of the House or triggering a mechanism inserted by Mr. Wyden into the fast-track trade law—which governs how trade pacts are passed—that would prevent the agreement from getting expedited consideration
Trump’s Trade Deal Scorecard
The self-alleged best deal maker in history does not have a single ratified deal in two years.
Instead, he has infuriated Canada, Germany, and the EU in general.
When Trump backed out of the Trans Pacific Partnership (TPP) he put US farmers at a serious disadvantage in selling agricultural goods to Japan.
By the way, even if USMCA is ratified by the US, Canada, and Mexico, for the US, the Changes are Trivial.
Viewed in that light, Trump’s scorecard is zero even if this passes.
How to Not Make Deals
- Infuriate allies
- Not understand trade is a two-way street
Trump views every deal as having a winner and a loser and he insists on winner every time.
In reality, both sides have to benefit or there would not be deals.
Results Speak
And let’s not forget the result of his tariff actions to deduce the trade deficit.
The most likely way Trump “succeeds” at reducing the trade deficit is via recession.
For discussion, please see Mission Impossible: Tariffs Didn’t Reduce the Trade Deficit (Deals Won’t Either).
Mike “Mish” Shedlock
Stuki – the full Balance of Trade report does include services
But not freshly manufactured bonds and dollars.
Those are the goods the US, given its reserve currency status, have a comparative advantage at producing….
And, production of those has, much like oil has in the Gulf states, rendered other industry uncompetitive.
So why is the trade deficit so lop sided?
In short, because the “trade deficit” doesn’t include all goods and services. But instead mostly includes those which other countries produce more of than the US.
Those which the US produces more of, freshly printed dollars and bonds, are not included. Include those as well, and it all evens out.
Brother – This all started the moment Nixon closed the gold window. Posted on it many times.
How about we have a trade deal that is no deal? We let everyone make whatever they want and sell it whomever they want at whatever price they want.
Seems like it would produce more jobs in Mexico, which would reduce illegal immigration. A double win.
But then; useless, expendable negative-contribution idiots in high places, don’t get to “demand”, “mandate” and otherwise interfere in what their productive betters do with their lives. How could that possibly work, in a proper progressive dystopia?
Are you really talking about genuine American Capitalism (NOT the current CRONY one!) Market driven Economy?
FAT Chance!