NAFTA

If Donald Trump Breaks NAFTA, North America Will Connect Through Sports

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The World Cup is underway, and Mexico surprised everyone by defeating Germany, the reigning champions. The people in Mexico City celebrated the victory, and they created a small artificial earthquake, and this tremor was registered on seismographic sensors.

Meanwhile, the United States national team didn’t qualify for the World Cup, but there were celebrations in many of the United States cities as well. Many Americans are supporting the Mexican national soccer team, and according to Sports Illustrated, they are calling it “America’s other team.”

The relationship between the United States, Mexico, and Canada keep improving, and they will host the World Cup in 2026, showing the world that the three countries have become partners on the global stage. But is it like that in the other aspects of life not named sports?

The governments of these countries are on the brink of a trade war. So far, they have been glued together with the North American Free Trade Agreement (NAFTA), but the US president Donald Trump has firmly decided to renegotiate the “worst trade agreement ever.” The negotiations stalled and instead of coming to a joint solution, Trump imposed steel and aluminum tariffs on Mexico and Canada.

The days before the World Cup announcement, Trump and Canadian Prime Minister Justin Trudeau had a talk in which Trump called Trudeau “weak and dishonest” when Trudeau justified his decision for retaliatory tariffs. And this was nothing compared to what Trump had to say about the Mexican immigrants who are trying to cross the border and enter the United States.

Source:nationalreview.com

With the World Cup in North America approaching, three countries are becoming closer, but they have never been so distant as well. Even though it is a bit contradictory, these are the facts. Over the last few decades, the United States, Canada, and Mexico have become intertwined to the measure nobody saw it coming. Mexico and Canada are the main export markets for the United States, and they account for around 33 percent of the US trade.

Not many could predict this, but the three countries have turned into one, North American market. Some industries such as cars and appliances are now North American – they are not Canadian, Mexican or from the USA specifically. The production takes place all across the continent, and every country is doing their part. Cars and appliances especially are built by the people of North America, and you cannot find a product which has the personal print of one country only.

This integration of economy is just one of the reasons why the United States became competent in manufacturing. But the production has risen in Canada and Mexico as well, which helped raise wages, pushing many people to the almost non-existent middle class. As you can see, the three countries have been working diligently to improve their economic status and elevate their industries, but their societies also grew fond of each other. And this is seen through sports.

For instance, the National Hockey League has taken place in both Canada and Mexico, while the Major League Baseball has always included at least one Canadian team. Starting from this years, games will be played in Mexico and the first squads to have the privilege are San Diego Padres and Los Angeles Dodgers who will go against each other in Monterrey. Furthermore, the National Basketball Association has had a Canadian team as well, and the clubs from the NBA started playing games in Mexico in 2017. Let’s not forget about the National Football League where teams played in Canada from 2008 to 2013, and they also had regular-season games in Mexico City.

Meanwhile, soccer has always been a popular sport in entire North America. Mexicans have been passionate about it for decades, and that passion spilled over to the United States and Canada, countries that are facing a growing interest in popularity of the sport. Moreover, a lot of European stars crossed the continent and played for the MLS teams, and it all started with David Beckham, just recently, Zlatan Ibrahimovic came to the States.

The cultural ties between the United States and Canada are not surprising at all considering that the two countries have the same heritage as former British colonies. Many of these connections had been established before the NAFTA was signed. The people speak the same language, and their economic development is on a similar level. However, the cultural ties between the US and Mexico are growing, and this was something nobody could assume would happen. The two nations have a different history, and the people are not even speaking the same language. Furthermore, legal systems of the two countries differ and the United States is far more progressive than Mexico.

However, by cooperating, the two countries managed to overcome the differences and grow together. Sure, there are still gaps to be filled and issues to be solved, but Mexico and the US have never been closer than they are today. And this also had a positive impact on the relationship between Canada and Mexico.

More than 10 percent of people living in the United States are of Mexican descent whereas almost 2 million US residents are living and working in Mexico. The culture of the two countries, although initially different, connected the people and what they need to realize is that their country’s economies are tied together, and they will grow or decrease together. Also, let’s not forget about the Oscars. The last four out of five Oscars for the best director went to Mexican filmmakers, and that only shows that culture knows no borders.

And then politics meddled in. It is too early to tell whether the tariffs imposed by the US president Donald Trump will be just the obstacle countries will be able to overcome, or it will leave permanent consequences on the relations between the US and Canada and the US and Mexico. The negotiations to reinvent NAFTA so that it will be more in favor of the US are going to be tough, and even though Canada and Mexico have been the friends of America, they will not give up every benefit they have from the current trade agreement just to please Trump.

Source:alwaght.com

NAFTA is going to survive in one form or another. But we cannot assume what POTUS’ next move is, and he can always pull the United States out of the deal, which would be disastrous for every country involved. So many companies have made major investments in join manufacturing all around the continent and to break these ties suddenly would cost those companies money, and people would lose jobs. Furthermore, all three countries would lose competitiveness and the connections they have been making in the past decades.

Even if NAFTA ceased to exist, this wouldn’t stop the three countries from staying culturally interwoven. When looking at the future of these nations, there is the light at the end of the tunnel. Current trade tariffs will end at some point whether Trump decides to abandon them or the people are bound to wait for the next US president. The 2026 North American World Cup is taking place, and it is the event that will rejoice the entire continent and show the world how close Canada, Mexico, and the United States actually are.

Source: foreignpolicy.com

Trump Imposes New Trade Tariffs on Canada, Invokes 1812 War

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President Donald Trump spoke on the phone with Canadian Prime Minister Justin Trudeau about the new tariffs that are imposed on steel and aluminum imports from Canada. According to one of the sources familiar with the conversation, POTUS invoked a historical reference that was wrong.

The sources claim that Trudeau was opposing Trump, grilling him about justifying the tariffs as a “national security” issue. Trump responded: “Didn’t you guys burn down the White House?” referring to the War of 1812.

The problem with this is that it has nothing to do with the tariffs. Also, the statement was incorrect because it was the British troops who burned down the White House in 1812. The British army had to do something after the Americans attacked York, Ontario, so they invaded Washington.

Source:mediaite.com

One source was asked whether this was meant to be a joke and he responded: “To the degree, one can ever take what is said as a joke. The impact on Canada and ultimately on workers in the US won’t be a laughing matter.” Meanwhile, the White House restrained from commenting, and although CNN requested an answer, the National Security Council didn’t give it immediately.

According to National Economic Council Director Larry Kudlow, there are some short-term tensions between the United States and its Northern neighbor, but despite this conversation, the two countries remain “very good.” Kudlow said: “I have no doubt that the United States and Canada will remain firm friends and allies whatever short-term disagreements may occur.”

Trudeau denounced the “national security” justification in the interview with NBC’s Meet the Press. He said: “The idea that we are somehow a national security threat to the United States is, quite frankly, insulting and unacceptable.”

Canada’s Minister of Foreign Affairs Chystia Freeland was perplexed by Trump’s comments. Freeland said: “And I would just say to all of Canada’s American friends — and there are so many — seriously? Do you really believe that Canada, that your NATO allies, represent a national security threat to you?”

Source:businessinsider.com

As a Corker spokeswoman told CNN, Freeland met with Senate Foreign Relations Committee Chairman Bob Corker in order to express her concerns regarding the new tariffs. Corker questioned Trump’s policy and his ridiculous justification. “There is no reason to use this provision to consider imposing tariffs on the automobile industry, and this appears to be either an attempt to affect domestic politics ahead of the election or for some other transactional purpose regarding ongoing trade discussions. This is a dangerous course and should be abandoned immediately,” Corker said in the statement.

As expected, POTUS wrote on Twitter, defending his decision on the newly-imposed tariffs. He said: “The United States must, at long last, be treated fairly on trade.” One of the senior administration officials didn’t want to discuss details of the conversation, but Trump and Trudeau definitely had heated moments and confrontations. The official said: “It’s understandable that change causes friction.”

Just a few months ago, Trump promised Trudeau that Northern neighbor would be exempt from the new tariffs, as the Canadian officials confirm to CNN. At one point, the US granted Canada and Mexico a reprieve from tariffs as the three countries are trying to rework the North American Free Trade Agreement known as NAFTA.

Source:thenational.ae

Trump said that it was concerning that the Chinese steel and aluminum arrives in Canada first and from there, it is shipped to the United States. Meanwhile, the Canadian prime minister announced increased funding and border vigilance “to prevent transshipment and diversion of unfairly priced foreign steel and aluminum into the North American market.”

The officials from Ottawa thought that this would satisfy the US president, granting them a permanent exemption from taxation. One of the Canadian officials said that they were just trying to “keep Trump happy” just ahead of the G7 Summit in Quebec. In the meantime, Trudeau didn’t want to comment Trump’s invocation of the 1812 War.

Source: edition.cnn.com

If America’s Frist, where is Canada?

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Repeated statements made by the United States President Donald Trump that he will make America Frist, especially when it comes to trade, has left its northern neighbor worried.

The United States is Canada’s number one trade partner and any disruption in the cross-border trade are bound to have a significant effect on Canada’s economy. Even threats of dissolving NAFTA (North American Free Trade Agreement), signed in 1998, was enough to cause turbulence on Canada’s stock market. Mr. Trump once called NAFTA “the worst trade deal ever made,” yet he agreed to enter negotiations to renew the agreement. The first deadline for the adoption of the new NAFTA was set for May 1st, but negotiating teams failed to meet it. The new date is set for July 1st, and all three sides are working fervently in order to get things done by then.

“There is positive momentum, but as we all know it won’t be done until it’s done,” Canadian Prime Minister Justin Trudeau said.

Source:uk.businessinsider.com

Despite Mr. Trudeau’s optimism, there are some people in Canada who remained worried. Milk industry representatives are among those who fear that new NAFTA will end a long-standing policy of guaranteed price for Canadian milk and steep tariffs for imported ones. Mr. Trump has particularly mentioned this system as an example of Canadians exploiting their southern neighbors through this deal.

Another sector that is under attack is logging industry. For years, Americans have argued that Canada is subsidizing its loggers by charging only minimal fees for logging on public land. Donald Trump’s administration took this one step further and imposed import tariffs of more than 20% on Canadian softwood lumber. According to Susan Yurkovich, of the British Columbia Lumber Trade Council, the only reason that industry is alive is a high demand from the United States and that any hint of the market slowing down would spell disaster for Canadian loggers.

All these have left a mark on the Canadian economy, according to Bank of Canada Governor Stephen Poloz. Too much uncertainty has even forced some investors to abandon their plans and instead of in Canada, invest south of the border, especially in the lights of tax cuts Mr. Trump introduced recently. Considering that the trade between two countries totaled $674 billion last year, it is easy to see why any turbulence could cause a massive loss of money and jobs. That is why Mr. Trudeau and his associates are spending a lot of time in Washington, trying to charm American officials into accepting the new NAFTA.

Source:netivist.org

Canadians are not the only ones pushing for the new deal. Many Americans share their opinion that NAFTA is an excellent agreement and that it should be renewed, even Republicans who are pro-trade are trying to pressure Mr. Trump into accepting it. With the new deal signed, temporary restrictions granted to Canada’s steel and aluminum manufacturers would probably become permanent, which is vital for many communities in Canada, especially Hamilton in Ontario, whose steel industry employs more than 10,000 people in the area.

Source: bbc.com

Trump Claims That NAFTA Talks Are Going Well

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As high-levels meeting continue, President Trump seems pleased with the progress of the new NAFTA deal. Talking to the French President Macron, who is on an official visit to Washington, Mr. Trump said: “Nafta as you know is moving along. I could make a deal very quickly, but I’m not sure that’s in the best interest of the United States. We’ll see what happens, but we’re doing very well.”

Source:660news.com

Mexican Economy Minister Ildefonso Guajardo and Canadian Foreign Affairs Minister Chrystia Freeland were both in meetings this week, trying to get the deal done before elections, which are scheduled in both countries. The US is also trying to resolve the issue before the trade mission to China. They have been pushing for an early May conclusion, and to have the deal approved by Congress in November. Moises Kalach of Mexican business chamber feels that if the agreement isn’t reached soon, it is best to postpone it until elections are over, although he estimated a 75% chance that the deal will be struck in the next 10 days. Currently, there are nine or ten topics that are ready for ministers’ approval, after being hashed out by the negotiating teams.

Automotive rules of origin, one of the toughest issues on the table, still remains open, as American side is trying to boost its manufacturing industry, but their proposal could wreak havoc on existing supply chain. Freeland feels that this is a lynchpin for the entire deal and has praised Americans for “creative thinking” which has sped up things considerately. Other major obstacles include a sunset clause and the dispute resolution process, both crucial to the success of the entire endeavor.

Another reason for trying to close the deal as soon as possible is the upcoming presidential elections in Mexico, where Andres Manuel Lopez Obrador, a leftist candidate, is leading the polls. Mr. Obrador has voiced concerns over the country’s oil industry and an airport under construction, both of which can have an impact on the NAFTA deal.

Source:farmfutures.com

Eric Lascelles, the chief economist for RBC Global Asset Management in Toronto, says that NAFTA is very important for all three countries and should be negotiated as soon as possible. “If NAFTA dies, protectionism increases inflation and that is not good for the bull story,” he said for Forbes. “You’re stuck with several negative consequences because inflation acts like a tax and it obliges the Fed to tighten. It would be a worse case scenario and you would face the real risk of a sudden recoil. Will we see tax cuts giveth and protectionism taketh away? I’m still hopeful.”

Source: bloomberg.com

Can Mexico and Canada Persuade Trump to sign NAFTA?

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Donald Trump had a memorable presidential campaign. It was something we have never seen, and he attacked and trounced his political opponents – every last one of them. Even “Crooked Hillary” didn’t manage to beat Trump despite being the front-runner. But one of the things Trump complained about in the campaign were trade deals and two of them in particular – Trans-Pacific Partnership (TPP) and the North American Free Trade Agreement (NAFTA). About the latter, he said that it was “the worst trade deal ever signed.”

When he became president, Mr. Trump immediately removed America from TPP, but it appears that he realized it was a bad move. He expressed his remorse for withdrawing, and he wants to get back into the club. On the other hand, in prolonged talks with Canada, the possibility that America comes to the agreement about the NAFTA deal has been born. But will Trump agree to put his name on “the worst trade deal ever signed?”

Source:nationalhogfarmer.com

According to CNBC, the representatives of the United States, Canada and Mexico are meeting on April 20th for the talks which will last for two weeks, as Robert Lighthizer, the US Trade Representative said. Trump managed to irritate both Canada and Mexico with his crazy demands and “America First” policy, but what’s good for him is that America’s neighbors are exempted from the new steel while aluminum tariffs are imposed as well.

This entire process is questionable, and there is still a long way to go for the US to sign the NAFTA. Flavio Volpe, who represents Canadian auto parts makers told Bloomberg that “on balance, we may be close enough . . . to get a deal done.” However, there are many issues which remained unresolved, and some of them include cars and agriculture, to name a few.

According to the Bank of Canada, the NAFTA remains in its initial form, but they warned that “a wide range of outcomes are still possible for the renegotiation of the North American Free Trade Agreement.” Last year when this deal was discussed both Mexico and Canada got a sense that America was the only one that would come out as the winner of the deal and they thought so for a reason. For the NAFTA deal to work, there must be a win-win-win situation. Otherwise, one of the countries will withdraw from the talks. Meanwhile, Lighthizer will have difficulties in Congress due to differences in opinions. Free-trade advocates, such as Kevin Brady, and skeptics such as Bill Pascrell will have to see the benefits of this deal, and it will be difficult for America’s Trade Representative to bridge a gap so wide.

Source:huffingtonpost.ca

In all this, Trump remains the biggest problem. Although he bragged that he could strike much better deals, he keeps struggling with the trade agreements. Furthermore, let’s not forget that he boasted about lying to Canadian Prime Minister Justin Trudeau. As if that isn’t enough already, he is constantly posting on Twitter statements which are false, and he cannot differentiate between a trade deficit and a surplus. Not only is he tweeting inaccurate things about the relationship with Canada, but he also does so with the relationship between the US and China or the US and Mexico. Trump will have to realize that deals such as NAFTA are important for this country, but with him involved in the process, the American neighbors will have to pray that he has one of the “good days.”

The whole “America First” philosophy can cost this country a great deal in the future. Trade agreements are slowly collapsing, and we will see the true value of such deals once they are gone.

Source: vanityfair.com