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Mexcentrix – Shelter Services Mexico Outsourcing
15Abr

U.S., Mexico and Canada hasten NAFTA talks as elections loom: Pena Nieto

abril 15, 2018 Jesus Aguirre NEWS

LIMA/MEXICO (Reuters) – The United States, Mexico and Canada will expedite NAFTA talks in a push to reach a deal in coming weeks, Mexico’s president said on Saturday after a meeting with the U.S. vice president and Canadian prime minister.LIMA/MEXICO (Reuters) – The United States, Mexico and Canada will expedite NAFTA talks in a push to reach a deal in coming weeks, Mexico’s president said on Saturday after a meeting with the U.S. vice president and Canadian prime minister.

On the sidelines of the Summit of the Americas in Lima, Peru, Mexican President Enrique Pena Nieto, U.S. Vice President Mike Pence and Canadian Prime Minister Justin Trudeau said they thought an agreement could be reached before Mexican elections on July 1, although they also said no deadlines had been set.

“We agreed to keep up work towards reaching a deal and to summon our special negotiating teams to accelerate their efforts,” Pena Nieto told reporters after meeting Pence.

“It was the same thing I agreed to with Prime Minister Trudeau,” Pena Nieto added. “We hope in coming weeks we can reach an agreement.”

The three countries, which created the world’s largest free trade region by forming the North American Free Trade Agreement (NAFTA) in the 1990s, are under pressure to renegotiate the deal before Mexicans elect a new president in July.

There are concerns U.S.-Mexico relations could get rockier with Pena Nieto, a centrist, unable to seek a second six-year term due to Mexico’s term limits.

U.S. President Donald Trump has threatened to kill NAFTA if it is not changed to secure better terms for U.S. workers and companies. In Mexico, leftist presidential frontrunner Andres Manuel Lopez Obrador has vowed to cut the country’s economic dependence on foreign powers and to put Trump “in his place.”

With U.S. mid-term congressional elections also pending in November, Trudeau said Canada would defer to Mexico and the United States on a timeline.

“Of course, we’d like to see a re-negotiated deal land sooner than later,” Trudeau said in a press conference, citing Mexican and U.S. elections as a factor in timing. “We have a certain amount of pressure to try to move forward successfully in the coming weeks.”

On Friday, U.S. Commerce Secretary Wilbur Ross said provincial elections in Canada in June were also a factor, and that a deal in May was possible.

Trudeau told reporters there has been “potential progress” regarding car manufacturing and “a broad range of things”, however, no new details have emerged from the Lima conference on any specific agreements.

On Friday, auto industry executives said U.S. trade negotiators significantly softened their demands to increase regional automotive content under a reworked NAFTA trade pact in an effort to seal a deal in the next few weeks.

After meeting Pena Nieto and Trudeau separately, Pence said he was leaving the summit “very hopeful that we are very close to a renegotiated NAFTA.”

“There is a real possibility that we could arrive at an agreement within the next several weeks,” Pence said.

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10Abr

Nafta Partners Seek Deal by Early May, Mexico Says

abril 10, 2018 Jesus Aguirre NEWS

MEXICO CITY—Trade negotiators from the U.S., Canada and Mexico are looking to agree on a revamp of the North American Free Trade Agreement in early May, Mexico’s Economy Minister Ildefonso Guajardo said Monday.MEXICO CITY—Trade negotiators from the U.S., Canada and Mexico are looking to agree on a revamp of the North American Free Trade Agreement in early May, Mexico’s Economy Minister Ildefonso Guajardo said Monday.

“There’s a very high probability of reaching an agreement in principle, an 80% chance,” Mr. Guajardo said in an interview on the Televisa network.

U.S. negotiators have accelerated negotiations and want to reach a deal in principle that they can present to the U.S. Congress under the existing trade promotion authority.

Mr. Guajardo, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland met in Washington last week seeking to step up negotiations and clear roadblocks on the most controversial issues, such as rules of origin for cars and light trucks manufactured in North America.

Mr. Guajardo said there were no conditions to reach an agreement in principle at that meeting, but that trade teams agreed to be in “permanent talks” instead of having a formal eighth round of negotiations. “The teams are in Washington,” he said.

The official confirmed that negotiators are discussing a proposal from the U.S. that calls for certain vehicle parts to be made in zones where wages average at least $15 an hour, which excludes Mexico, as part of the content calculation.

“The proposal would be aspirational, unreachable for Mexico in the short-term,” because the country doesn’t have such wage levels, he said. But the U.S. government first needs to reach an agreement with its own car manufacturers on such a plan.

“The devil is in the details,” Mr. Guajardo added. With U.S. eagerness to reach a deal soon, “when there’s urgency, there must be flexibility,” he said.

The Nafta countries originally set January 2018 as the goal for concluding Nafta talks, then pushed the deadline to March 31.

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04Abr

China fires back, unveils additional tariffs on $50-billion of U.S. goods

abril 4, 2018 Jesus Aguirre NEWS

China hit back quickly on Wednesday against the Trump administration’s plans to impose tariffs on $50-billion in Chinese goods, retaliating with a list of similar duties on key U.S. imports including soybeans, planes, cars, beef and chemicals.

The speed with which the trade struggle between Washington and Beijing is ratcheting up – China took less than 11 hours to respond with its own measures – led to a sharp selloff in global stock markets and commodities.

U.S. President Donald Trump, who has long charged that his predecessors served the United States badly in trade matters, rejected the notion that the tit-for-tat moves amounted to a trade war between the world’s two economic superpowers.

 

“We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.,” Trump wrote in a post on Twitter early on Wednesday.

Because the actions will not be carried out immediately, there may be room for maneuver. Publication of Washington’s list starts a period of public comment and consultation expected to last around two months. The effective date of China’s moves depends on when the U.S. action takes effect.

U.S. Commerce Secretary Wilbur Ross said in an interview with CNBC that it would not be surprising if the U.S. and China trade actions led to negotiations, although he would not speculate on when this might happen.

Investors were wondering, nonetheless, how far one of the worst trade disputes in many years could escalate.

“The assumption was China would not respond too aggressively and avoid escalating tensions. China’s response is a surprise for some people,” said Julian Evans-Pritchard, senior China economist at Capital Economics, noting that neither side had yet called for enforcement of the tariffs.

“It’s more of a game of brinkmanship, making it clear what the cost would be, in the hopes that both sides can come to agreement and none of these tariffs will come into force,” said Evans-Pritchard.

U.S.-made goods that appear to face added tariffs in China based, on an analysis of Beijing’s list, include Tesla Inc electric cars, Ford Motor Co’s Lincoln auto models, Gulfstream jets made by General Dynamics Corp and Brown-Forman Corp’s Jack Daniel’s whiskey.

Unlike Washington’s list, which was filled with many obscure industrial items, China’s list strikes at signature U.S. exports, including soybeans, frozen beef, cotton and other key agricultural commodities produced in states from Iowa to Texas that voted for Trump in the 2016 presidential election.

“China is also trying to weaken our will by targeting certain segments of our economy,” White House trade adviser Peter Navarro said in an interview with National Public Radio.

“But let’s remember: we buy five times more goods than they buy from us. They have a lot more to lose in any escalation in this matter.”

POLITICAL TARGETS

While Washington targeted products that benefit from Chinese industrial policy, including its “Made in China 2025” initiative to replace advanced technology imports with domestic products in strategic industries such as advanced IT and robotics, Beijing’s appears aimed at inflicting political damage.

Tobacco and whiskey, for example, are both on Beijing’s list and are produced in states including Kentucky, home of Senate Majority Leader Mitch McConnell.

Beijing’s list of 25 per cent additional tariffs on U.S. goods covers 106 items with a trade value matching the $50-billion targeted on Washington’s list, China’s commerce and finance ministries said.

“This is a real game changer and moves the trade dispute away from symbolism to measures which would really hurt U.S agricultural exports,” said Commerzbank commodities analyst Carsten Fritsch.

China’s tariff list covers aircraft that would likely include older models such as Boeing Co’s workhorse 737 narrowbody jet, but not newer models like the 737 MAX or its larger planes.

A Beijing-based spokesman for Boeing, the largest single U.S. exporter to China, declined to comment.

Beijing’s announcement triggered heavy selling in global financial markets, with U.S. stock futures sliding 1.5 per cent and U.S. soybean futures plunging nearly 5 percent and on track for their biggest fall since July 2016. The dollar briefly extended early losses, while China’s yuan skidded in offshore trade.

RAPID RESPONSE

Hours earlier, the U.S. government unveiled a detailed breakdown of some 1,300 Chinese industrial, transport and medical goods that could be subject to 25 per cent duties, ranging from light-emitting diodes to machine parts.

The U.S. move, broadly flagged last month, is aimed at forcing Beijing to address what Washington says is deeply entrenched theft of U.S. intellectual property and forced technology transfer from U.S. companies to Chinese competitors, charges Chinese officials deny.

Foreign ministry spokesman Geng Shuang said China had shown sincerity in wanting to resolve the dispute through negotiations.

“But the best opportunities for resolving the issues through dialog and negotiations have been repeatedly missed by the U.S. side,” he told a regular briefing on Wednesday.

The tariff list from the office of U.S. Trade Representative Robert Lighthizer followed China’s imposition of tariffs on $3-billion worth of U.S. fruits, nuts, pork and wine to protest U.S. steel and aluminum tariffs imposed last month by Trump.

WILL CONSUMERS PAY?

Many consumer electronics products such as cellphones made by Apple Inc and laptops made by Dell were excluded from the U.S. list, as were footwear and clothing, drawing a sigh of relief from retailers who had feared higher costs for American consumers.

A U.S. industry source said the list was somewhat unexpected in that it largely exempts major consumer grade technology products, one of China’s major export categories to the U.S.

“The tech industry will feel like overall it dodged a bullet,” the source said, but added that traditional industrial goods manufacturers, along with pharmaceuticals and medical device firms, could suffer.

Many U.S. business groups support Trump’s efforts to stop the theft of U.S. intellectual property but have questioned whether tariffs are the right approach. They warn that disruptions to supply chains that rely on Chinese components will ultimately raise costs for consumers.

“Tariffs are one proposed response, but they are likely to create new challenges in the form of significant added costs for manufacturers and American consumers,” National Association of Manufacturers President Jay Timmons said in a statement.

ALGORITHM SHIELDS U.S. CONSUMERS

USTR developed the tariff targets using a computer algorithm designed to choose products that would inflict maximum pain on Chinese exporters but limit damage to U.S. consumers.

A USTR official said the list got an initial scrub by removing products identified as likely to cause disruptions to the U.S. economy and those that needed to be excluded for legal reasons.

“The remaining products were ranked according to the likely impact on U.S. consumers, based on available trade data involving alternative country sources for each product,” the official, who spoke on condition of anonymity, told Reuters.

Many products in those segments appear on the list, including antibiotics and industrial robots and aircraft parts.

USTR did include some key consumer products from China, including flat-panel television sets and motor vehicles, both electric and gasoline-powered, with engines of 3 liters or less.

A Reuters analysis that compared listed products with 2017 Census Bureau import data showed $3.9-billion in flat-panel TV imports, and $1.4-billion in vehicle imports from China.

USTR has scheduled a May 15 public hearing on the tariffs, which were announced as the result of an investigation under Section 301 of the 1974 U.S. Trade Act.

China ran a $375-billion goods trade surplus with the United States in 2017, a figure that Trump has demanded be cut by $100-billion.

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03Abr

Mexico presidential candidates open race slamming Trump

abril 3, 2018 Jesus Aguirre NEWS

Mexico’s top presidential candidates launched their campaigns today vowing to take a harder line against Donald Trump, with the leftist front-runner vowing his country is done being the US president’s “pinata.”

Just as candidates were putting the finishing touches on their opening campaign speeches for Mexico’s July 1 elections, Trump crashed the kick-off party via Twitter, accusing the country of doing “very little” to stop illegal migration and drugs, and renewing his threat to axe the North American Free Trade Agreement (NAFTA).

The veteran leftist leading in the polls, Andres Manuel Lopez Obrador, and his conservative rival, Ricardo Anaya, both hit back hard at the Republican president, whose anti-Mexican diatribes and insistence that Mexico pay for his planned border wall have made him supremely unpopular here.

“We are going to be very respectful toward the United States government, but we are also going to demand that (the United States) respect Mexicans,” Lopez Obrador told a cheering crowd in Ciudad Juarez, on the US border.

“Neither Mexico nor its people will be the pinata of any foreign government.”

Lopez Obrador, a former Mexico City mayor, repeated his long-standing criticism of Trump’s planned border wall.
“Let this be heard near and far: neither security issues nor social problems can be resolved with walls,” he said, condemning Trump’s “mistaken foreign policy” and “contemptuous attitude toward Mexicans.”

Anaya, who is locked in a brutal battle for second place with ruling party candidate Jose Antonio Meade, vowed to answer Trump with a “strong and dignified stance,” and defied the US president to take action on security issues on his own side of the border.

“Just as the United States is worried about undocumented migrants, Mexico is worried about gun trafficking,” he said.

“Eighty percent of the guns used to kill people in our country come from the United States,” he added, in reference to a wave of drug cartel-fueled violence that has left more than 200,000 people dead in Mexico since 2006.

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02Abr

U.S. explores including wage factor in NAFTA auto rules: sources

abril 2, 2018 Jesus Aguirre NEWS

MEXICO CITY (Reuters) – U.S. trade negotiators have floated a plan to introduce rules under a reworked NAFTA that stipulate a certain amount of automotive production must be carried out in areas paying higher salaries, two sources familiar with the matter said.

Setting such wage requirements for the auto industry under the North American Free Trade Agreement could benefit the United States and Canada, whose trade unions say that lower Mexican pay has caused a drift in manufacturing capacity to Mexico.

The U.S. plan aims to explore what percentage of output could be in areas paying higher salaries, and at what levels of remuneration the scheme could be targeted, said one of the two sources, who spoke on condition of anonymity.

Mexico’s government and its NAFTA partners were all analyzing the U.S. idea, the source said.

The news follows a week in which hopes have risen that the United States, Mexico and Canada could be closer to brokering agreement on one of the thorniest issues surrounding renegotiation of NAFTA – content levels for the auto industry.

Last week, industry sources said that the United States had withdrawn a divisive demand that at least 50 percent of NAFTA auto content should come from the United States.

The wage idea was floated after that, the sources said.

The United States, which also wants to raise the minimum auto content threshold for the NAFTA region to 85 percent from 62.5 percent, is exploring setting a wage floor at $15 per hour for the salary component, the second of the sources said.

However, if a deal is reachable, it would likely end up at a lower level than that, the source added.

Mexico’s economy ministry had no comment on the matter, a ministry spokesman said.

Alex Lawrence, a spokesman for Canadian Foreign Minister Chrystia Freeland, said it was a question for the office of U.S. Trade Representative (USTR) Robert Lighthizer “as to whether they are going to present something along those lines.”

A USTR spokeswoman could not immediately be reached for comment.

Freeland’s office said she would be meeting her NAFTA counterpart Mexican Economy Minister Ildefonso Guajardo on Friday in Toronto to discuss the ongoing renegotiation.

U.S. President Donald Trump has railed against jobs migrating from the United States to Mexico, and threatened to dump the trade deal if it cannot be reworked to his liking.

Making tariff-free access for the industry under NAFTA dependent on using higher-cost labor could reduce the allure of Mexico either by making the target unreachable, or by obliging auto makers to pay higher salaries to Mexican workers.

That could send more work to U.S. or Canadian plants.

Progress on auto rules have spurred optimism that the three sides, which have been locked in sluggish talks for months, could reach a deal “in principle” in the coming weeks.

No date has yet been agreed for another formal round of talks, one of the sources said. Mexico said earlier this month the talks had been tentatively set for April 8 in Washington.

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26Mar

Mexico’s Chedraui buys Fiesta Mart to grow U.S. Latino sales

marzo 26, 2018 Jesus Aguirre NEWS

MEXICO CITY (Reuters) – Mexican grocer Chedraui, a powerhouse in the fast-growing Latino market in the United States, said on Sunday it had bought smaller U.S. grocery store chain Fiesta Marts for an undisclosed amount.

Grupo Comercial Chedraui (CHDRAUIB.MX), as the company is formally know, announced the acquisition of Texas-based Fiesta Marts’ 63 stores in a brief statement on Sunday, emphasizing how the deal will strengthen its reach with Mexican-American shoppers.

A Chedraui official did not immediately respond to calls seeking additional details on the acquisition. 

Chedraui, based in Veracruz state, already runs 59 El Super grocery stores, mostly in California but also in other southwestern U.S. states, where shoppers are courted with Spanish-language ads promising the lowest price.

Burt Flickinger, a grocery sector consultant with Strategic Resource Group, said the acquisition will likely make the company the top retailer for Spanish-speaking shoppers in the United States, besting even retail giants like Walmart for the coveted demographic.

“El Super is (already) a fierce winner in the wars in the stores, he said, referring to the chain’s dominance with Latino consumers.

The group is the fastest growing consumer constituency in the United States, he added.

 
Chedraui made the purchase of Fiesta Marts through its U.S. unit, Bodega Latina, and while the company’s statement did not provide a final price tag, it did say the acquisition reflects 0.2 percent of the firm’s projected 2018 sales and 6.6 percent of its earnings before interest, taxes, depreciation and amortization (EDITDA) for the year.

In Mexico, Chedraui operated 170 stores as of the end of last year.

The company said earlier this year it expects to invest around 3.8 percent of its consolidated revenue in assets, which it said should see sales growth reach as high as 6 percent in 2018.

Chedraui’s sales growth totaled 3.3 percent last year.

 
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21Mar

At opening of huge new Texas plant by Mexican company, NAFTA viewed as real guest of honor

marzo 21, 2018 Jesus Aguirre NEWS

CLEBURNE — What began as a ribbon-cutting for a new investment by a Mexican company in Texas evolved into a lovefest for NAFTA on Tuesday when speaker after speaker extolled the basic principles behind the embattled program.

In remarks by everyone from Texas Gov. Greg Abbott to Mexico’s secretary of foreign affairs, the focus was on how the decades-old pact, which is being renegotiated, has benefited the United States and especially Texas.

The official occasion was the opening of a  150,000-square-foot state of the art production, manufacturing, and distribution facility built by Mexico’s largest pasta manufacturer, La Moderna.

Abbott said he sees the opening of the company’s first U.S. production plant as emblematic of the “multi-century relationship that has existed between Texas and Mexico” and the robust trade that has developed “to the benefit of Mexico, Texas and the United States.”

“We want to ensure that that trading relationship continues,” he said.

As a mariachi band provided the soundtrack for the celebration, Abbott joined Luis Videgaray Caso, Mexico’s secretary of foreign affairs, and executives with La Moderna, based in Toluca, Mexico.

The $50 million facility is part of a Mexico-to-U.S. investment pipeline that stood at $34.4 billion in 2016, up nearly 40 percent since 2010.

The project

First conceptualized five years ago, the Cleburne plant offers the growing pasta maker better access to U.S. markets and a hedge in case lumbering discussions about the fate of the North American Free Trade Agreement head south.

“We’re very enthusiastic about this project,” said Luis Miguel Monroy, chairman and chief executive of La Moderna who was in Cleburne for the celebration. “Most of our raw materials will come from Mexico. We needed a place close to the border. Baltimore and places farther east will not work as well as Dallas.”

Videgaray spoke of the strong trading relationship between Texas and Mexico, adding “we should not lose sight of what is at stake here.”

“I don’t know what is going to happen with NAFTA,” he said. “We’re very close to make-or-break time. Hopefully, we’ll get there.”

Location, demographics along with tax incentives from Johnson County, were among the early motivators that drew La Moderna to the Lone Star State. Since the 2016 presidential election, the project looks to pay additional dividends.

“We are better positioned now with a plant here in case NAFTA is not renewed,” said Monroy, 55, who joked that he plans to spend more time in North Texas and raise longhorn cattle.

La Moderna’s plant, located on 16.5 acres near a sprawling Walmart distribution center, will be able to make 8,818 pounds of product an hour and 7.4 million pounds in a month.  While well-known for its pasta, the company, a third-generation food maker, also makes cookies, flour and semolina, a wheat product used in pasta.

In five years, Monroy hopes to double his output levels by swelling into space that’s been built but is not yet being used.

“We have enough room to expand for many years to come,” he said in advance of the official ribbon cutting, marking a major expansion of the company his father purchased from the founders in 1959.

A growing trend

La Moderna is not the only Mexican food maker drawn to Texas.  Late last year, Gruma opened a plant in Dallas able to produce 30 million tortillas daily.

And while Bimbo Bakeries USA has moved its headquarters to the East Coast from its longtime home in Fort Worth, it still has seven bakeries and 133 sales centers in Texas, where it employs 1,772 workers.

That message — that Mexican firms are bringing jobs to the U.S. — gets lost in the negative portrayal of NAFTA, Monroy said.

“Some people mention that the jobs … flow one way,” said Monroy, who will employ 100 workers in Cleburne, most of them Texans.  “That is false.”

Experts in foreign investment say it’s not surprising to see Mexican firms expanding north.

“Companies tend to want to get close to their customers,” said Aaron Brickman
Senior Vice President, strategy and  development with the D.C.-based Organization for International Investment.

“It cuts down on … transit time.”

When companies “ see a substantial portion of their production being exported to a single market, they will start looking at whether there can be efficiencies gained by producing in that market rather than just exporting to that market,” he added “ It can help the bottom line.”

These days, some companies looking at cross-border commerce are anxious.

While talks to amend NAFTA continue, President Donald Trump has made it clear he’s not a fan.

Noting that his dad was once a bullfighter, Monroy said he’s not afraid.

“We have always been welcomed in Texas,” he said. “We’ve always had the doors open for our investment.”

And he is optimistic that the strong track record of NAFTA will speak for itself.

“We think at the end of the day the economics will prevail. Politicians might say many things but the economics will prevail.”

 
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20Mar

EU trade chief demands exemption from US steel tariffs

marzo 20, 2018 Jesus Aguirre NEWS

BRUSSELS (AP) — The European Union’s top trade official says the 28-nation bloc should be excluded from U.S. President Donald Trump’s new steel and aluminum tariffs, which enter force this week.

EU Trade Commissioner Cecilia Malmstrom said Monday that “the EU should be excluded as a whole” and that she would convey this message to U.S. representatives in talks in Washington on Tuesday.

 

Malmstrom said the EU is willing to address the problem of steel overproduction, which she says is the real cause of pain for the U.S. and European industries.

Trump is imposing tariffs of 25 percent on imported steel and 10 percent on aluminum, but is temporarily exempting Canada and Mexico.

The EU has drawn up a list of “rebalancing” duties to slap on U.S. products if it is not exempted.

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19Mar

Severing NAFTA ties harms much more than trade

marzo 19, 2018 Jesus Aguirre NEWS

U.S. ties with Mexico and Canada touch the daily lives of more Americans than ties with any other two countries in the world. Trade, border connections, tourism, family ties and mutual security concerns link us closely, but we are endangering those links and our wellbeing by a contentious modernization of the North American Free Trade Agreement (NAFTA). 

Now is the time to forge as much agreement as possible before elections in Mexico (July presidential and congressional elections) and the U.S. (November congressional elections) close the political space for agreement.

The best outcome would be to conclude an agreement, but given the amount of work left to do, that may not be possible. If the three countries are able to agree conceptually on big-ticket items, however, that would add momentum, allow technical modernization talks to continue and reduce uncertainty for our economy. 

The continuing discussions on the difficult issue of “rules of origin” for automobiles at the eighth negotiating round in April are very important. We need a full court press for progress. This will not be easy, but pulling out of NAFTA or leaving it weakened would badly harm U.S. businesses, farmers and workers and set the stage for a contentious relationship with Mexico’s new government. 

What is at stake?

  • $1.24 trillion in annual trade — more than U.S. trades with the EU and 1.9 times more than with China;
  • nearly 14 million jobs;
  • cross-continental production networks that provide lower costs to U.S. consumers and allow U.S. companies to compete more effectively with China and others;
  • close cooperation on intercepting terrorists or bad actors before they reach the U.S.;
  • an agreed U.S.-Mexico strategy for fighting drug trafficking;
  • U.S.-Mexican cooperation on Central American and third country migration; and
  • North American energy cooperation that puts energy security within our grasp.

Competing with China, supporting U.S. workers and growing the economy

It is important to underscore that the “big game” for the U.S. is out-competing a rising China and the other exporting powers. Our two neighbors provide the skills, investment and market specialization to do that more effectively. 

We need to take other steps in order to become more competitive with China, including supporting U.S. workers with much better workforce development and adjustment programs. It will be much harder to compete well without a revitalized NAFTA, however.

A recent study, for example, finds that enhancing economic integrationacross the U.S.-Mexico border can add 700,000 to 1.4 million new jobs on the U.S. side of the border and $69-$140 billion just in U.S. border state economies.

Tremendous costs to ending NAFTA

Serious studies document the potential economic costs of ending NAFTA. Estimates include 250,000-1.2 million U.S. jobs lost and millions more in Mexico and Canada. Projections suggest GDP declines up to $120 billionwith lost exports and costlier imports. Stock markets would likely experience turmoil. 

The U.S. auto industry would be hard hit, as would farmers who have Mexico and Canada as two of their top markets, with over $40 billion in annual sales. Farmers are already seeing the potential effects, as buyers in Mexico purchased up to 900-percent more in agricultural products from Brazil than from the U.S. over the last year.

This is why farm state governors and senators are urging the White House to preserve NAFTA. U.S. consumers would have to pay more for goods now produced in North America’s value chains.

Homeland security partners

Mexico and Canada have been watching our backs. Since 9/11, the U.S. has significantly deepened homeland security cooperation with both neighbors. The three governments share, develop and act on intelligence about threats to the U.S. much more than in the past.

Canada invested heavily in border infrastructure and homeland security after 9/11, gradually building the capacity, programs and willingness to cooperate with the U.S. well beyond the border against potential threats.

Mexico similarly now works more closely than ever before with the Department of Homeland Security and others, sharing information to identify and intercept potentially dangerous actors. Significant new security cooperation agreements are in the works. Recognizing this, 10 former top U.S. military commanders just wrote President Trumpsupporting a NAFTA agreement.

Cooperation can continue to deepen around a modern NAFTA or it can wither among embittered attitudes and public criticisms. Already in Mexicoand Canada there have been sizable drops in favorable views of the U.S.

In 2017, 65 percent of Mexicans expressed unfavorable views of the U.S. The danger with Mexico is that we move back to the narrative before NAFTA, when Mexico and the United States were called “distant neighbors.” 

Breakthroughs needed now 

To move rapidly toward agreement, all three parties must show flexibility. The United States has to be willing to work constructively around the hardline positions it has taken on such issues as rules of origins for autos, a sunset clause for the agreement, dispute settlement mechanisms and government procurement.

Canada and Mexico need to be creative in addressing underlying U.S. concerns. Mexico should accept a strong treaty chapter on labor rights. Canada needs to be flexible, including on support for its dairy industry. All three need to grapple with the new U.S. steel and aluminum tariffs.

The U.S. put these in the mix apparently to gain leverage, but they make it harder politically for either neighbor to show movement. 

In addition to the big-ticket items, much other work remains on less controversial issues, which leads some to predict a long negotiation ahead. The key is to make as much progress as possible this spring. Agreement on big items can add momentum, allow work to continue through the U.S. and Mexican political seasons and promote economic growth in all three economies. 

Progress requires that the U.S. put aside a zero-sum calculus. That perspective does not make for a good long-term relationship with neighbors. We have the opportunity to make the 21st century, the “North American century” by forging a good NAFTA 2.0. The alternative path leaves the field to adversaries and competitors. Let’s drive ahead for a stronger North America.

 

 

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17Mar

Trudeau Offers to Pick Up Pace on Nafta Ahead of Mexico Election

marzo 17, 2018 Jesus Aguirre NEWS

Canadian Prime Minister Justin Trudeau said he’s willing to accelerate Nafta talks to get ahead of U.S. and Mexico election pressures if needed, striking an upbeat tone on the fate of the trade pact.

Trudeau, speaking in an interview with Bloomberg Television’s Michael McKee, said he was “very optimistic we’re going to be able to get to a win-win-win” deal on Nafta, while downplaying the impact of talks on business investment.
 
“We’re happy to accelerate so we can accommodate them. Canada’s not the one creating time pressures at the table and we’ll continue to work at whatever speed the others want,” Trudeau said, speaking at a steel mill in Regina, Saskatchewan. “But the level of collaboration, coordination, integration of our economies has positioned North America better able to take on the world, and I know there are even greater opportunities to that.”

President Donald Trump exempted Canada and Mexico last week from tariffs on steel and aluminum, but has regularly singled out his northern neighbor for being unfair with the U.S. on trade. Incoming White House economic adviser Larry Kudlow said earlier Wednesday that Trudeau “has been on the phone with the president” making concessions on Nafta negotiations “hand over fist.” Trudeau brushed aside the comments, saying he’s standing up for Canadians and won’t negotiate in public. “And I’m not flinching on that,” he said.

 

Trudeau said the decision to exempt Canada from tariffs imposed on grounds of national security “just makes sense,” given the defense ties between the countries. He said Trump had told him at the Group of Seven summit last year that Canada would be exempt.

“And yes, there was a lot of sort of reflection and back and forth, but he ended up following through exactly as he said,” Trudeau said. “The president has said as long as there’s a Nafta there won’t be any tariffs. We have a Nafta now, we will have a Nafta once we improve it. That sounds to me like we’re pretty good on not getting tariffs.”

The Bank of Canada warned this week that business investment in Canada is being impacted by uncertainty over Nafta and U.S. trade measures. In the interview, however, Trudeau downplayed the impacts of Nafta uncertainty, saying his country remains a good place to invest.

“There’s a lot of investors who’ve realized Canada is a very good place to invest for the long-term. We have a long-term stability on economy, politics, on social, on immigration that is very very attractive,” he said. “Yes, there are still a couple of people saying, ’Oh, what is going to happen on Nafta?’ But I’m really confident we’re going to get to the right place on Nafta.”

Asked about recent tariffs on Canadian newsprint, Trudeau said some companies are trying to profit off of a “protectionist approach.” He cited a trade challenge by Boeing Co. against Canadian manufacturer Bombardier Inc. over its C Series commercial jet, that eventually led to a partnership between Bombardier and Airbus SE, Boeing’s rival.

“Unfortunately what Boeing did actually just drove the great Canadian C Series into the arms of their biggest competitor and now we have a great partnership with Airbus, so sometimes that’s going to backfire on American companies challenging Canada,” Trudeau said.

Trudeau said Canada has been concerned about potential steel dumping by China for several years but also wants a strong trading relationship with the country, a situation that requires what he called a “balancing act.” He has previously singled out China and Russia on steel oversupply, and floated the notion of new tariffs to stop steel from flooding Canada after the U.S. tariffs kick in.

 

 

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