Mexican Trade Team: Regardless of Canada The Deal Between the U.S. and Mexico Still Stands…

So much good news: WASHINGTON (Reuters) – The trade deal between the United States and Mexico will stand even if Canada does not come to an agreement with the Trump administration in the renegotiation of the North American Free Trade Agreement (NAFTA), Mexico’s foreign minister said on Monday.

“If for any reason the government of Canada and the United States do not reach an agreement, we already know that there will still be a deal between Mexico and the United States.”

~ Mexican Foreign Minister Luis Videgaray (link)

Remember those “private meetings” between Jesus Seade and Robert Lighthizer?

It is said: a picture is worth a thousand words.  Cue the audio visual:

The incoming Mexican President, Andrés Manuel López Obrador,(AMLO)’s representative is Jesus Seade. The outgoing Mexican President Pena Nieto’s representative is Mexican Secretary of Economy Idelfonso Guajardo.

Why the joy in Seade and the defeated Guajardo?  The answer is in the details:

One of President Trump’s principal objectives in the renegotiation is to ensure the agreement benefits American workers.  The United States and Mexico have agreed to a Labor chapter that brings labor obligations into the core of the agreement, makes them fully enforceable, and represents the strongest provisions of any trade agreement.

Key Achievement: Worker Representation in Collective Bargaining

The Labor chapter includes an Annex on Worker Representation in Collective Bargaining in Mexico, under which Mexico commits to specific legislative actions to provide for the effective recognition of the right to collective bargaining.

BOOM !!

Key Achievement: Labor Rights Recognized by the International Labor Organization

The Labor chapter requires the Parties to adopt and maintain in law and practice labor rights as recognized by the International Labor Organization, to effectively enforce their labor laws, and not to waive or derogate from their labor laws.

Additionally, the chapter includes new provisions to take measures to prohibit the importation of goods produced by forced labor, to address violence against workers exercising their labor rights, and to ensure that migrant workers are protected under labor laws.

Key Achievement: New Labor Value Content Rule

To support North American jobs, the deal requires new trade rules of origin to drive higher wages by requiring that 40-45 percent of auto content be made by workers earning at least $16 USD per hour.

Why is this important?

Massive consequences.

♦First, this is the part where AMLO gets a key win for his new Mexican economic agenda; the right of workers to form collective bargaining agreements, ie. unions.  Mexico’s President-elect Andrés Manuel López Obrado is not only coming into office with a mandate, he is also bringing with him a majority parliament on his agenda.

By putting the rights of Mexican workers in the forefront two win/win objectives are accomplished for both AMLO and Trump.  (1) The reason U.S. corporations moved to Mexico was partly to exploit cheaper labor.  Now that those corporations have invested themselves in Mexico (sunk cost) they will have to agree to collective bargaining; thereby raising the standard of living for Mexican workers (an AMLO goal).  (2) For future investment considerations the low-wage incentive for relocation of U.S. manufacturing is now eliminated (a Trump goal).

Multinational vulture corporations can no longer bribe local Mexican officials for low-wage regional labor.  The Mexican worker, with AMLO legislation, will have the ability to fight off exploitation.

Manufacturing corporations will need to raise wages (AMLO win), and corporations will be less likely to move out of the U.S. based on the wage analysis portion of the total cost equation (Trump win).  I have no doubt this was part of the ‘closed-door’ private discussions between Seade and Lighthizer. No doubt.

♦Secondly, how is the left-wing political opposition in Canada and the U.S. going to fight against this deal which includes protections for collective bargains and union representation?   Trump fractures the Democrats/Liberals by supporting a policy that they claim is at the heart of their support base.   Do you really think Senator Patrick Leahy, or Senator Bernie Sanders are going to go on record against organized labor?

How can Justin or Chrystia from Canada going to argue against higher Mexican wages?

The U.S./Mexico 75% auto rule of origin for manufacturing parts works in synergy with the demand that 45% of those manufacturing components must come from assembly and manufacturing wages of $16/hr or higher.   In essence AMLO and Trump are controlling the calculations within the Total Cost of Manufacturing.

Watch the Canadian Leftists try to reconcile today’s events while not yet absorbing how the projected Mexican wage increases are factored into the total agreement. (first six minutes):

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Here’s the Mexican trade team press conference.  Use the ‘closed caption’ for the English sub-titles:

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Within this agreement President-elect Lopez-Obrador  and President Trump have fractured Wall Street’s exploitative multinational Big Club.  No doubt, despite his hundreds of millions spent, U.S. Chamber of Commerce Tom Donohue is finally seeing significant defeat on the horizon.

The first White House visit by AMLO is going to be epic!

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This entry was posted in Auto Sector, Big Government, Big Stupid Government, Canada, China, Decepticons, Deep State, Dem Hypocrisy, Donald Trump, Economy, Election 2018, energy, Environmentalism, European Union, History, Legislation, media bias, Mexico, NAFTA, President Trump, Trade Deal, Uncategorized, US dept of agriculture, US Treasury, USA. Bookmark the permalink.

249 Responses to Mexican Trade Team: Regardless of Canada The Deal Between the U.S. and Mexico Still Stands…

  1. BoomerCat says:

    Curious about the intellectual property sections of the agreement. The President mentioned it in passing during the call, and some of the people interviewed on Fox also mentioned it.

    Liked by 1 person

  2. Jedi9 says:

    Tequila!

    Like

  3. Knickoftime says:

    There are 5 big domestic Canadian banks. US banks have not been allowed to set up shop in Canada, but most Canadian banks have US subsidiary banks for operating in the US. Those 5 banks are some of the most profitable banks in the world for their size. No competition.

    The US/Mexican agreement drops barriers for US financial institutions to provide financial services in Mexico.

    In order to get a deal with the US, if Canada has to provide the same reciprocity for financial services as Mexico just signed up for, you should be able to hear the pants filling in Toronto, Montreal & Ottawa all the way to Florida. This point alone will have a huge impact on the Canadian economy and everyday Canadians as there will finally be competition to the CDN banks, who have been gouging Canadians for years. To be fair though, no banking system in the world fared better through the 2008 crisis than Canadian banks. No government bailout necessary. They are just too fat and need the competition.

    Trump will be freeing ordinary Canadians if he takes the Canadian banks down a peg, forces competition in the agricultural sector ( dairy) and forces manufacturing back to North America as Canada will get some small piece of it. Canada’s manufacturing was moved to China in the 90s too when the politicians sold the Canadian worker out when NAFTA was signed.

    Man’s a genius and watching him solve multiple problems with interlocking strategies that benefit the many, and not the few, is one of the greatest learning experiences of my life. Epic times!

    Liked by 4 people

    • lokiscout says:

      ” Canada’s manufacturing was moved to China in the 90s too when the politicians sold the Canadian worker out when NAFTA was signed.”

      Absolutely! Canadian Steel also suffered with many mill closings and steel production moved to China. Canada essentially became a one trick pony. It became the assembly house for Chinese made parts (Auto and other) allowing duty free import of the finished product into the US under NAFTA.

      Canadian workers stand to reap the benefits of a reborn manufacturing class just as much as the US once they oust the current government and find Pro Canada leadership.

      Liked by 1 person

  4. Brant says:

    So, working to raise the economic strength of a long neglected demographic here in the states and another demographic in Mexico? Interesting. We raise their economic strength and they will buy more of our stuff. Ouch, that’ll sure leave a mark on a US political party.

    Liked by 2 people

  5. PMadison says:

    I’d like to note that AMLO has a representative at the table even before his presidency officially begins. I note that only because, contrary to what the MSM would have the low info voters believe, it’s not unusual after an election for the winner to begin participating in statecraft immediately, as the winner will be in the driver’s seat going forward.

    Liked by 2 people

  6. Nunya Bidness says:

    The labor and wage provisions are huge. The idiot “Resistance” Senators would vote against a $16 minimum wage in the industry. Egg on face is a good look for those goobers.

    Liked by 1 person

    • lokiscout says:

      No they will spin it that the $16 wage will apply to American workers while the CEO’s get Millions. The $16 minimum wage applies to Mexican workers. Still well below US scale. But I am waiting for Crazy Max, Fauxcahontas and Sleazy Chuck to lie otherwise.

      Liked by 1 person

  7. Bruce Gee says:

    Ironically, there is a sort of “wall” being built by forcing Mexico into allowing workers to organize. The honest ones will tend to stay put, allowing our border resources to be focused on whoever is left trying to cross the border.
    My only concern is the deeply rooted corruption that is a cultural part of life in Mexico. They have their own deep state and it extends into every village in the country. I love Mexico (my son lives and teaches there), and hope they can find a way to change their ways.

    Like

  8. SharkFL says:

    In addition to the economic announcements, I’m sure there have been extensive, high-level discussions about rolling up the cartels, cutting the C_A strings and, finally bringing some peace back to the good people of Mexico who have been terrorized for decades. This is the biggest issue and one that can solve most of the others.

    Raise wages, provide real protections for everyday Mexicans, and allow for industry to return. Suddenly all those Mexican flag -waving people in LA will see a reason to make their life in their home country instead of ours.

    Liked by 1 person

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