Mexican Senate Overwhelmingly Ratifies USMCA 114-4…

The construct of the USMCA was always anticipated to sail through ratification in Mexico because, well, quite frankly, the USMCA is specifically structured to provide great benefit toward Mexico. It’s not because the language within the USMCA favors Mexico, but rather the rules are centered around deregulating industry, and lifting wages.

The rules-of-origin, in combination with mandated minimum wage rates attached to the manufacturing sector; and the fact that Mexico has the lowest current wage rates in North American; specifically means that Mexican workers stand to get the biggest financial benefits… and that’s ok.  Trump, Lighthizer and Ross designed it that way.

The U.S. benefits when the Mexican wage rates are raised.  Heck, there was a time in the early negotiations, after Canada was kicked out of the room, when Secretary Wilbur Ross was advocating for an $11/hr minimum wage in Mexico, and the Mexicans were like ‘whoa, wait a minute, too high, too high’… [It was quite funny, because Trump was being called racist simultaneous to him trying to give a $85/day pay raise to Mexicans (from $3/day)].

MEXICO CITY (Reuters) – Mexico on Wednesday became the first country to ratify the United States-Mexico-Canada Agreement (USMCA) agreed late last year to replace the North American Free Trade Agreement (NAFTA) at the behest of U.S. President Donald Trump.

By a vote of 114 in favor to 4 against, Mexico’s Senate backed the deal tortuously negotiated between 2017 and 2018 after Trump repeatedly threatened to withdraw from NAFTA if he could not get a better trade agreement for the United States.

Mexican President Andres Manuel Lopez Obrador had already anticipated ratification this week in the Senate, where his leftist National Regeneration Movement (MORENA) and its allies have a comfortable majority in the 128-member chamber.

There has been little parliamentary opposition in Mexico to trying to safeguard market access to United States, by far Mexico’s top export destination, and the trade deal was approved with overwhelming cross-party support in the Senate.

Mexico sends around 80% of its exports to the United States, and Trump last month vowed to impose tariffs on all Mexican goods if Lopez Obrador does not reduce the flow of U.S.-bound illegal immigration from Central America.

Lopez Obrador says he wants to avoid conflict with Trump (read more).

The USMCA deal positions Mexico to retain their current multinational investments; and through a series of sector-by-sector standards on origination the deal simultaneously closes the fatal NAFTA loophole.

The agreement makes an economic manufacturing partnership between the U.S. and Mexico; and for assembly products third parties will have to produce parts and origination material within the U.S. and Mexico.

Here’s a good example in the auto-sector.  The new USMCA agreement requires 75% of automobile parts made in North America; and 45% must come from plants with minimum labor costs ($16/hr), or face tariffs upon export to the U.S.  Additionally, the total source-origination rate of 75% USMCA product is higher than everyone thought possible.

This 75% country-of-origin level was possible because President Trump cut out the corporations (ie. U.S. Chamber of Commerce) from having any influence over the agreement.  Most people probably don’t know, but the USMCA was the first trade deal negotiated without multinational corporations in the room.

Example of downstream consequences/benefits: German auto-maker BMW recently built a $2 billion assembly plant in Mexico (just came on-line).  Most of their core parts were coming from the EU (steel/aluminum casting components) and/or Asia (electronics). Now the assembly plant will have to source 75% of the auto-parts from the U.S. and Mexico, with 45% of those parts from facilities paying $16/hr.  The Result: BMW will need to modify their supply chain and build auto parts in the U.S. and Mexico. [That’s Exactly What Happened]

Canada doesn’t gain as much benefit because: (1) Canadian environmentalists don’t allow heavy industrial manufacturing; and (2) the new USMCA closes the NAFTA loophole and blocks Canada from brokering their ‘assembly process‘ access to the U.S. market.

However, knowing this, when President Trump applied the global Steel and Aluminum tariffs toward Canada – he created a USMCA benefit for Canada literally out of thin air.  In exchange for Canada agreeing to the terms of the USMCA, President Trump has now agreed to drop the Steel and Aluminum tariffs against Canada.

Canada will ratify the agreement because they have no choice if they want to keep access to the U.S. market for their products.  I would predict Canadian ratification within a few weeks (before mid July).

Domestically, Nancy Pelosi is playing ‘OrangeManBad’ politics with the agreement; but once Canada ratifies it Pelosi will have to drop her pretense.  Don’t worry, it’ll happen.

“Complicated business folks,… complicated business.”

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This entry was posted in Auto Sector, Big Government, Big Stupid Government, Canada, China, Donald Trump, Economy, Election 2020, energy, Environmentalism, media bias, Mexico, NAFTA, President Trump, Trade Deal, Uncategorized, US dept of agriculture, US Treasury, USA, USMCA. Bookmark the permalink.

85 Responses to Mexican Senate Overwhelmingly Ratifies USMCA 114-4…

  1. K Madison1 says:

    What is the tariff for failing to meet the country of origin rules under USMCA?

    Like

  2. BebeTarget says:

    So much for all the Dem, MSM naysayers who blamed POTUS’ tariffs as the reason Mexico will never agree to the deal.

    Liked by 12 people

    • Luz Maria Rodriguez says:

      The Dems, MSM, Lefties in general, do not have common sense. They are utterly blinded by their prejudice and, more so, lack of cognitive ability. These lemmings need to go the way of the Dodo Bird.

      Liked by 4 people

  3. tonyE says:

    What we need to do now, folks, is to EXPORT the Socialists, Commies and Fascists to Red China.

    After all, they should be happy in that political system.

    I’d love to see Maxine Waters trying to impeach Chairman Xi…

    In exchange for Red China taking our commies, we will drop the tariffs to 20%.

    Nancy Pelosi, coming from San Francisco, should be familiar with Chinese food already.

    Liked by 18 people

  4. Tiffthis says:

    Didn’t Trump lift the tariff on Canada already?

    Liked by 2 people

  5. sickconservative says:

    Best thing to happen to Mexico if they can see it at this point.
    Now cut the corruption from the cartel’s and you might have a real country.

    Liked by 6 people

    • I was thinking the same sickconservative.

      This is great news for the hard working Mexican citizens.

      Now all Mexico has to do is to get rid of the drug cartel war lords who run the country.

      Like

    • john says:

      The only way Mexico breaks the stranglehold the Cartels have over thier country is to allow the US Army to operate in Mexico. Mexicos Army and politics are polluted with people on the cartels payroll. Similar to our Congress.

      Like

      • Lester Smith says:

        Who in are congress on the cartels pay list?

        Like

        • Rob says:

          “Similar” does not mean members of Congress are being paid off by cartels. It means they are being paid off and corrupt, similar to Mexican officials being paid off and corrupt. It does not mean they are being paid off by the same people or groups.

          Like

          • Lester Smith says:

            I hope your right but remember corruption has no soul. And for the love of money and power many will sell their soul. Sad but true. But have faith there are still good people with a soil, My wife for got her purse at the doctors. A young man ran to her and said you forgot this, he then stated please be careful your lucky no one stole it.

            Liked by 1 person

  6. JohnCarlson says:

    Who were the 4?

    Don’t tell me. I think I may be able to figure it out by myself.

    Pelosi, Schumer, Nadler and Schiff all went down there, slipped in, and voted against it to vote against something Trump.

    Liked by 1 person

  7. sundance says:

    Liked by 11 people

    • curator55 says:

      This is an excellent post. Decades ago, I was under 20, unemployed and unskilled. But fortunately, it didn’t last long as the economy picked up and I was hired as an apprentice tradesman. The company that hired me and an International Union were linked via a Mutual Collective Agreement. The company and the union worked together to oversee a Joint Training Apprenticeship Program that changed my life for the better.

      After I became a certified journeyman, I began broadening my education with university courses (English Lit and Composition, History, Child Psychology etc) for personal reasons and then I explored more specific specialties in the burgeoning tech/computer field. I had long ago learned that acquiring valuable skills and knowledge that employers will need into the future ensured that I would likely never be unemployed again.

      I am certain, Ivanka’s and the various company’s efforts are changing the lives of many and I’m glad her efforts are highlighted here.

      Liked by 23 people

  8. Duke of Cumberland says:

    Adios, amigos. Time to head back to Mexico for a better life.

    Liked by 4 people

  9. Grandma Covfefe says:

    Are we Tired of Winning Yet?
    NOOOOOOOOOOO..never tired of winning..
    Thank You Mexico, for learning to be a better neighbor. We are Watching you very closely, tho.

    Liked by 7 people

  10. Maquis says:

    ORANGE MAN GREAT!!!

    Liked by 14 people

  11. Daniel Camac says:

    I used to climb trees as a kid. I’m sure most on this blog can relate.
    When you were dangling 60+ft. you felt a little euphoria. That’s how I feel now thanks to two people. President Donald J. Trump and Mr. and/or Mrs. Sundance or both. “Thank you all and to all, God Bless and good night!-Red Skelton (a memory in his own time).

    Liked by 21 people

    • Felipe says:

      Daniel: 60+ feet? That’s a serious climbing tree! No wonder you like the Treehouse?

      Liked by 2 people

    • billrla says:

      Daniel Carmac: I spent a considerable portion of my childhood up a tree. On purpose, of course. Today, I suspect that today’s state nannies would throw a parent in jail for allowing his or her kid to climb a tree–based on an anonymous tip for a neighborhood snitch.

      Liked by 1 person

      • Ausonius says:

        The police would be called, the fire department, and Children’s Services would investigate the parents for negligence.

        I spent most of my childhood outside because my tobacco-addicted parents would not believe that I could not breathe properly in an 800 sq. ft. house full of smoke. At an early age I was traveling on my bicycle or on a bus everywhere to escape. Otherwise I had my door closed in my room and the windows open and was reading Uncle Scrooge McDuck comic books learning about capitalism and adventure!

        Like

        • Cliff Indiana says:

          I used to love those! A few years ago while on sick leave, I found a web site with every single issue archived for Free reading. Read every single one! Loved finally knowing the origins of everything to do with the series. Very Creative and endearing. Alas, the Disney Legals found it at some point and shut it down.
          Hopefully it was saved and will pop up again somewhere else. May need to go looking again!:)

          Liked by 1 person

          • Ausonius says:

            Yes, that was an incredible website run by a Frenchman named “Beru”! You are right: even though “Beru” had simply scanned his own private collection, and charged nothing, the Disney people shut it down.

            All of the Donald Duck/Uncle Scrooge McDuck stories (and more) by Carl Barks and Don Rosa have been reprinted by two different companies, available of course on Amazon.

            However, a few stories -including the great A Christmas for Shacktown by Carl Barks are available on YouTube…so far!

            See:

            Like

    • Lester Smith says:

      My wife and I were talking about red the other day. Clean, funny and good natured. Maybe showing my age but I miss those more innocent times.
      MAGA

      Liked by 1 person

  12. I look forward to the day that the illegal Mexicans here in this country move back to Mexico to work at one of these $16/hr plants. Then all of the other businesses are going to have to raise wages to compete with those jobs. Then more illegals will return to Mexico. The cycle continues until the number of Mexican illegals is drastically cut. Of course, illegals from other countries are just going to have to be deported back to Central America, Africa, China, and the Philippines.

    Liked by 2 people

    • Robert Smith says:

      Democrats will try to increase welfare benefits to compete with a real job.

      Liked by 8 people

      • Lester Smith says:

        We are the land of milk and honey Dems also hand out free money. The Dems suck we work they give our taxes away so they stay in power an other day.

        Liked by 1 person

        • Robert Smith says:

          Pretty much.

          If we didn’t they’d say, “…because that’s not who we are..”

          Yeah, let illegals in and then give them enough to improve their standard of living by multiples. None of the previous immigration waves were like that.

          Liked by 1 person

  13. You know, if you can’t run your business well enough to pay decent wages to your workers … that is to say, if your profits depend on paying people [in Mexico] so little that they can’t even make ends meet [in Mexico], YOU ARE A FAILURE as a businessman. International policies should not support your failure. With just a little more determination to become “a rising tide that lifts ALL boats,” you could in fact become one. International policies should require you to do so. Because, who really wants their COUNTRY(!) to be left at the short end of the stick? Enough is enough.

    Liked by 4 people

    • Dutchman says:

      Mike,
      Its not JUST the wages. I’m pretty sure there is no workmans comp. So if an employee cuts off a finger, you pay him $50.
      Don’t pay TOO much, or ALL the rest of the,workers will amputate a finger.

      No OSHA, so no worries about safe working environment.

      No a/c, no unemployment premiums, and as for sexual harrasment suits,…
      FORGETABOUTIT!

      Environmental regulations, Unionising employees, doubtful.

      Lots of ‘incentives’ for the unscrupulous.

      Liked by 7 people

      • Maquis says:

        A great deal of those unscrupulous are rich Americans, like Tom Donahue of the Anti-American Chamber of Commerce, who screw Mexicans over on both sides of the border.

        To riff on Mike’s observation above, if you are a rich American ***hole choosing to pay slave wages to Mexicans hither and yon, you are a failure as a human being.

        Liked by 5 people

        • Dutchman says:

          Oh, agree Maquis.
          Didn’t mean to sound like I was advocating or defending these scumbags like Donahue.
          Just saying its not ONLY wages.
          Its the whole package of cost vs. benefit, especially if, as your saying MORALITY doesn’t enter into it.
          Barstuds!

          Liked by 1 person

          • Maquis says:

            Dutch I wasn’t critiquing anything, just piling on the scorn for the unscrupulous that profit from creating misery. They then blame us for it while we pay the price for it and they call us racists to boot. The Democrat Party is as evil as the Communist Party and always has been.
            Spit!

            Liked by 1 person

      • bertdilbert says:

        You could try Googling workers comp, OSHA and unions in Mexico before posting. BTW every employee in Mexico is entitled to 15 days pay as a Christmas bonus.

        Since vacation pay is not mandatory in the US. Mexico labor law exceeds that of the USA.

        Liked by 1 person

        • Dutchman says:

          bertdilbert
          I stand corrected, since I ONLY have a phone, no computer, only one screen open at,a time, I don’t use google much, ever and especially when posting.
          Since you are knowledgeable, to my broader point; ARE there advantages for employers, OTHER THAN PAY, for locating their production facilities South of the border?

          Taxes, building codes, licencing, energy costs? I recall hearing of buildings with just corrugated tin walls, ‘swamp’ coolers instead of A/C.?

          Like

          • bertdilbert says:

            If you make something expensive you, get less of it. Raise taxes and regulations in the USA, it forces jobs offshore. If a businessman can move production offshore and get lower production cost, then he can undercut his competitors in the US and increase market share. If the businessman does not do it, he stands the risk of his competitor doing it to him.

            You can apply the above statement to auto manufacturing and what I just said makes a lot of sense. If one company gains an advantage by moving to Mexico and their is a huge cost disparity, then the competing car companies have to follow. This is just a matter of survival in the business world.

            Then there are issues like price points consumers will pay that makes your product advantageous to the consumer. Exceed the price point and sales drop off dramatically.

            Both of our neighbors, Canada and Mexico, were operating at lower corporate tax rates than the USA. With the Trump tax cuts, the corporate tax rate is now below both.

            Supposing your family had a clothing manufacturing business in the USA and you did not adapt to offshore manufacturing. Would that business be alive today? Probably not.

            Liked by 1 person

      • Marc says:

        Sounds like Mexico’s labor laws are a Koch Bros. wet dream. Many big L Libertarians want a similar system here where the corporation can do no wrong as long as they pay you something.

        Like

      • Toenail says:

        Sounds a little like modern day slavery to me. The democrats and RINOs love modern day slavery. IMO the cheap labor in China also seems to be modern day slavery.

        Like

    • bertdilbert says:

      Ah, a socialist who has never run a business.

      Like

  14. 335blues says:

    The citizens of America, Mexico and possibly Canada greatly benefit
    when the marxist democrat party and the chamber of commerce are
    kept out of the agreement process.

    Liked by 10 people

  15. Dutchman says:

    I may have to ‘stand corrected’, or in a corner. I recently posted that I didn’t think PDJT really wanted, or ever intended for USMCA to pass.

    That his real purpose was to USE USMCA to kill NAFTA, which by the way DJT has recently started the multi step process to do.

    So, not YET, but I may have to eat crow, …AGAIN. But hey, put enough ranch dressing on it, you can eat cardboard!

    We’ll see if Congress is so TDS, that they refuse to give PDJT a ‘win’, by ratifying.
    Hard to imagine, since Donahue is getting a tingle up his leg at USMCA passing.

    We’ll see,…its complicated business, folks!

    Liked by 2 people

    • TreeClimber says:

      We’re all allowed to be wrong sometimes. ^_^ And hey, I defended Sessions – some of those feathers are still stuck.

      Liked by 6 people

      • Dutchman says:

        Thats what I ate crow about, here in the House, last time. I got caught up in the hope porn, and kept emphasising that the,way its done, properly is we DON’T KNOW if an investigation is occurring, until indictments.
        Hillary and Comey screwed that all up.
        Anyway, prepared to eat crow on this, W.T.H., we’re all just expressing opinions, here.

        Liked by 1 person

        • Dutchman (AKA Gunny for idiots like me who don’t pay attention to who posts what) I think you were right the first time about USMCA. I believe Congress can attempt to amend it, pass those bastardizations in both houses, and then guarantee a veto.
          TDS is a brain-paralyzing disease only cured by losing your mind first, appointments second, and respect of the sheeple last. That last one will be very hard to swallow.
          However SD is on the other side of my argument… so I’m looking at 20-1 odds right now, at best.

          Like

          • Dutchman says:

            I am not “AKA gunny”, and yeah, Pelosi and McConnell are so crazy to not give PDJT any win, they might just do that.
            The,argument PDJT himself is making, is that EVERYBODY wants it passed; CoC is begging for it, Unions, farmers, manufacturers, Canada, Mexico so Uniparty is going to be under ENORMOUS pressure to pass it.

            Whereas PDJT, while he is ‘lobbying’ for it, HAS quietly started the multi-step process to formerly KILL NAFTA. And I think I recall him saying he could work with pre-nafta just fine.
            So, as usually his opponents need the deal more than he does. He ‘wins’ either way.

            Liked by 1 person

      • Lester Smith says:

        Don’t tell my brother that he’s never wrong.

        Like

    • Amy2 says:

      If it helps Mexico (since they love Mexicans so much) they should be all for it. / sarc

      Like

    • Reloader says:

      I have no idea how President Trump’s “Killers” –Ross, Lighthizer, etc– make deals, but I read somewhere quite a while back that when Donald Trump is making a deal with someone, it generally goes like this:

      Trump: “This is what I want. And This is what You want. So, This is what I’m going to do for You, and This is what You’re going to do for me.”

      And the other guy almost always says YES, because what Genius Trump offers is too good to refuse.

      Liked by 1 person

      • Dutchman says:

        An offer you can’t refuse. Hmmm
        I really don’t see how he could make such an offer to Xi.

        They already had an irrisitable situation, and he is taking that away. What is he offering, in exchange for taking away currency manipulation, IP theft, etc.?

        Liked by 1 person

        • nimrodman says:

          I’d surmise that Xi didn’t take the mutually beneficial deal that was offered and is now in penalty phase

          But I’m only guessing, I have no expertise or special insight

          Like

        • Lester Smith says:

          Seeing his wallet get thiner and thiner. Big business moving to greener PASTURES elsewere. It’s the Chinese water touch drip by drop dollar by dollar it will drive him slowly crazy. Trump is a very cool card player. Eating cake and informing Chinese president we just dropped a bunch of bombs isn’t this great cake. Chinese president must of said to he self, ok I have no idea what I’m dealing with. Trump to birds one stone.

          Like

  16. I found something interesting
    @Sundance Have you seen this for Digestion?

    Look..
    https://usmca.com
    USMCA
    The United States-Mexico-Canada Agreement, or USMCA, will replace the current NAFTA agreement that governs trade in North America. The trade agreement has been negotiated by the governments of The United States, Mexico and Canada, but still must be ratified be certain groups within these governments.
    The trade agreement will have a big impact on many parts of the economy. There will be winners and losers.
    USMCA.com was created to make it easy to search the agreement and comment on different aspects of it. To get started, select a section below.

    Like

  17. OhNoYouDont says:

    White House visit by JustinTrudeau

    Liked by 2 people

  18. Troublemaker10 says:

    Maybe this will light a fire under Pelosi’s butt. Why haven’t we signed it yet?

    Like

  19. Gary Lacey says:

    I suspect here has been a lot of weeping and gnashing of teeth at the CofC since DJT has cut off the influence of Tom Donahue.

    Liked by 2 people

  20. Amy2 says:

    I want to see Mexico vote on the double secret immigration thingy.

    Liked by 1 person

  21. Hopefully it is not too difficult to monitor compliance with the content percentages.

    Like

  22. Pyrthroes says:

    With Pres. Trump, deal-making is always a mutual-benefit win-win: Despite Canada’s whacked-out eco-freaks, USMCA incentivizes all three countries’ skilled domestic industries, transforming employment-compensation prospects, in unified context of Fair Trade vs. NAFTA’s exploitative “back door” exfiltration.

    About the time Trudeau’s dreary sycophants ratify USMCA in mid-July, Trump will be confronting Chairman Hsi anent his nuke-brandishing Nork proxy, countering Peking’s Grand Theft menage with mega-tonnage tariff threats. In light of this ultra-positive Global Trade reset, deadhead Rats’ Biden-Pelosi war on American prosperity boggles the mind.

    Liked by 1 person

  23. StuckInBlue says:

    Every day the US House and Senate Democrats refuse to take up the USMCA is another day they are obstructing the raising of the minimum wage for Mexicans – in Mexico! The conversations must be hilarious!

    Like

  24. Rob says:

    If minimum wages rise in Mexico, the incentive for businesses to move to or stay in Mexico is greatly diminished. That is probably why some Mexicans think $11 an hour is too much, they know it will price them out of the market and businesses will leave. Especially combined with the costs of paying cartel bribes to stay in business.

    Like

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