NAFTA is as precarious as a slow-spinning plate on a stick. Mexico and Canada are both taking half-hearted turns recharging the momentum – while simultaneously looking for trade options due to, well,.. the inevitable.
The basic issue is a simple one; for the U.S. NAFTA has a fatal flaw. Canada and Mexico are used by China and Asian nations as a way to work-around direct trade with the U.S. and use NAFTA as a backdoor into the U.S. market. It works out great for Canada and Mexico, but terrible for the U.S. It’s a structural issue and no amount of negotiation is going to remove the fatal flaw unless Canada and Mexico agree to terms that are directly against their current financial interests.
Ergo POTUS Trump is positioned to withdraw.
Trying to keep the U.S. in NAFTA, but understanding the likelihood of exit, Justin from Canada originally approached China for a big trade deal. Justin didn’t find Happy Panda in his discussions; instead he found The Red Dragon behind the Panda mask. China was willing to talk trade, but China tiered their approach because Canada is only valuable to China as long as the NAFTA door is open. Without NAFTA China has no use for Canada.
Justin left China with dragon burns and immediately realized his trade cards were getting weaker by the day…. so he had to sign-up for the Trans-Pacific-Partnership. Unfortunately for Justin, though some think he didn’t realize the consequence, signing TPP guaranteed POTUS Trump would exit NAFTA.
Why? Because if the U.S. stayed in NAFTA the TPP nations would now have a collective backdoor into the valuable U.S. market through Canada. The NAFTA fundamental flaw just became more flawed.
