All our propaganda are belong to us…

In comments yesterday about the likelihood of Canada joining the U.S-Mexico trade agreement, Justin from Canada stated emphatically that his country would not join any trade agreement that removes Canadian protectionist policy on “cultural industries”.

What are Justin’s “cultural industries“? Well, that would be control over media and telecommunications. In essence, Canada wouldn’t want any of that pesky free-market media stuff interfering with the state-run propaganda broadcasts.  Yup, you can’t make this stuff up folks…

CANADA – […] The prime minister also said his government won’t sign an updated free trade accord with the U.S. and Mexico if the deal doesn’t continue exemptions for Canada’s cultural industries, which aims to protect Canada’s publishing and broadcast industries.

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On Friday we shared the press release from U.S. Trade Representative Robert Lightizer about his trade notification to congress. [HERE]  Here is the text of the letter from President Trump via The White House:

Dear Mr. Speaker:   (Dear Mr. President:)
On May 18, 2017, my Administration notified the Congress that I intended to initiate trade negotiations with Canada and Mexico.  Negotiations began on August 16, 2017.  Since that time, my Administration has worked hard with Mexico and Canada to reach a modern trade agreement that sets high standards for free, fair, and reciprocal trade.
I am pleased to report that in only 1 year, we have made dramatic progress toward such an agreement:
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U.S. Trade Represenative Robert Lighthizer releases a statement announcing the administration is filing a NAFTA Section 2202 trade modification “notification of intent” letter to congress:

Washington, DC – U.S. Trade Representative Robert Lighthizer today issued the following statement regarding the status of trade negotiations with Mexico and Canada:
“Today the President notified the Congress of his intent to sign a trade agreement with Mexico – and Canada, if it is willing – 90 days from now.  The agreement is the most advanced and high-standard trade agreement in the world.  Over the next few weeks, Congress and cleared advisors from civil society and the private sector will be able to examine the agreement.  They will find it has huge benefits for our workers, farmers, ranchers, and businesses.
“We have also been negotiating with Canada throughout this year-long process.  This week those meetings continued at all levels.  The talks were constructive, and we made progress.  Our officials are continuing to work toward agreement.  The USTR team will meet with Minister Freeland and her colleagues Wednesday of next week.”  (link)

Under the original 1993 terms and Chapter 22 of the Implementation Act, Lighthizer notifies congress that trade parties have modified the terms; this is the Section 2202 notification of modification. Ninety days after the date of the notification the U.S. and Mexico can sign the new terms of agreement; congressional approval is not required. [Canada can still join the U.S-Mexico agreement but they need to act fast.]
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Continual emphasis on the severity of Canadian politics is needed to understand the latest developments in the U.S-Canada trade negotiations.
The Trump administration set a deadline of today for Canada to join the U.S-Mexico trade agreement and make the NAFTA replacement agreement a three-way pact.  The concessions needed by Justin Trudeau and Chrystia Freeland to join the agreement were politically devastating.

In order for Canada to accept or join, via a NAFTA 2202 modification, they would need to agree to the U.S-Mexico modification terms. For Canada they would have to:

• open their telecommunications and banking sector (eliminate non tariff barriers).
• eliminate soft-wood (lumber) and aeronautics subsidies.
• begin a process of lowering their assembly use of Chinese/Asian goods.
• accept the rules of origin for North American manufacturing.
• eliminate protectionist tariffs on dairy and farm products.
• accept the U.S-Mexico terms for arbitration and dispute resolution.

President Trump and U.S. Lighthizer are holding all the cards.  As we previously highlighted they don’t care if Canada doesn’t join; the U.S. would likely prefer to send congress a NAFTA 2205 withdrawal notification removing the U.S. from the original 1993 NAFTA construct in combination with a simultaneous 2202 modification notification for the U.S-Mexico side of the agreement.
This would allow the U.S. to go into a one-on-one trade negotiation where six months and a day from the 2205 notice. The U.S. would then apply 25% auto tariffs on Canadian made vehicles while negotiating a bilateral deal. Canada is in a very weak negotiating position; politics are paramount for the Canadian team; their exit needs political cover.  Media need to help the optics for the Canadian team.
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Well, there’s yet another promise kept.  Candidate/President Trump always said he would deploy the “killers” to renegotiate trade deals:

…‘When it comes to negotiating, “Robert Lighthizer is a vicious son of a bitch.”…

~Gordon Ritchie

Somehow I think this type of criticism will only elevate U.S. Trade Representative Robert Lighthizer in the eyes of President Trump.
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The financial media is all a flutter based on a Bloomberg report that President Trump is likely to apply tariffs on $200 billion in Chinese goods.  DUH !  Why do they think U.S.T.R. Lighthizer has been conducting open section 301 tariff hearings for the past week?  Of course President Trump is considering tariffs on $200 billion in trade goods; this approach is not exactly a secret.
Then again, most of the financial media are clueless about the larger economic strategy and how China ties into the negotiations with North Korea.  I digress.

The proposed tariffs are a supplemental action in response to China’s unfair trade practices related to technology transfer, intellectual property, and innovation, based on the findings in USTR’s investigation of China under Section 301 of the Trade Act of 1974. Tariffs on $34 billion in goods from China are currently in effect, and tariffs on an additional $16 billion took effect on August 23rd, 2018.
The issue is not *if* President Trump will apply the 301-tariffs, the question is *how* and *when*?
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For Canada it’s all about politics and face-saving. How to tell? Well, after Canadian Foreign Minister Chrystia Freeland went out of her way last night to tell the media she would not conduct negotiations in the press, Freeland runs back to the press to discuss the ongoing negotiations. She is signaling to a domestic audience…. nothing more.
Domestically Justin and Chrystia from Canada have seen complete collapse in support from the Canadian electorate. Canadians have little confidence that Chrystia and Justin are capable of negotiating a deal that will benefit their economy. Trudeau and Freeland rolled the political dice; played political games; and crapped out.
Mexico (Seade) and the U.S. (Lighthizer) have structured a strong trade agreement that benefits both countries and creates an actual manufacturing and commerce bloc. Canada has no option except acquiescence, if they want to avoid Lighthizer sending a 2205 notification to dissolve the Canadians from the U.S-Mexico deal.

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In January 2018, when still attempting the political use of the negotiations, Freeland burned Lighthizer. The U.S. Trade Rep has not forgotten. Canada’s ability to enter the deal is now dependent on Lighthizer allowing them a way to save face.  Robert Lighthizer, like Trump, really doesn’t care…. The U.S. is in an overwhelming winning position either say…. Hence, Freeland’s continual appearances in the media, she’s shook.
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Ezra Levant of The Rebel Media discusses the background of Justin from Canada politicizing trade negotiations with President Trump eventually leading to a complete collapse of trade diplomacy.

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The *tell* is within: “we have agreed not to conduct our negotiations publicly.”
Remember, U.S.T.R. Lighthizer, Jared Kushner, Secretary Ross and the U.S. team have never made a public comment about internal negotiations, ever.  The only trade team that has discussed the dialogue, and specifically their individual terms within the dialogue, is Justin from Canada’s team, specifically Chrystia Freeland.  This has been a weakness of team sparkle socks all along because it highlights their political prism.
So when princess rainbow sparkles and Justin back away from talking about their unicorn demands they are signaling a shift from a political prism toward a more economic-based set of determinations.  Essentially, their political approach has failed; they are weakened.

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“what both sides need” interpreted: Justin and Chrystia are trying to gauge the best retreat from the position of political damage. I’m going to hold-off on expanding consequences to Canada joining until I see if they *actually* do join. However, the biggest part of the U.S./Mexico agreement would eliminate Canada’s ability to use the NAFTA loophole.
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Earlier this afternoon President Trump announced an initiative to provide federal grants to assist communities with drug abuse and prevention.  Marking the 20 year anniversary of the Office of National Drug Control Policy’s (ONDCP) Drug-Free Communities (DFC) Support Program grant awards, today President Trump announced $90.9 million in grants to 731 local drug prevention coalitions.
Continuing the tradition of transparency in government; during the media availability for the round-table President Trump answered numerous questions. The round-table discussion begins the video below.  The impromptu presser begins around 14:40 of the video:

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*Asked about Don McGahn* – President Trump called him a really good guy, added that he has a lot of affection for Don; said McGahn is likely headed to the private sector. Asked if he was concerned about McGahn’s cooperation with Mueller. POTUS replied: No, adding that he had approved of McGahn speaking to the special counsel.
*Asked about trade negotiations with Canada* – President Trump said negotiations were going really well. Noted that White House and Canadian officials “negotiated late into the evening” last night. A lot of trade deals are working out well.
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