Bullet Dodged

Apparently, there are still some adults left in Ottawa and they realized that Trump and his trade negotiators really were not bluffing. Soooo. NAFTA 2.0.

Frankly, I think we won by not actually losing. JT realized that the automotive trade was worth more than gender equality in trade terms. We keep trading with the US, they ship more dairy tariff-free, we get to buy up to $100 bucks an order online from Amazon without duty, keep a dispute mechanism, cultural industries (which apparently include banking, who knew?) exempted…But the big bonus is that we never again have to see Chrystia Freeland in a far too tight dress again. Thank you, President Trump.

Now, this sort of blows Justine’s prospects of running against the Tyrant Trump in a year. I mean, the Liberals will be there in spirit, but it will be impossible to spin this agreement as both a win for Canada and standing up to the big, orange, American bully.

Sensible people do what they need to do to get a deal they need. Encouragingly, there are still a few sensible people in Ottawa.

Update: Only a flesh wound,

“However, the USMCA includes language that requires signatories to give notice if they plan to negotiate a free trade deal with a “non-market country,” and to allow the other two signatories at least a month to review any agreement before it is signed. It explicitly states that if one of the signatories enters into such an agreement, the other two have the right to withdraw from the USMCA with six months’ notice.” national post

My charming elder son texted to suggest that I was full of it and that this deal was essentially NAFTA 2. No major changes.

Well, this language is a major change and a direct restriction on our sovereignty. I don’t think it is a particularly bad restriction but it does mean that the USMCA is more a trade bloc than a free trading area.

Sundance, over at The Conservative Treehouse sees this as a way of stopping the quaint Mexican and Canadian practice of allowing foreign companies to ship parts to those countries and then put the parts together and claim that the finished product is “Made in Canada/Mexico”.

I don’t think that is correct as it only deals with “free trade agreements” rather than the piecemeal import and re-export shenanigans which have characterized NAFTA. However, at a guess, that brokerage business will be curtailed by the rules going to place of origin which stud the various side letters.

Which, in my view, is no bad thing. It is one thing to buy your printed circuit boards from China, it is quite another to have entire control modules shipped in pieces and “assembled” by putting in a couple of screws in order to evade tariffs.

The Trumpians want to bring actual manufacturing home to the USA, or, at worst, to its trading partners Canada and Mexico. We can argue the economics of this but what Trump sees is jobs. Decent jobs to bring Americans – particularily black and Latino Americans – back into the workforce. So far he seems to be hitting that goal. So much so that there are now more jobs than (technically) unemployed people.

Creating an “employment” economy is very good news for the deplorables, black people and Latinos. Where the demand for labour increases so will its price. For a very long time America seemed to be mired in an economy in which the rich and the upper middle class took the lion’s share of the money and the struggling middle class and the poor and lumpen unemployed were left with crumbs, disability and oxy. Trump’s economics and his concept of “fair trade” seem to be shifting that trend. If he can keep it going he’ll win the mid-terms and he’ll win re-election.

No News is No News

Just watched the 20 minute Chrystia Freeland “news” conference.

Apparently she’s promised “not to negotiate in public” which means she is unwilling to address any substantive questions at all.

This week’s talks have ended but they will be back at it Wednesday of next week.

Just one problem, which Freeland, of course, dodged, Trump has basically said that he is not moving on any of the key points and that he’d be just as happy to drop a 25% tariff on Canadian made cars. Kinda tough to negotiate around that.

Which means that, after a week of “intense” negotiations Freeland is going back to Canada with nothing except the fact that The Donald is planning on taking his bilateral agreement with Mexico and notifying Congress that it will be signed 90 days from now.

Here’s Hoping

Holy Cow!!! It is now strongly getting said that Canada is going to take the knee and give up protectionist tariffs on their dairy, telecom, aeronautics, and banking industries in order to save their auto-industry. Total and complete acquiescence to U.S./Mexico Demands. pic.twitter.com/xoegWXIB2H

— TheLastRefuge (@TheLastRefuge2) August 29, 2018

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Sundance is a remarkably well informed American commentator who pays attention to trade. The above is not confirmed but if that turns out to be the Canadian position the politics will be fascinating.

A complete capitulation to Trump would make Trudeau look like the wimp most of us already think he is. It would also give us a chance to catch the tailwind of the current American economic boom.

It would, I suspect, cause the left in Canada to implode simply because it would suggest that their hero Justin takes business more seriously than posturing. And when you give up posturing what does the left have left?

As Trump would say, “We’ll see what happens,” but real Canadian patriots have to hope that common sense prevailed and that we are on the road to genuine free trade with our friends to the south.

[Note seeing much action on the CDN/USD front. If the above is true I would expect a fairly sharp rise in the value of the Canadian dollar.]

So, Justin, nice little country you got there….

“Canada will start negotiations shortly. I’ll be calling the Prime Minister very soon. And we’ll start negotiation, and if they’d like to negotiate fairly, we’ll do that. You know, they have tariffs of almost 300 percent on some of our dairy products, and we can’t have that. We’re not going to stand for that.

I think with Canada, frankly, the easiest thing we can do is to tariff their cars coming in. It’s a tremendous amount of money and it’s a very simple negotiation. It could end in one day and we take in a lot of money the following day.” President Trump in phone call with President of Mexico announcing bilateral trade deal

The orange bully, poopy head is being mean to our mighty Prime Minister and his trade negotiators. Basically the US, having been insulted by our PM and getting thoroughly fed up with the gender equality/climate change/social justice pretensions of the Great White North, cut a deal with the Mexicans. Sunset clause and all.

Now, Trump may call Justin – assuming Justin is in the office – and he may be willing to do a bilateral trade deal, but there is no particular reason the US needs a deal. And they certainly don’t need one with big dairy tariffs and gender equality.

See the big stick? Yup, auto tariffs. Which is to say the end of Ontario’s economy.

Now, our brilliant Prime Minister and his advisers are pretty convinced that the path to their next majority lies in running against Trump. Because Canadians hate Trump and they line up to demonstrate their patriotism by supporting Justin when he stands up to the orange ogre.

Here’s the thing: Trump and his people don’t care.

Justin’s tough guy stance has reduced Canada to the status of ankle biter among nations. We used to box above our weight internationally – or at least we told ourselves we did. Trump is a realist. He doesn’t need Canada. And he certainly doesn’t need a dim, virtue signalling Canadian Prime Minister to tell him about climate change and indigenous people.

So, realistically, it may be a while before the Prime Ministerial phone rings.