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Breaking Down the Rapid NAFTA Rebrand

by Axios | Updated on 10.2.18

Countable asks: Do you support the changes to NAFTA? Any more you'd like to see added? Tell your reps, then share your thoughts below.


It's been about 16 hours since North America agreed on a rebranded NAFTA, and we're starting to get a sense of what's actually in the deal.

Why it matters: Rather than opening another front in a broader trade war, negotiators have secured modest changes that preserve the free trade status quo in North America.


What Trump is saying: “For 25 years as a civilian, as a businessman, I used to say: How could anybody sign a deal like NAFTA?"

  • "Without tariffs, we wouldn’t be talking about a deal... Just for those babies out there that keep talking about tariffs.”

Between the lines: "[USMCA] makes a series of changes to areas like intellectual property and the digital economy, including protections for patents and domain names," the N.Y. Times' Alan Rappeport reports.

  • "[I]t's state of the art, this will be the best in the world. This will be our model going forward," Trump trade negotiator Robert Lighthizer told reporters today.

Where each side wins:

  • U.S. wins: Canada opens up its dairy market and its wine rules. More auto parts must be produced in North American factories, along with more built by labor that makes more than $16/hour. Nothing preventing future aluminum and steel tariffs. Strengthens copyright protections for U.S. creatives. Lowers border crossing duty thresholds.
  • Canada wins: Protected from U.S. auto tariffs. Long sunset clauseof 16 years (U.S. wanted 5). Retained 2 of 3 NAFTA provisions allowing dispute panels with other 2 countries. 
  • Mexico wins: Protected from U.S. auto tariffs. Long sunset clause of 16 years (U.S. wanted 5).

The bottom line: If Congress signs off, NAFTA 2.0 allows Trump to enter the midterms with a major win on trade, without the pain of a trade war next door.

-Mike Allen

Axios

Written by Axios

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(4)
  • David
    Voted Sad
    10/02/2018
    ···

    Wow, so we hold our neighbors hostage with tariffs in order to rework a deal. Hooray.

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  • Daniel
    10/02/2018
    ···

    What I like to see fair play in trade more products made here we need to rebuild our manufacturing as we had it in the 1940’s. God forbid we have a world conflict or any we need to sustain our economy without major help from outside trade.

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  • Fiatagata
    Voted Angry
    10/02/2018
    ···

    The guy in the WH adult daycare and his negotiators did not come up with a completely new trade agreement, they just made a few changes, and renamed NAFTA and called it UMCA. Now we wait for all the legislative leaders of each country to ratify this new NAFTA agreement.

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  • Manuel
    10/04/2018
    ···

    My understanding, per a Bloomberg radio update, is that the partners must now unilaterally approve trade deals. Canada can’t make its own deal with China, for instance. So as the USA re-negotiates with other trading partners, they can’t use our neighbors as a back door into the USA which is still the largest consumer market on the planet.

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