Looking back at NAFTA, hoping to taste fruits of Trump's embryonic USMCA before 2020
 As summer approached this year, victorious House Democrats in the United States found themselves looking for reasons to support President Donald Trump's United States - Mexico - Canada Agreement (USMCA), the one cannot replace NAFTA, the North American Free Trade Agreement until the new version has been ratified.
Democrat standing policy of knee-jerk opposition to anything President Donald Trump does or says would no longer do because in the case of the USMCA, its failure to be ratified by the House of Representatives could no longer be blamed on the Republicans who no longer control the House. It would be clearly be the fault of Democrats who are more in control of events than they had been in years.
And the new deal has many Democrat-friendly features. Compared to NAFTA, the USMCA increased environmental and labour regulations and incentivises more domestic production of cars and trucks. The agreement also provides updated intellectual property protections, and gives the US access to Canada's dairy market while imposing a quota for Canadian and Mexican automotive production, and increasing the duty free limit for Canadians who buy US goods online from US$20 to $150.
Acting on campaign promises, President Trump also made changes that affected trade relations. Withdrawing from the Paris global warming agreement, ceasing to be part of negotiations for the Trans-Pacific Partnership, and increasing tariffs with China were some of the steps he implemented.
Little more than a year ago Canada had not agreed to the deal. Then because Mexico’s outgoing president, Enrique Pena Nieto, left office in December, 2018, and 60 days are required as a review period, the deadline for providing the agreed text was the end of September 30, 2018. which was reached precisely on September 30. Negotiators worked around the clock and completed the agreement less than an hour before midnight.
What the House Democrats want tweaked or re-written is USMCA Annex 23. This requires Mexico to pass legislation what improves the collective bargaining capabilities of unions. The specific standards Mexico is instructed to comply with are detailed in the International Labour Organisation's Convention 98 on freedom of association and collective bargaining. The administration of Mexico's President Andres Manuel Lopez Obrador, introduced legislation in late 2018 which pursues compliance with these international standards.
Other labour-related measures include a minimum wage requirement in the automotive industry. Specifically, 40 to 45 per cent of the motor vehicles manufactured in North America must be made in a factory that pays a minimum of $16 per hour. This measure will be phased out five years after USMCA enters into force.
But all parties agreed to USMCA labour provisions text was published as an agreed-on document. Signature by each party was delivered at the Group of Twenty (G20) meeting on November 30, 2018, in Buenos Aires. The draft is still subject to "Legal Review for Accuracy, Clarity, and Consistency" and as of November 2018 only available in English, although the Spanish and French versions would be equally authentic.
While House Democrats will quibble over labour conditions in Mexico for as long as they feel they need to escape the blame zone for supporting a measure favoured by a president they all must loathe, there is no room for substantial change without re-opening full trilateral treaty negotiations again - which nobody wants.
So they campaigned for amendments to support workers rights in Mexico and are joined in this by Captain Canada, leading the forces of goodness and niceness. Canada's Liberal government, no friend of Trump's after the US dismantled their worthy northern neighbour's highly protected dairy market, a process which made rubbish of the then universal claim that Trump was a rampant protectionist. In this case, he gave a credible imitation of a bold Yankee Free Trader as he blew the whistle and Canada's tariff walls came tumbling down.
So instead of opposing the president's USMCA bill as another Trump monstrosity, Democrats who had not yet winged off into Marxist socialism, radical environmentalism or the woes of homosexuals and the transgendered, have clearly determined that trade with Mexico and Canada was at least as important as fighting global warming and the male patriarchy, and will likely find a way ratify the treaty however subliminally before the year is out.
Still, it must be done. The deal is a signed but not ratified. It is referred to differently by each country. In the US, it is called the United States - Mexico - Canada Agreement (USMCA); in Canada, it is called the Canada - United States - Mexico Agreement (CUSMA) and in Mexico, it is called the Tratado entre Mexico, Estados Unidos y Canada (T-MEC).
Unlike NAFTA, this treaty has an interesting feature - its malleability - which may yet have far-reaching consequences. This malleability, enabling it to change from one thing to another without breaking, makes this trade deal different from the restrictively named North American Free Trade Agreement. The malleable USMCA can add and subtract elements without changing its nature. One could see Australia added and Mexico subtracted. One could even imagine the UK, once free of the European Union, becoming a member of this US-centred trading bloc.
The future of North American intra-mural trade most uncertain and subject to a political cold war raging in the country between a freedom-loving masculine will yearning to triumph in a competitive world filled with dangerous rivals. This force is at war with the safety-first feminine world, which seeks to emasculate that aggression by tightening regulation. The first force is represented by the go-ahead Republican Party and Donald Trump and the second is led by the social control forces, which other than their shared hatred for Trump, are much divided for the moment on what champion among the wide variety fielded will be their standard bearer in the battle to come in 2020. |
