Trump and the New Nafta

Trump and the new NAFTA

https://www.nytimes.com/2018/10/01/us/politics/nafta-deal-trump-canada-mexico.html?

Revised Nafta sets up a showdown with China. NYT: “A jubilant Mr. Trump celebrated the new Nafta agreement as the fulfillment of a bedrock campaign promise. He claimed it was a vindication of his aggressive use of tariffs and vowed to keep imposing them to extract deals from other trading partners, like the European Union and Japan. The updated Nafta, which will be called the United States-Mexico-Canada Agreement, or U.S.M.C.A., represents Mr. Trump’s biggest trade achievement to date, and it comes after more than a year of intense negotiations that frequently fell into personal rancor between Mr. Trump and the leaders of Canada and Mexico. Like some of Mr. Trump’s other accomplishments in business and government, the deal is partly a step forward and partly an exercise in rebranding. Canada will ease longstanding protections on its dairy market and provide access greater than what the United States would have gained through the Trans-Pacific Partnership, a trade treaty negotiated by President Barack Obama, from which Mr. Trump withdrew last year. The United States relented on its demand to eliminate an independent tariff dispute settlement system that Canada had said was a red line. Preserving it was a major concession for the United States, which had eliminated the mechanism, known as Chapter 19, as part of its deal with Mexico. The pact also makes a series of changes to areas like intellectual property and the digital economy, including protections for patents and domain names — all of which refresh Nafta, a 25-year-old pact that had become somewhat outmoded in the digital age. But many of these innovations were drawn from the Trans-Pacific Partnership, which included Canada and Mexico, and it prompted a senior Trump adviser to offer a rare endorsement of an Obama legacy achievement that Mr. Trump delighting in dismantling.”

New Trade Agreement is Not Better

The Trump administration just published proposed text for its renegotiated version of the North American Free Trade Agreement (NAFTA), and they've failed to make the critical changes needed to protect jobs, raise wages, defend human rights and reverse environmental damage.  

As much as the White House wants to spin the current deal as a win, a lot more work is needed before there’s a real NAFTA replacement that working families can be happy about. 

TAKE ACTION: Please urge your Members of Congress to insist on a comprehensive NAFTA replacement that puts working people and the planet ahead of corporate profits. 

Each week, NAFTA continues to destroy livelihoods across the continent.  Unfortunately, the deal currently on offer does not include the enforcement mechanisms needed for labor and environmental standards to prevent employers from moving jobs to areas where worker rights and environmental protection are routinely ignored.  

Without strong labor and environmental rules with swift and certain enforcement, Trump’s version of NAFTA will continue to facilitate the outsourcing of jobs, the suppression of wages and the dumping of toxins.  While steps forward have been made in other areas, a NAFTA replacement without this fundamental fix is a nonstarter.

In addition, Trump’s proposal is significantly worse than the original NAFTA on access to medicines.  The world needs trade policies that increase the affordability of life-saving medications — not ones that extend monopolies for pharmaceutical giants and raise healthcare costs.  

Keynes Comes to Canada

Paul Krugman

Canada has a reputation for dullness. Back in the 1980s The New Republic famously declared “Worthwhile Canadian Initiative” the world’s most boring headline. Yet when it comes to economic policy the reputation is undeserved: Canada has surprisingly often been the place where the future happens first.

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  And it’s happening again. On Monday, Canadian voters swept the ruling Conservatives out of power, delivering a stunning victory to the center-left Liberals. And while there are many interesting things about the Liberal platform, what strikes me most is its clear rejection of the deficit-obsessed austerity orthodoxy that has dominated political discourse across the Western world. The Liberals ran on a frankly, openly Keynesian vision, and won big.

Before I get into the implications, let’s talk about Canada’s long history of quiet economic unorthodoxy, especially on currency policy.

In the 1950s, everyone considered it essential to peg their currency to the U.S. dollar, at whatever cost — everyone except Canada, which let its own dollar fluctuate, and discovered that a floating exchange rate actually worked pretty well. Later, when European nations were scrambling to join the euro — amid predictions that any country refusing to adopt the common currency would pay a severe price — Canada showed that it’s feasible to keep your own money despite close economic ties to a giant neighbor.