Trump-Pelosi Trade Maneuvers: The New NAFTA 2.0, China Tariffs, and Brazil-Argentina Steel
Revised USMCA Trade Deal
Global Research, December 11, 2019
Today the Trump administration, with
Democrats & AFLCIO leaders in tow, announced new final revisions and
deal with Mexico on the new NAFTA 2.0 free trade agreement called the
USMCA.
According to the corporate media,
revisions to the USMCA demanded by Democrats since the initial agreement
was reached with Mexico a year ago, have been agreed to by Trump,
Pelosi, and the president of Mexico, Lopez-Obrador. The revisions
reportedly mean more protections for US labor in particular. However,
all we have at the moment is what’s reported in the corporate and
mainstream media about the revisions. We’ll have to wait to read the
final print of the actual agreement. But even the media reports are not
much more than vague generalities about the terms and conditions of the
revisions. The much heralded improvements to US labor interests in
particular don’t appear that different from Trump’s originally
negotiated deal a year ago.
The official media story line is that the
new revisions provide protections for American workers now that did not
exist previously during the 20+ years of NAFTA 1.0. During that period,
easily 4-5 million US jobs were diverted to Mexico.
At issue during negotiations on revisions
to NAFTA–now called the USMCA–was whether US inspectors would be allowed
access to Mexico factories and businesses to ensure that the new labor
terms of the revised USMCA trade deal were being enforced. Lopez Obrador
and Mexican business have been adamantly opposed to allowing US
inspectors access to Mexican factories, which suggests they had
something to hide. (Mexico and AMLO both are in agreement on this
issue). THey demanded that, instead of inspectors, there would be a
joint US-Mexican panel to arbitrate labor disputes. But the issue is
independent inspection, not a panel to rule on disputes that may never
rise due to absence of inspection. What good is a panel of any kind
ruling on a dispute that doesn’t get raised because there’s no
independent inspection in the first place? Also important is whether the
inspectors inspect unannounced, or whether they have to give a
pre-notice before they inspect (that phony arrangement is how the US
OSHA law has functioned with little effect for decades). Moreover, if
there’s panel, how is it determined and what is its composition? If it’s
equal US-Mexico representation, it might never come to a final
decision.
In other words, if the final terms and
conditions in print for the USMCA provide only for panels, in lieu of
unannounced inspectors, then the so-called great labor protections
touted by Democrats as part of a final deal are really just another fig
leaf of labor protection.
While the mainstream media and Democrats
talk up the labor revisions in today’s final deal, the real substance of
the recent revisions–sought by Trump and US corporations and
bankers–has had more to do with protecting the interests of US big
pharma companies and US oil and bankers.
Big pharma has always wanted NAFTA-USMCA
to include what it wanted in the Trans Pacific Partnership (TPP) deal it
didn’t get in 2017: i.e. protections on pricing of its drugs in Mexico
at levels closer to its price gouging levels in the US. The fine print
in the USMCA will tell whether it got this, or at least got a big change
from Mexico’s current rules that keep the price of drugs lower in
Mexico than in the US.
Another reported big concession by Mexico
in the recent revisions apparently addresses the protection of US oil
and energy, telecom and banker interests. Since assuming the Mexico
presidency, Lopez-Obrador (AMLO) has been moving toward re-nationalizing
Mexico’s PEMEX oil company that had come increasingly under financial
control in recent decades by US investors and banks. AMLO wants to
restore it to its former Mexican government ownership, or at least to
control by Mexican banks and capital. Legislation has been drawn up by
the AMLO adminstration to enable re-nationalization. US bankers and oil
interests in response have wanted changes in the NAFTA-USMCA (NAFTA 2.0)
to protect them from re-nationalization. They apparently have gotten
it. Reportedly language in the USMCA now exempts oil, gas, power,
transport, cement, banks and telecom from any potential future Mexican
re-nationalization.
Free trade treaties are always more about
money capital flows (from the US into the host country) than about goods
flows across borders, even though the goods flows is what’s mostly
reported in the media and press. NAFTA has been no different. Free
trade–whether the original NAFTA 1.0 or the current 2.0 revisions called
the USMCA–is about financing the relocation of US business and
manufacturing from the US to the host country.Then about allowing US
companies thereafter doing business in the host country to ship their
lower cost goods back into the US market without having to pay tariffs.
US corporations make greater profits, not only from cheaper production
costs and absence of tariffs, but from continuing to charge higher
prices in the US when they ship them back, tariff free, as well. But
this is all greater profits from production and goods flows.
Free trade provides even greater profits
for US investors and bankers who ‘grease the wheels’, so to speak, of
the money capital flows in the first place. The money flows are what
make profits from production of goods flows all possible int he first
place. Banks charge the interest on the loans, and big fees on mergers
and acquisitions by US business in the host country, now allowed by the
free trade treaty. Banks also buy up the banks in the host country and
make more money from lending to host country businesses. Offshore
production and lending also allow US multinational corporations to
engage in what’s called ‘intra-company’ price manipulation which permit
them to reduce taxes on lower reported profits in the US. The offshored,
foreign subsidiary operations ‘book’ all the profits–kept offshore and
reduced in the US by means of intra-company price manipulation. Profits
are still further boosted as now, under Trump, US multinational
corporations get to avoid virtually all taxes on their offshore
operations, as a result of Trump’s 2018 multi-trillion dollar tax cuts
for multinationals.
Yet Trump, the Democrats, and the US
corporate media would have us think the USMCA revisions are all about
protecting US workers’ interests by introducing dispute panels. The five
million US workers who have lost their jobs under NAFTA gained nothing,
and paid everything in lost jobs, under NAFTA 1.0. And that’s not
changing one iota under NAFTA 2.0, e.g. USMCA by introducing panels–or
even if actual independent inspections were allowed. Under Trump no jobs
have come back to the US due to any of his trade wars; and none will
after USMCA revisions are signed off either.
Free trade is about enriching bankers and
investors who ‘grease the wheels’ of US corporate foreign direct
investment into the host country, now permitted by the free trade deal.
Free trade is about raising profits and stock prices of US multinational
corporations once they set up operations or buy up companies in the
host country. Free trade is about politicians in both wings of the
Corporate Party of America (aka Democrats and Republicans) fooling
workers that they are somehow protecting their interests.
So why the closing of the USMCA deal and
revisions now? After a year of stalemate in Congress? Likely because
Democrat leaders are desperate to show their impeachment proceedings
against Trump are not preventing them from passing legislation
otherwise. But does anyone think that Trump, his Trumpublicans in
Congress, i.e. Mitch McConnell and other Republican political
sycophants, would likewise sign a deal if they were in the Democrats
place? No, they’d play hardball and continue to refuse to agree to
anything right up to the 2020 election.
Trump has recently softened his USMCA
position as well in an attempt to close a USMCA deal with Congress and
Mexico. Why now? Because Trump’s trade war with China has stumbled and
stalled. It appears, per the Wall St. Journal today, that Trump will
postpone his scheduled December 15 additional tariffs on China as a
concession to get China to buy more of US farm goods. Trump needs to
show something from his 18 months of trade wars. The US trade deficit
has barely shifted at all during the period, still running near $50b a
month. He desperately needs the USMCA deal–any deal–given that the
China-US ‘mini’ trade deal is going nowhere and may not even get signed
next year. (And it won’t if Trump does not agree in 2020 to further cut
US tariffs if he wants more China farm purchases).
Trump’s recent re-imposition of tariffs on
Brazil-Argentina steel should also be viewed as part of the mix of
trade events in recent weeks. as the China mini-deal stalled, he had to
look tough somewhere. Re-imposing steel tariffs was also a not so veiled
threat to Brazil-Argentina (which hardly import any steel to the US at
all) that they should think twice about increasing sales of wheat and
soybeans to China. Trump’s tariffs on their steel is a shot across their
trade bow. Both Trump’s concessions on USMCA and his re-imposing of
steel tariffs on Brazil-Argentina are indications of his failing trade
policy and his weakening bargaining position on such policy as the US
2020 election grows nearer.
Both he and the Democrats want to ‘look
good’ for 2020 election purposes: Trump wants to show (and later
exaggerate) what he achieved in the revisions to USMCA. Pelosi-Shumer
want to argue (and will also exaggerate) the phony labor protections
they achieved in the revised USMCA.
But US workers will get, as they have been
getting, nothing out of the USMCA or any Trump trade deal so far, more
lost jobs and higher prices on imported goods– to be exact $42 billion
more in higher prices, according to the NY Fed, and $1000 per month in
reduced household income due to the higher import prices, according to
estimates by Chase Bank research.
*
Note to readers: please click the share
buttons above or below. Forward this article to your email lists.
Crosspost on your blog site, internet forums. etc.
This article was originally published on the author’s blog site, Jack Rasmus.
Jack Rasmus is author
of the just released book, ‘The Scourge of Neoliberalism: US Economic
Policy from Reagan to Trump’, Clarity Press, January 2020, which is now
available for purchase at 20% discount from his blog, jackrasmus.com, and website, http://kyklosproductions.com. (Chapter 8 addresses the origins and evolution of US trade negotiations under Trump in further detail).
Featured
image: President-elect Donald J. Trump and U.S. Speaker of the House
Nancy Pelosi smile for a photo during the 58th Presidential Inauguration
in Washington, D.C., Jan. 20, 2017. More than 5,000 military members
from across all branches of the armed forces of the United States,
including reserve and National Guard components, provided ceremonial
support and Defense Support of Civil Authorities during the inaugural
period. (DoD photo by U.S. Air Force Staff Sgt. Marianique Santos)
The original source of this article is Global Research
Copyright © Dr. Jack Rasmus, Global Research, 2019
Blogger's note:
subterrnews.blogspot.com does not send cookies, or collect any information on
those using the blog. However, the blogspot is on google, and google may
collect information, and send cookies. Many of the links that we
connect to do not send out cookies or collect information, but some do.
You are keying in to this blog, and you have agreed to this.
The views expressed in the articles
do not necessarily represent the opinions of this blog. They are the views, and opinions of the
author(s) of the article.
0 comments:
Post a Comment