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Sunday, August 26, 2018

But How Can That Be? -- A Good Deal With Mexico on Trade????

According to many reports, the US and Mexico have resolved all bilateral issues between the two countries.  That will allow Canada to rejoin the talks to see if the final three way NAFTA revision can be signed while Mexican president Nieto remains in office.  The final sticking point was a compromise on the importation into the USA of cars assembled in Mexico that do not meet the place of manufacture content limitations.  Existing plants will be grandfathered, but any new plants will have to meet the strict limitations.  It also seems (although this has not be confirmed) that any enlargement of existing plants will be treated as a new plant.

Think about what that compromise will do.  It will protect Mexico's present jobs in car assembly plants, but it will also mean that foreign car companies will not be able to avoid US import rules by doing final assembly in Mexico of parts made in Germany, Japan, Korea or China.  This will protect jobs currently in the USA.  That seems both like a win for the US and a reasonable compromise with Mexico.

How can it be that the USA negotiated a fair deal with Mexico that is much better for American workers than the old NAFTA treaty that Clinton put in place in the 1990's?  After all, Trump is President, and the media keeps telling us that he doesn't understand trade or business or foreign policy.  Of course, the media is just wrong, but will they admit it when the deal is finalized?  I doubt it.  Most likely, no matter what the final deal says, Democrats like Chuck Schumer and Nancy Pelosi will tell us that that it favors the wealthy over the American worker.  Truth won't matter.  Most likely, the mainstream media will repeat the charge that the deal is bad for the USA no matter what the actual truth is.

My guess, however, is that the average American will see through the media/Democrat BS and approve of the deal as the win that it is.

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