A new amigo who creates jobs

Both sides get to claim victory.

August 31, 2018

A new amigo who creates jobs

By Silvio Canto, Jr.

We have not seen the details of the U.S.-Mexico trade agreement. So let's wait for the text to make a final conclusion.
Nevertheless, we can say a couple of things.
First, it could be better for U.S. workers than NAFTA, as Vox points out:
So far, the new United States-Mexico Trade Agreement seems a lot like NAFTA, though Canada has yet to opt in as it continues negotiations. Agricultural products would remain tariff-free under the new deal, and there is still no required renegotiation every five years (which Trump wanted).

It would be harder, however, for businesses to claim harm from unfair trade practices.
But there is one striking difference from NAFTA: The new pact includes several labor rules meant to benefit workers on both sides of the border.
For example, Mexico has agreed to pass a law giving workers the right to real union representation, and to adopt other labor laws that meet international standards set forth by the United Nations.
American auto companies that assemble their cars in Mexico would also need to use more US-made car parts to avoid tariffs, which would help US factory workers.
And about 40 percent of those cars would need to be made by workers earning at least $16 an hour -- three times more than Mexico’s minimum wage.

My translation: Both sides got to claim victory. President Trump and incoming Presidente Andrés Lopez-Obrador will both claim that they are protecting their workers. Please remember that both men ran against NAFTA because it was a lousy deal! Both men are also strong nationalists.
Also, what I hear from Mexican businessmen is that everyone south of the border wants President Trump to stick it to China.
My second point is that this deal shows significant pragmatism on the Mexico side. They may not like President Trump's style but they love what he is doing for the U.S. economy. It's obvious that a U.S. economy growing at 4% or better is "muy bueno" for Mexico.
So what happened? The Mexicans love their new "amigo" up here or the one who is creating jobs and allowing U.S. citizens to buy more avocados and lots of other things "Hecho en Mexico".

PS: You can listen to my show (Canto Talk) and follow me on Twitter.


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