 |
FRIDAY, SEPTEMBER 28, 2018
Click HERE for the September 20 quote from America's ambassador to Canada.
|
MEXICO'S NEW TRADE AGREEMENT WITH THE U.S.
"We have no option but to play ball."
Karen Antebi
September 26, 2018
|
Editor's note. The title for today's entry was drafted in September, that is before the October 1 Rose Garden announcement by President Trump and the news that the three North American countries have reached agreement on a replacement for NAFTA. The new deal is the United States-Mexico-Canada Agreement or USMCA. We will devote the next TTALK Quote (and doubtless several thereafter) to this successor agreement for North America. First, though, we shall take this brief look back at the comments on the U.S.-Mexico portion of the agreement, as seen from the perspective of a Mexican official.
On August 27, 2018, in a now famous telephone call from the Oval Office, President Trump announced that the United States and Mexico had reached an agreement on a replacement for NAFTA. President Peña Nieto of Mexico was on the other end of the line, and while the focus then was on the newly minted bilateral agreement, President Pena repeatedly expressed the hope that, in the end, Canada would be part of the deal.
Karen Antebi is the Economic Counselor for the Trade and NAFTA Office at the Embassy of Mexico in Washington. Last Wednesday, September 26, she was the first of four speakers at GBD's annual Gavel Day lunch. In her talk, she too expressed the hope that, ultimately, Canada would be part of any new North American trade agreement. Indeed, her concluding comment was, "As for our North American friend and other NAFTA partner [Canada], we still would like this agreement to be trilateral. That would be our first choice."
The bulk of her comments, however, dealt with both the character of the new U.S.-Mexico agreement and the economic and political forces that led to it. Here, for example, is some of the context for today's featured quote.
MS. ANTEBI
It is not a secret that the United States is looking to restructure the world trade order. .... Are commitments going to be enough? ... I feel that in this new world order that the President is trying to shape that it's really shifting from a commitment base to a results-oriented one. And given the geography and the interdependence that Mexico has with the United States, and the thriving relationship, and all the good that I can tell you about NAFTA 1.0 and what it did to reshape Mexico, the Mexican society, and our bilateral and trilateral relationship, we have no option but to play ball.
Ms. Antebi went on to offer a good, quick overview of the bilateral agreement. For those who are interested, we have posted a transcript of her comments on the GBD website. At this stage, however, those looking for outlines and highlights of the agreement will want to consult the USMCA documents on the USTR website. However, Ms. Antebi's remarks also included ways of looking at the recently concluded negotiations that are not likely to show up in official summaries.
One of these was her assessment that "this negotiation was disruptive and atypical." It was atypical, she said, "because the parties did not come to the table with a shared vision about the value of free trade or integration." That was followed by her assessment that "this was a pragmatic, not a principles-driven negotiation." Still, one was left with the impression that Mexico's main objectives were met, namely, "to ensure that there is certainty, to ensure that there are rules," and to modernize the agreement.
|
It We have three, starting with two sentiments. The first, of course is a sincere thank-you to Ms. Antebi. We are extremely grateful to her for participating in GBD's 2018 Gavel Day and for giving such a thoughtful presentation.
The second is a note of congratulations - not only to Ms. Antebi but to all of those from the three North American governments who have worked so hard these last several months to come together on a new trade agreement for the region. That is a thought we shall probably be expressing many times over in the months ahead, but we should start here.
Finally, we would offer this brief reaction to Ms. Antebi's statement that "the United States is looking to restructure the world trade order." We would quarrel just a bit. Different people use different dates for the origin of the current "world trade order." Some point to the Reciprocal Trade Agreements Act of 1934. Others look to the signing of the General Agreement on Tariffs and Trade in 1947. And some look to the creation of the World Trade Organization in 1994. Whatever the starting point, the underlying reality has undergone substantial change since. Nothing reflects this more profoundly than a brief reflection on Article I of the General Agreement on Tariffs and Trade. This is the MFN article, and it sets out the institution's bedrock principle. It says:
With respect to customs duties and charges of any kind imposed on or in connection with importation .... any advantage, favour, privilege or immunity granted by any contracting party to any product in or
destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.
In short, under that version of the GATT system, a concession to one was a concession to all. And it worked. It worked through the Tokyo Round and arguably even through the Uruguay Round, though by 1994 the erosion was on its was to swamping the system. It now it has. From GSP to the hundreds of bilateral and regional agreements that have been negotiated over the last several decades, the exceptions have overtaken the rule. The likelihood today is that a WTO member is getting "most favored nation" treatment from a trading partner only if it has a special arrangement with that partner.
And all of this was in place before Americans went to the polls in November 2016. Certainly, the Trump Administration has brought change to the trading system. Where NAFTA is concerned it did in fact upend established practice, and there will be more to say on that as we all learn more about the new USMCA. Where the rest of the world is concerned, however - and that includes China - it seems to us not that the United States is seeking to restructure the world trade order as it is calling attention to the fact that it is being restructured.
|
Transcript from a Presentation is a link to GBD's transcription of Ms. Antebi's remarks at the GBD event on September 26.
In the Rose Garden takes you to President Trump's October 1 announcement of a new trilateral agreement for North America.
Fact Sheet is the White House fact sheet on the USMC Agreement.
Overview is one of the many documents on the new U.S.-Mexico-Canada Agreement now available on the USTR website.
Article I takes you to an online version of Article I of the General Agreement on Tariffs and Trade.
|
| TO GET THE TTALK QUOTES IN YOUR INBOX
Or Other GBD Notices, click below.
|
|
©2018 The Global Business Dialogue, Inc.
1717 Pennsylvania Ave., NW, Suite 1025
Washington, DC 20006
Tel: (202) 463-5074
R. K. Morris, Editor
Joanne Thornton, Associate Editor
|
|
|
|
|
|
