THE TTALK QUOTES 

On Global Trade & Investment
Published By:
The Global Business Dialogue, Inc.
Washington, DC  Tel: 202-463-5074
 
No. 49 of 2019
WEDNESDAY, JULY 17, 2019

Click HERE for last Thursday's quote from Iowa's Gov. Reyl
 
THE BRAND NEW USMCA
   
 "The USMCA will be the most modern, cutting edge trade agreement in history, with the strongest protections for the American worker ever put in a trade agreement.

"And that was the single most important thing to me."

Donald J. Trump
July 12, 2019
CONTEXT
President Trump was in Milwaukee last Friday where he spoke at Derco Aerospace, a subsidiary of Lockheed Martin. Yes, it was a USMCA speech, but like many of the president’s speeches it was a full-throated list of the achievements of his administration. It covered a lot of territory, from the soaring Dow Jones index to the high levels of employment – the unemployment rate in Wisconsin is at 2.8 percent – and including the Salute to America, the Independence Day celebration. There was, in fact, a clear connection between his hosts for the Milwaukee event and the Salute to America. That event included flyovers by Navy aviators in F-35 Lightning IIs, made by Lockheed Martin.

On the White House website, the President’s remarks in Milwaukee are described as a speech in support of USMCA – the United States-Mexico-Canada Agreement. It certainly was that, and, in a moment, we’ll share a few paragraphs on this new North American trade agreement. 

Really, though, the central theme was what President Trump sees as the rejuvenation of American manufacturing. These two sentences make that point:

We’re here today to celebrate the triumphant return of American manufacturing.

And then:

We’re proudly defending our most important national resource: the American worker.

And, as he reiterated last week in Milwaukee, he believes NAFTA contributed significantly to the earlier erosion of U.S. manufacturing. In President Trump’s words:

As a candidate for President, I also promised to replace the disaster known as NAFTA. Since NAFTA’s adoption, the United States was losing jobs and losing plants like nobody ever lost before. 

Then he turned to USMCA:

That’s why we’re replacing NAFTA with the brand new United States-Mexico-Canada Agreement. The USMCA will be the most modern, cutting edge trade agreement in history, with the strongest protections for the American worker ever put in any trade agreement. And that was the single most important thing to me. …

By ratifying the USMCA, Mexico has now committed to be the toughest and have the toughest labor provisions, the highest environmental standards, and the most comprehensive enforcement provisions ever implemented in a trade agreement – ever. …

Once fully implemented, the USMCA will bring up to 600,000 jobs to our shores. And it’s probably going to be over 1.2 million.

On behalf of our nation’s loyal, hardworking citizens, I’m calling on Congress to pass USMCA and send it to my desk immediately for signature.

Well, you get the idea.
COMMENT
Contemporary politics abounds with rhetorical chasms. One is the canyon between those, like the President, who argue that USMCA is something wholly different from NAFTA and much, much better, and those who see in the USMCA, at best, a mild updating of NAFTA. A full analysis of those differences will have to wait. The immediate questions will not. 1) Will Congress approved the USMCA agreement and implementing legislation in this session? 2) Should it? 3) And will it matter? 

The first questions will be answered soon enough, either with votes (yes) or inaction (no). As for the second question, our answer is “yes,” they should. 

(We hasten to add our usual caveat. The Global Business Dialogue does not express collective positions. It is an organization in which the members and the staff speak for themselves. Your editor is staff, and he believes Congress should approve USMCA as quickly as possible.)

The last question, will it matter, is a tricky one. One could argue that the United States, Canada, and Mexico could bump along under NAFTA for the next year or so without serious harm to any of them. That assumes, of course, that there are no other changes in the interim. In light of recent history and the President’s repeated reference to NAFTA as “a disaster for this country,” the possibility of the Administration withdrawing from NAFTA cannot be discounted. 

***

As a negotiating tactic, there is a certain similarity between President Trump’s implicit threat to withdraw from NAFTA and President Nixon’s approach to North Vietnam. Bob Haldeman, Nixon’s former chief of staff, quotes Nixon as follows:

I call it the Madman Theory, Bob. I want the North Vietnamese to believe I've reached the point where I might do anything to stop the war. We'll just slip the word to them that, "for God's sake, you know Nixon is obsessed about communism. We can't restrain him when he's angry … .

Substitute Congress for North Vietnam and NAFTA for the war and, well, you get the idea.
USMCA and North American Business will be the topic at GBD’s next event. This will open with remarks from Rep. Henry Cuellar of Texas and will include of panel of business representatives from all three North American countries. 

Click the title link above for full details, including speakers and registration options. 
SOURCES & LINKS
President Tump in Milwaukee takes you to the text of the President’s July 12 speech at Derco Aerospace. This was the source for today’s featured quote.

Madman Theory is a link to the Wikipedia entry with comments from Richard Nixon, as quoted by H.R. Haldeman.
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