Democrats use Trump’s own words against him in border wall debate

President Trump on Thursday repeated his claim that Mexico will pay for his border wall — and Democrats gleefully welcomed the news, saying that if that were the case, the US wouldn’t have to.


“Well, Mr. President, if you say Mexico is going to pay for the wall through NAFTA, which it certainly won’t, then I guess we don’t have to. Let’s fund the government,” Sen. Chuck Schumer cracked Thursday on the Senate floor.

Trump had tweeted that the revised version of NAFTA, which he calls the USMCA, would generate so much cash for the US that the $25 billion wall would be paid for in full.

“Honestly, if the president really believed what he tweeted this morning that his new NAFTA would pay for the wall, he wouldn’t be threatening to shut down the government unless American taxpayers fund his wall. You can’t have it both ways,” Schumer continued.

“The president’s position on the wall is totally contradictory, ill-informed, and frankly irresponsible. It’s not a serious proposal, it’s a throwaway idea the president used in the campaign and still uses to fire up his base. A Trump temper tantrum and shutdown threat isn’t going to change any minds here in Congress.”

House Minority Leader Nancy Pelosi also looked askance at the president’s claim.

“The money the businesses make? What money is he talking about that’s going to go pay for the wall? It just doesn’t measure up,” she told reporters Thursday.

Pelosi said “the American people are still paying the price” if new revenue from Trump’s trade deal went to the wall.

Earlier Thursday, Trump, as part of his latest tweetstorm — he also went after his former lawyer Michael Cohen and ex-national security adviser Mike Flynn for cooperating with the feds’ Russia probe — repeated his claim that Mexico would pay for the wall but with a twist.

“I often stated, ‘One way or the other, Mexico is going to pay for the Wall.’ This has never changed,” the president said in a tweet.

“Our new deal with Mexico (and Canada), the USMCA, is so much better than the old, very costly & anti-USA NAFTA deal, that just by the money we save, MEXICO IS PAYING FOR THE WALL!”

Trump on Tuesday told Pelosi and Schumer in a contentious Oval Office sitdown that he would be “proud” to shut down the federal government if Congress doesn’t give him the $5 billion he wants for the wall.

Democrats have offered no more than $1.6 billion for his project.

Mexico has repeatedly rejected Trump’s demand that it pay for the wall.

On Thursday, Mexican President Andres Manuel Lopez Obrador said he did not discuss the wall when he spoke with Trump on Wednesday to talk about the issue of migration.

“We have not discussed that issue, in any conversation … It was a respectful and friendly conversation,” Lopez Obrador told Reuters.

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Mexico’s first left-wing president gave a fiery inaugural speech against neoliberalism in Mexico. But he barely mentioned NAFTA.

Presidential candidate Andres Manuel Lopez Obrador waves as he addresses supporters after polls closed in the presidential election, in Mexico City

I had the great fortune to attend the inauguration of Andres Manuel Lopez Obrador (or AMLO, as he is known) as the 58th Mexican president on December 1. The atmosphere at the Legislative Palace was electric with the knowledge that Mexico would be beginning its “Fourth Transformation” — following its 1810 independence, the 1855 reformation, and the 1910 revolution — with the first left-wing presidency in its history.

It was AMLO’s third attempt at the office. In 2006 Felipe Calderón orchestrated a cyber fraud that gave him a slim advantage over AMLO. And in order to win in 2012, outgoing president Enrique Peña Nieto engaged in tricks like giving away cash-loaded bank cards.

When AMLO arrives following his 2018 victory, his supporters chanted Si se pudo: “Yes we could!”

AMLO started his speech off by going full throttle against neoliberalism and corruption in Mexico, both of which he’s fought for decades. He said the crisis in Mexico originated not only because of the failure of the neoliberal economic model, but also because of the “deep predominance during this period of the dirtiest display of public and private corruption.”

Outgoing President Peña Nieto sat stoically, looking uncomfortable at times.

The new president explained how Mexico’s economy grew from the end of the revolution in 1917 to the end of the 1970s at rates of 5 to 6 percent a year. With the neoliberal period starting in the 1980s came the debacle. It was marked by low growth, inflation, and indebtedness. Even after endless privatization schemes, the national debt reached 10 trillion pesos — the equivalent of over $500 billion, more than 42 percent of Mexico’s GDP — under Peña Nieto who sank down further in his chair when the subject came up.

AMLO rambled on against neoliberalism for quite a while. He said that another “pearl” of this model is the “privatizations and the corruption, the former being synonymous with the latter.” He explained how neoliberal policies have made Mexico a net importer of basic food staples like corn, how Mexican salaries have lost 60 percent of their purchasing power, and how Mexico became the one of the leading sources of out-migration in the world — such that 24 million Mexicans live in the United States, according to him.

“Political and economic power have fed and nurtured each other,” he concluded, “which has led to the robbery of the people’s property as well as the wealth of the nation.” Peña Nieto undoubtedly felt that at that moment all eyes were on him.

A Long Career

This was AMLO at his best. The script was completely his. Despite having created a mixed cabinet — one that includes pro-business people such as cabinet chief Alfonso Romo — for the purpose of helping him keep the trust of “the markets” during the exceedingly long six-month transition period, AMLO took the bull by its horns and made it clear what he has stood for all his political life.

As far back as 1991, he led rallies in his home state of Tabasco denouncing electoral fraud by the ruling party. Later he fought the privatization of Mexico’s oil state company PEMEX, denounced the Savings Protection Banking Fund (FOBAPROA) scheme that bailed out bankers at the expense of the Mexican people, and left the Institutional Revolution Party (that monopolized political power for decades) to form with Cuauhtémoc Cardenas the Democratic Revolution Party (that has now almost disappeared).

As mayor of Mexico City from 2000 to 2005, he initiated social programs to help the elderly and the handicapped, improved access to free medicines and schools, and ensured the construction of new preparatory schools — and even a new university — for Mexico City’s most disadvantaged sectors of society. He even had a new hospital built after decades of inaction from previous governments.

Eventually AMLO’s own PRD became corrupted, complicit with privatization schemes and anti-union reforms. So AMLO left it and formed the MORENA (Movement of National Regeneration) party, which now has a majority in both houses of the national legislature.

Moreover, MORENA won four states (out of eight that had elections this year), and several municipalities and big cities — including the biggest local prize, Mexico City, which elected a woman for the first time: Claudia Sheinbaum. MORENA offers the most gender-balanced governments and legislatures, and AMLO’s cabinet does as well.

But What About NAFTA?

With such political favorable scenario, I have no doubt that AMLO can deliver on promises to help Mexico overcome decades of increasing inequality, rampant poverty, and forced migration.

But one thing gives me pause.

In his acceptance speech against neoliberalism, he mentioned NAFTA only once. He said he, president Trump, and Canadian prime minister Justin Trudeau were talking about how to go beyond NAFTA and “reach an investment agreement among companies and governments of the three countries to foster development of Central American countries and also ours,” which he pitched as a “non-forcible” way to address “the migratory phenomenon.”

However, AMLO didn’t mention the recently concluded U.S.-Mexico-Canada Agreement (USMCA), aka NAFTA 2.0. Why would AMLO not tackle NAFTA more forcefully when this agreement has been the backbone of neoliberalism, and the cause of migration of millions of Mexicans to the United States?

Now that President Trump threatens to cancel NAFTA if legislators in the United States don’t immediately ratify the “new” version, AMLO and his MORENA party have a golden opportunity to get rid of it once and for all.

That’s exactly what Mexican civil society coalitions like Mexico Better off Without FTAs have been calling for.

It wouldn’t be a disaster for Mexico. Our trade with the United States would revert to WTO rules, which are similar to NAFTA’s. But withdrawing would effectively eliminate many other rules found in NAFTA (and apparently in the USCMA) that go well beyond trade. Those rules have handcuffed the Mexican government’s capacity to promote the Mexican economy, particularly in the countryside; support the livelihoods of indigenous people; expand the provision of affordable medicines; and protect the environment.

The MORENA party and AMLO should be very vigilant. They must wait until the Mexican Senate receives the official text of the USMCA in Spanish (Peña Nieto’s government pretended to “inform” the public with a propagandistic summary while the unfinished text remained only in English), and then should carry out an official consultation with all social and economic sectors.

AMLO has promised a series of consultations for development and infrastructure projects in Mexico. Good. He also consulted about the name of the new NAFTA — Trump’s “USMCA,” rebranding that consciously put the United States first — and rechristened it T-MEC (Tratado Mexico, Estados Unidos, Canada). Not so good, because it looks more like Trump-MEC. And it was Trump who pushed this new agreement on everyone.

More importantly, consulting people merely about the name of the renewed NAFTA is a serious shortcoming. What’s needed is a much broader consultation about all aspects of Mexico’s economy and society that have been, and will be, impacted by such an agreement.

In sum, there should be no ratification of the USMCA until the public has had an opportunity to read and discuss the official text already signed by Trump, Peña Nieto, and Trudeau — on Peña Nieto’s last day in office.

AMLO and MORENA represent a great hope for Mexicans. Opening the new NAFTA, before it’s ratified, to broad and binding consultation with the Mexican people would be a bold first step. Not doing so — and ratifying with haste — would be giving in to neoliberalism and its corrupt practice of passing these agreements behind peoples’ backs.

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How Trump the ‘Tariff Man’ could lose to ‘Dow Man’ Trump

The president’s continuing obsession with the stock market could force him to cut a trade deal with China.

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President Donald Trump loves two things very much: tariffs and a rising stock market. It’s becoming increasingly clear he can’t have both.

Free-traders inside and outside the White House are now hoping that Trump’s love for new highs on Wall Street will temper his commitment to trade battles and help bring the current fight with China to a soft landing rather than total war next year.

“I think Trump the Dow Jones Man is ultimately going to eat Trump the Tariff Man,” said one former senior administration official intimately familiar with the president’s stock market obsession, citing Trump’s touting of a recent agreement to hold off on increased tariffs after a dinner with Chinese President Xi Jinping. “What he agreed to after that dinner had basically been on the table for two years. He knew

he had to give Wall Street something.”

Both markets and Trump are fixated on the Federal Reserve this week, with the central bank expected to raise rates by another quarter point on Wednesday. But no matter what the Fed does, investors early next year will pivot to the showdown between Trump and the Chinese. And pressure from Wall Street could push Trump to cut a deal.

“The question is, what is Trump’s pain threshold? And what is China’s pain threshold? It’s almost like two cars zooming toward each other. Which one is going to turn first?” asked Stephen Moore, visiting fellow at the Heritage Foundation and an outside Trump adviser. “If the stock market fell another 1,000 points it would give him pause. He does love a bull market and hate a bear market. But he also feels this is the fight of our lifetime.”

The tensions between Trump’s commitment to tariffs and his love for a soaring stock market are at the highest of his presidency. After markets soared in 2017, Wall Street hit a wall, with stocks dropping in recent weeks in part on fears that China and the U.S. will not reach an agreement by a March 1 deadline and Trump will slap tariffs as high as 25 percent on everything China exports to the U.S., inviting significant retaliation.

The Dow Jones is now down around 1,000 points, or close to 5 percent, for 2018. The Standard & Poor’s 500 is also lower for the year, as is the Nasdaq, home to tech stocks like Apple that are highly sensitive to tensions with China and potential tariffs. All three indices are now in “correction” territory, meaning a drop of 10 percent from their recent highs. And investors blame trade tension for much of the declines.

“It’s really all about the global economy slowing down, and that’s directly linked to the trade dispute between the world’s largest economy and the world’s second-largest economy,” said Jack Ablin, chief investment officer at Cresset Capital Management. “What market participants thought was just tactics from Trump on China could turn into policy, and if that’s the case then investors are going to be held hostage.”

Trump and other senior administration officials, including Treasury Secretary Steven Mnuchin, have long considered the stock market a scorecard on White House performance. Trump has touted a rising market over 30 times on Twitter since taking office. And senior aides say he watches market moves throughout the day on cable news and regularly asks how his potential decisions will impact Wall Street.

“You walk in the Oval and he wants a stock market quote, I give him that,” Larry Kudlow, Trump’s top economic adviser, said in a recent interview. When the market is falling, Trump wants to know precisely why, Kudlow said.

The recent standoff with China has highlighted the tension between Trump’s love for tariffs and his fixation on higher stock prices as a measure of his success. Immediately after the meeting with Xi in Buenos Aires, markets shot higher.

When it became clear that the two sides remained far apart on key issues, and that the White House itself was divided on the path forward, the rally fizzled.

Trump tried to reassure investors on Dec. 3. “President Xi and I have a very strong and personal relationship. He and I are the only two people that can bring about massive and very positive change, on trade and far beyond, between our two great Nations,” he tweeted.

Just a day later, Trump issued one of the biggest market-moving tweets of his presidency, killing much of the post-China meeting rally. “I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so,” Trump tweeted the morning of Dec. 4. “It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN.” The Dow closed the day down nearly 300 points.

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The impact of artificial intelligence on international trade

Artificial intelligence (AI) stands to have a transformative impact on international trade. Already, specific applications in areas such as data analytics and translation services are reducing barriers to trade.


At the same time, there are challenges in the development of AI that international trade rules could address, such as improving global access to data to train AI systems. The following provides an overview of some of the key AI opportunities for trade as well as those areas where trade rules can help support AI development.


Before proceeding to the impact of AI on trade, it is important to clarify what is meant by AI. More specifically, that there is a key difference between narrow AI such as translation services, chatbots, and autonomous vehicles and general AI—“self-learning systems that can learn from experience with humanlike breadth and surpass human performance on all tasks.” General AI raises broader existential concerns, such as how to align the goals of such a system with our own to prevent catastrophic outcomes,[1] but general AI remains a technology still to be developed in the distant future.

To understand the potential significance of narrow AI for trade, it is also important to briefly consider its core parts. In particular, narrow AI is based on machine learning, which uses large amounts of data and powerful algorithms to develop increasingly robust predictions about the future.[2]The data used for machine learning can be either supervised—data with associated facts, such as labels—or unsupervised—raw data that requires the identification of patterns without prior prompting.[3] This includes reinforcement learning—where machine-learning algorithms actively choose and even generate their own training data.

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Trump Blinks and Retreats at the G20 Meeting with Xi


The first reports emerging from the G20 meeting in Buenos Aires today, December 2, 2018, are that Trump and Xi have agreed to put their trade war on hold, a kind of ‘trade war armistice’, at least for the next 90 days.

Trump entered into his meeting this past weekend with China’s president, Xi, having imposed $50 billion in tariffs at 25% on China goods imports last July, to which another $200 billion was added thereafter. Tariffs on the $200 billion were set at 10%, but were scheduled to rise to 25% on January 1, 2019. Before the US November elections, Trump further threatened to add a further $267 billion if China continued to refuse to meet with the US.  But China didn’t take the bait. Trump’s strategy was transparent. His plan was to lure China into negotiations before the US elections so he could act tough for his political base before the US elections.  China refused to be sucked in and refused to come to Washington to be played by Trump.  Instead, it agreed to meet at the G20 gathering this weekend, at a more neutral setting and after the US elections.

In the lead up to this weekend’s G20 US-China meeting, Trump sent conflicting signals to the Chinese.  On the one hand, Trump praised China’s president Xi personally, while announcing the existing 10% tariff hikes on the $200 billion would rise to 25% next January 2019 and that another $267 billion would follow if China did not meet with him.  Meanwhile, China’s counter tariffs on US imports were levied at 25% for its first $50 billion tariffs and set at only 10% on the additional $60 billion on US goods.

However, to date the US-China trade dispute is more like a trade skirmish than a trade war. The initial first $50 billion in tariffs levied by both US and China this past July have been selective. Most have not yet had a significant impact on their respective economies thus far after only four months in 2018. But in 2019 that $50 billion would start to have an impact. Moreover, the $200 billion additional US tariffs, levied at only 10%, have been largely offset by a roughly equivalent 10% decline in the value of China’s currency, the Yuan.

A rise in $200 billion US tariffs, from 10% to 25%, in 2019 would have an impact, however, in 2019. The likely response by China would be to raise its second $60 billion tariffs on US imports by an equal amount, from current 10% to 25%. That could very well mark the start of a true US-China trade war.

China could also add more non-tariff barriers, or slow its purchase of US Treasury bonds, or block approval of mergers of US companies globally with operations in China, or encourage boycotts of US goods in China, or allow its currency to devalue well below the current 10% decline.  These are measures that are typical of true trade wars, but which have not been employed as yet by China or the US.  Sparring with tariffs are just initial moves, especially when tariff rates are relatively low, selectively applied, and not fully implemented yet.

While the US and China were clearly on the brink of a bona fide trade war, but until the G20 meeting they had not quite taken that last step. Nor is it likely now that they will. The Trump-Xi meeting at the G20 represents a kind of a trade policy ‘rubicon’ which neither has crossed as yet. If the initial reports coming out of the G20 meeting are accurate, then Trump and Xi have so far continued to decide not to cross the river of no return with regard to a war over trade.

The question is why now the apparent ‘armistice’ in the trade war? Why, after months of threats and warnings aimed at China, has Trump decided to back down?  For that’s exactly what the agreements with China at the G20 represent: Trump has backed off, making concessions, while the Chinese have only reiterated proposals they publicly offered over the course of the last six months.

The reasons for the Trump retreat lay in the significant changes in economic conditions since last spring.  At the time Trump launched his ‘trade war’ last March 2018 the US economy was accelerating due to multi-trillion dollar tax cuts for investors and corporations; the global economy still appeared to be growing nicely; US profits were rising 20%-25% and stock markets booming; and the Fed, the central bank, was still relatively early in its scheduled interest rate hikes. But that’s all changed as of year end 2018.

With growing indications that the global economy is slowing—with another recession in Japan and German and Europe economies contracting and weakening facing the UK Brexit and Italian bank problems—the US and global stock markets in recent months had begun to retreat noticeably.  Early signs since October of US economic slowdown in 2019 have begun to emerge, especially in construction and autos. Japan is in recession. Germany’s economy is contracting, with Europe not far behind facing imminent crises as well in the UK’s Brexit next March and growing debt refinancing problems in Italian, Greek and other Euro banks. And more emerging market economies continue to slip into recession.

Faced with these looming economic realities, as well as growing political pressure at home, Trump eagerly sought the meeting with Xi at the G20 gathering despite continued and intensifying in-fighting between the factions on his US trade negotiating team.

Those factions and divisions among the US elite concerning trade center around three issues: first, access by US bankers and multinational corporations to China markets, especially getting China to allow a 51% or more ownership of US corporate operations in China; second, China increasing its purchases of US exports, especially agricultural and energy products; and third, most important, China agreeing to slow its development of nextgen technologies like cybersecurity, artificial intelligence, and 5G wireless—which has assumed the codename in the US of ‘intellectual property’.

Anti-China hardliners—Robert LIghthizer, US office of trade director, Peter Navarro, special advisor on trade, and John Bolton, long time anti-China hawk and national security adviser to Trump—all of whom are closely allied with the Pentagon, military industrial US corporations, and intelligence agencies—have all preferred a trade war with China to achieve US technology objectives.  They have been engaged in an internal US faction fight since last April with the two other US factions—i.e. the bankers and multinational corporations whose priority objectives have been to get open markets and majority ownership rights for US businesses, especially banks, in China; and US heartland agricultural and manufacturing exporters, who represent Trump’s red state political base, who want a return and an expansion of China purchases of US exports.

Since this past summer, the Lighthizer-Navarro-Bolton faction have clearly had Trump’s ear and have prevailed ensuring technology transfer is at the top of the list of US trade negotiations priorities.  However, with the recent weakening of the US stock markets, indications of economic slowdown coming, and growing US business concerns of a bona fide US-China trade war deepening in 2019, Trump has shifted his position toward a softer line in trade negotiations with China, apparently retreating closer to positions of the other two factions in US-China trade negotiations. That softer line is evident in the G20 meeting tentative agreements announced by Trump and Xi.

Put another way, facing the shift to a bona fide trade war in 2019—in the midst of a slowing global and US economy and a likely steeper correction in US stocks and financial markets—Trump met Xi at the G20 and ‘blinked’, as they say.

That Trump clearly retreated is undeniable in the content of the G20 announcement following his meeting with Xi. Of course a Trump retreat is not the likely ‘spin’ it will be given in the US corporate media this coming week. The agreements will be characterized as a mutual ‘pause’ of some sort in what appeared as an inevitable trade war commencing January 2019.

But a consideration of the substance of the verbal agreement between Trump and Xi released this past weekend shows that Trump clearly backed off while Xi simply reiterated what the China team has already offered Trump and had already put on the table the last several months.

Here’s what was agreed in broad principle, at least according to early reports:

  • Trump agreed not to allow the scheduled January 1, 2019 increase in US tariffs on $200 billion of imports from China to rise, from the current 10% tariff rate to the 25%.
  • Trump agreed not to move forward with his threat of another $267 billion tariffs on.

These represent two clear concessions by Trump and amount to reversals of prior US positions. What about China’s response? Unlike Trump, there was no clear retreat from previous positions, i.e. concessions.

  • China agreed to increase US purchases of agriculture goods (actually a restoration of prior levels) “immediately”, in order to ease the US trade deficit with China and boost US farmers and agribusiness. But China had already publicly offered to buy a further $100 billion in previous months. The joint communique coming out of the meeting only indicates to increase US purchases ‘in accordance with the needs of its domestic market’. The $100 billion is thus more a restoration of previous levels of China purchases of US agricultural and manufacturing exports.
  • China agreed to open its markets to US banks and businesses further. But it had already also announced earlier this year it would allow 51% foreign ownership, and suggested it could even go to 100% in coming years. So this too was an ‘offer’ it had already made to the US this past summer.

What about the key tech transfer issue that has split the US elite and the US trade team? That primary demand of the US hard liners, which seemed paramount in preceding months, has been tabled for future discussion. Both US and China have only agreed to discussions for the next 90 days “with respect to forced technology transfers” and related issues. (Reuters report by Roberta Rampton and Michael Martina, 12/2/18, 1:23pm ET). So no agreement on technology. Just a mutual face-saver to meet again and agree “to further exchanges at appropriate times”.

Meanwhile, Trump retreats from raising tariff rates from 10% to 25% and agrees to drop threatening another $267 billion, while Xi simply restates prior offers about more purchases agricultural goods and more US banker access to China markets.

If China’s objective of the Buenos Aires meeting was to get Trump to halt imposing higher and more tariffs—while conceding nothing except further talks on the technology issue—in that objective China has clearly succeeded.  Trump will no doubt spin the additional agricultural purchases and more market access as China ‘concessions’. But these were already conceded before the parties met in Buenos Aires.

In contrast, if Trump’s primary objective, driven by his anti-China hard line US faction, was to get China to slow nextgen technology development and tech transfer, and concede on intellectual property issues, then Trump has clearly retreated at the G20.

Nor is it likely, at the end of the 90 day hiatus early next March 2019, that Trump and the hard-liners faction bargaining position will be any stronger.  The 90 day ‘armistice’ in the emerging US-China trade war might even result in Trump back-peddling further should economic and political conditions worsen appreciably in the interim.

If the global and US economies continue to weaken and slow, which is highly likely, pressure by the other two US trade factions—the one demanding an agreement with China based on more access to China markets and the other demanding settlement so long as China agrees to more purchase of US goods—will only be stronger.

Political developments related to Trump’s business relations in the US and with Russian Oligarchs eventually forthcoming by the Mueller investigation will also likely weaken Trump’s position with regard to resuming a hard line on further tariffs on China. Japan’s recession may also have deepened further by then. Germany’s current economic contraction may have spread to the rest of Europe, which is also facing a confluence of additional problems involving the UK Brexit and the Italian bank problems next spring 2019.

Since 2008 US economic GDP growth has typically slowed dramatically in the winter quarter, and the first quarter 2019 US GDP is likely to again slow significantly from 2018 GDP growth rates. That will be especially the case if the US central bank, the Fed, continues its interest rate hikes into 2019, which appears likely to do at least through next spring.  Trump may also have to focus more on saving his recent US-Mexico-Canada trade deal in Congress. All the above will almost certainly provoke a further decline in US stock and other financial markets as investors grow even more uneasy with Trump policies and increase pressure on Trump to postpone further tariffs on China trade.

More US banker-multinational corporate access to China and more China purchase of US farm goods could supersede US hardline anti-China faction demands for China concessions on tech transfer and nextgen military technology development.

More market access and more China purchases would be easy to ‘spin’ as huge gains by the Trump administration. They’ll just keep talking about technology, while cutting off China companies’ access to mergers, acquisitions and joint ventures in the US and in other US allies’ economies.

Should that occur, the US-China so-called ‘trade war’ will prove as phony as have prior Trump threats to tear up NAFTA, or to fundamentally remake the South Korean-US free trade treaty, or to impose 25% tariffs on German autos and European imports, or Trump’s steel tariffs which are riddled with more than 3000 tariff. While Trump talked tough, all have turned out to be ‘softball’ trade deals granted by the US.

Having ‘blinked’ after meeting with the Xi meeting at the G20 strongly suggests Trump’s potential trade war with China has peaked and will now deflate over time. And should the more serious economic and political developments noted above also materialize in 2019, the deflation and slow retreat may look more like an implosion and a rout.

Trump’s incessant bragging about his great skills and acumen in negotiating ‘deals’ will be revealed as so much egoistic bombast and exaggeration. And forthcoming economic developments and political events in 2019 may unravel more than just Trump’s phony trade offensive launched last spring.

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Chuck Grassley wants to limit Trump’s trade authority

A fresh example of the political hurricane about to hit Trump’s hardline trade agenda: Incoming Senate Finance Chairman Chuck Grassley (R-Iowa) told Axios he may try to make it harder for the president to impose new tariffs.


What he’s saying: Grassley said he would take a favorable view of legislation limiting the administration’s power to impose tariffs to protect national security (known as Section 232 authority). “Maybe the definition of national security or maybe the conditions under which national security could be used as an excuse is a little wide,” he told Axios.

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Why it matters: Grassley’s frankness about supporting this type of effort will cheer free traders. The concept of constraining Section 232 power isn’t new, but Republicans thus far have been loath to defy Trump.

  • That could be changing. Members of Congress sound increasingly worried they’ll need to block the president from putting massive new tariffs on auto imports. Trump already used Section 232 to tax steel and aluminum, and he is now looking to use it to impose tariffs of more than 20% on foreign cars.

Between the lines: Grassley, a farmer himself, is among farm country’s staunchest congressional advocates. The Chinese and other countries have targeted American farmers with penalties in retaliation for Trump’s tariffs.

  • Grassley only has two years left to chair Finance (this will be his second round in the position), so he will need to quickly cement his legacy.
  • One bill to watch is Republican Ohio Sen. Rob Portman’s 232 reform, co-sponsored by Sen. Joni Ernst (R-Iowa).

Defying Trump will never be easy for Republicans, especially as Trump will likely say any congressional push to limit his trade agenda favors the Chinese over Americans.

  • But Grassley will likely fire back with his own populist defense of American farmers.

The bottom line: While the administration has eased some Republican members’ concerns by reaching an updated trade deal with Mexico and China, many farm-state members say they still worry about how the rest of Trump’s trade disputes will play out.

  • “The interest in solving this problem is increasing,” said Sen. Jerry Moran (R-Kan.).
  • Having Grassley chair Senate Finance is “beneficial,” he added, since his constituents are “significantly challenged by lack of trade with China.”

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Pelosi casts doubt on passage of Trump’s new NAFTA without changes

House Democratic Leader Nancy Pelosi cast doubt Thursday on the likelihood that the new North American trade pact could win congressional approval without changes to bolster its labor and environmental protections.


President Donald Trump’s top trade negotiator, Robert Lighthizer, met with Pelosi for just over 30 minutes Thursday to discuss the new agreement, which will need Democratic support to give Trump a chance to sign it into law. The pact is already expected to face a fiery debate as some Democrats are already coming out in opposition to its labor and environmental provisions.

“While there are positive things in this proposed trade agreement, it is just a list without real enforcement of the labor and environmental protections,” Pelosi, who is expected to become House speaker in the next Congress, said in a statement after the meeting.

The Pelosi-Lighthizer session comes as Trump has stepped up his pressure to get the new agreement turned into law, telling reporters on Saturday that he would formally notify Mexico and Canada of his intention to withdraw from the existing North American Free Trade Agreement in six months. There is debate as to whether Trump has the legal authority to take such a step, but the move could force lawmakers to act on the new deal, which Trump is calling the U.S.-Mexico-Canada Agreement, or USMCA.

A spokesperson for Pelosi said it was “disappointing but not surprising” that Trump would try to force Congress’ hand “instead of working constructively with Congress to improve his proposed agreement to actually protect and strengthen American workers.”

U.S. Trade Representative Lighthizer declined to offer details following the meeting. He has previously indicated that the administration could make certain changes to the agreement’s text through implementing legislation that would address lawmakers’ concerns and win their support.

“I’ve been in discussions with a variety of Democratic leaders on those points and they’ll be very much involved in the process moving forward and will have an influence, a strong influence,” Lighthizer told reporters at the USMCA signing ceremony last week. “I want them not only to vote for it, I want them to be happy with the agreement.”

Lawmakers are also waiting “for Mexico to pass its promised law on the wages and working conditions of Mexican workers competing with American workers,” Pelosi said in the statement.

It remains far from certain that the agreement in its current form could pass both chambers. House Republicans have also criticized the deal for its inclusion of new provisions that aim to prevent discrimination on the basis of sex.

If the agreement remains on track, it will go to Congress next year for a simple up or down vote, with no amendments allowed under the fast-track law governing trade deals.

But House Democrats could also forgo fast-track rules to force changes to the deal. In 2008, House Democrats led by Pelosi voted to suspend the fast-track timeline on the U.S. trade deal with Colombia over lingering concerns about labor standards and violence in the South American country.

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Trump’s new NAFTA faces skeptics in now- Democrat-led House

WASHINGTON (AP) — President Donald Trump spent more than a year browbeating the leaders of Canada and Mexico into agreeing to a rewrite of North American trade rules. And on Friday, leaders of those two nations are set to sign the pact at the Group of 20 summit in Buenos Aires, Argentina.


Now, Trump faces what could prove a more formidable foe: His own Congress.

Emboldened by their takeover of the House starting next year, many Democrats say they want the new agreement to strengthen its protections for American workers from low-wage Mexican competition. Yet any such changes could raise new objections from Republican free traders who want to limit the ways the pact could restrict corporate practices in North America.

What Trump had hailed as a triumph for his administration — a newly named U.S.-Mexico-Canada Agreement to replace the 24-year-old North American Free Trade Agreement, which he’d long condemned as a job-killer for Americans — now faces a hazier future.

“It’s going to be a very tough sell,” said Democratic Rep. Bill Pascrell of New Jersey, top Democrat on the House subcommittee that oversees trade issues.

Leaders of the three countries agreed to the USMCA just hours before a U.S.-imposed Sept. 30 deadline. Yet the legislatures of the three countries must still ratify it. Many trade analysts say the new NAFTA isn’t very different from the old one despite Trump’s claim that it would “transform North America back into a manufacturing powerhouse.”

“It’s really the original NAFTA,” said Mickey Kantor, a partner at the law firm of Mayer Brown and U.S. trade representative in the Clinton administration.

For years, it was the Democrats who complained about NAFTA, which tore down most trade barriers between the U.S., Canada and Mexico. They argued that it encouraged U.S. companies to close factories, lay off American workers and move to Mexico to capitalize on cheap labor. By contrast, pro-business Republicans defended the deal, which they said encouraged an explosion in trade among the three North American countries that benefited all three.

But Trump campaigned as a different kind of Republican. He called NAFTA a “disaster” and dispatched U.S. Trade Rep. Robert Lighthizer to negotiate a new version, threatening to abandon the regional trade bloc entirely if he couldn’t get what he wanted.

Lighthizer worked to win Democratic support. And the USMCA includes provisions meant to address criticisms of the deal it replaces. For example, it requires that 40 percent of cars eventually be made countries that pay autoworkers at least $16 an hour — that is, in the United States and Canada and not in Mexico — to qualify for duty-free treatment. It also requires Mexico to pursue reforms of labor law to encourage independent unions that will bargain for higher wages and better working conditions for Mexicans.

And when the NAFTA replacement was announced, Senate Democratic leader Chuck Schumer of New York said that Trump “deserves praise for taking large steps to improve” on NAFTA.

John Murphy, senior vice president for international policy at the U.S. Chamber of Commerce, which supports the new trade deal, argued that it includes features that were intended to address Democratic concerns about how American workers would be affected.

“The possibility of building a bipartisan coalition for this agreement is there,” he said.

But with Democrats in charge of the House and exerting more influence in Congress, a coalition might be harder to assemble.

“This deal hasn’t met the mark,” said Celeste Drake, trade policy specialist at the AFL-CIO. “We’re not really done here.”

Drake and other critics say the requirement for labor reforms in Mexico isn’t enforceable and needs to be given more teeth. And they oppose a provision that gives manufacturers of biologics — ultra-expensive drugs produced in living cells — 10 years of protection from generic competition. Without competition, critics say, pharmaceutical companies could drive up prices and make health care even costlier for Americans.

“NAFTA 2.0 is also stuffed with handouts that will let big drug companies lock in the high prices they charge for many drugs,” Democratic Sen. Elizabeth Warren of Massachusetts said in a speech Thursday announcing her opposition to USMCA. “The new rules will make it harder to bring down drug prices for seniors and anyone else who needs access to life-saving medicine.”

U.S. trade rules are supposed to force Congress to give trade agreements an up-or-down vote — no nitpicking allowed. But there are ways to bypass those restrictions. Congress could, for example, pressure the Trump administration into negotiating a so-called side letter with Mexico to toughen protections for union organizers.

Robert Martinez Jr., president of the International Association of Machinists and Aerospace Workers, for example, called Thursday for new language to ensure that any Mexican labor reforms “will be effectively enforced.” He also wants provisions in the pact that would discourage the outsourcing of U.S. jobs to Mexico to include not only automakers but also such industries as textiles, electronics and call centers.

President Bill Clinton negotiated such a side letter to win congressional approval for the original NAFTA, which was largely negotiated by his Republican predecessor, President George H.W. Bush.

Republicans are sounding objections, too. Two weeks ago, 46 Republican lawmakers sent a letter to Trump opposing a USMCA provision, included at Canada’s insistence, that requires the three countries to protect LGBT employees from discrimination in the workplace.

The old NAFTA remains in place until USMCA takes effect. But Trump could tighten the pressure on Congress by threatening to withdraw from NAFTA if lawmakers balk at the new version. That “New NAFTA or No NAFTA” approach would disrupt the operations of companies that have built regional supply chains on the assumption that goods can cross borders within the trade bloc duty-free. It could also rattle financial markets.

Philip Levy, senior fellow at the Chicago Council on Global Affairs and a trade official in President George W. Bush’s White House, said it might actually work to Trump’s benefit if Democrats kill the deal or leave it in limbo.

“President Trump has seriously overhyped this agreement,” Levy said. “It won’t deliver” the job gains he’s promised.

“If you kill it, you leave him with the myth: ’I would have delivered all these wonderful things if only those swampland Democrats hadn’t blocked it,” Levy said.

There is precedent for Democratic obstruction of trade agreements: When Democrats last controlled the House, for instance, Speaker Nancy Pelosi managed to delay for years a U.S. trade agreement with Colombia, a priority of President George W. Bush.

What’s more, Levy said, Democrats may well be reluctant to hand Trump a victory a year before the 2020 presidential election — and lose an issue that “has been a rallying cry for them for more than 20 years.”

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Donald Trump was right when he said that the North American Free Trade Agreement (NAFTA) has been a disaster for the United States and promised to renegotiate it when he became president. However, the renegotiated NAFTA-2 is worse than the original NAFTA and should be rejected.


On December 1, NAFTA-2 was signed by President Trump, Prime Minister Justin Trudeau of Canada, and Mexican President Enrique Peña Nietos. This started the process of approval by the legislatures of each country.

Our movement for trade that puts people and planet first now has two synergistic opportunities: We can stop NAFTA II and replace corporate trade with a new model that raises working conditions and protects the environment.

Stopping NAFTA-2

When NAFTA became law on January 1, 1994, it began a new era of trade – written by and for transnational corporations at the expense of people and planet. President George H.W. Bush failed twice to pass NAFTA. During Bush’s re-election campaign, independent Ross Perot described NAFTA as the “giant sucking sound” that would undermine the US economy.

President Clinton was able to get it through Congress. The Los Angeles Times described that vote as “a painfully divided House of Representatives” voting a 234-200 for NAFTA. A majority of Democrats 156-102 opposed NAFTA. During the debate, protesters were ejected when they showered fake $50 bills that said “trading pork for poison” from the visitors gallery.

In the 2016 election, President Trump showed he understood what the United States experienced — NAFTA was bad for the people undermining manufacturing and agriculture. People want it repealed. Unlike Hillary Clinton, Trump had his finger on the pulse of the population.

NAFTA-2 is another trade agreement designed for corporate profit. Trump trade fails to provide enforceable protections for workers or the environment. In this time of climate crisis, it does not mention climate change. It fails to protect the food supply and will result in increased cost of medicines.

Citizen’s Trade Campaign writes, there are positive labor standards “but only if currently absent enforcement mechanisms are added.” As the Labor Advisory Committee states, “Unenforced rules are not worth the paper they are written on.”

The Sierra Club reports NAFTA-2 takes a significant step backward from environmental protections included in the last four trade deals by failing to reinforce a standard set of seven Multilateral Environmental Agreements that protect everything from wetlands to sea turtles.

NAFTA-2 allows intensely-polluting oil and gas corporations involved in offshore drilling, fracking, oil and gas pipelines, refineries, or other polluting activities to challenge environmental protections in rigged corporate trade tribunals. Trump Trade preserves a NAFTA rule that prevents the US government from determining whether gas exports to Mexico are in the public interest. This creates an automatic gas export guarantee, which will increase fracking, expand cross-border gas pipelines, and increase dependency on Mexican climate-polluting gas.

Food and Water Watch summarizes: “The energy provisions will encourage more pipelines and exports of natural gas and oil that would further expand fracking in the United States and Mexico. The text also provides new avenues for polluters to challenge and try and roll back proposed environmental safeguards, cementing Trump’s pro-polluter agenda in the trade deal.”

NAFTA-2 undermines food safety and health by making it more difficult to regulate and inspect foods. It limits inspections and allows food that fails to meet US safety standards to be imported. NAFTA-2 serves Monsanto and other giant agro-chemical corporations by allowing unregulated GMOs, rolling back Mexico’s regulation of GMOs, and letting chemical giants like Monsanto and Dow keep data on the risks of their pesticides secret for 10 years. NAFTA-2 is designed for agribusiness, not family farmers and consumers.

NAFTA-2 increases the cost of pharmaceutical drugs through intellectual property protections that go “significantly beyond” NAFTA. Trump’s NAFTA-2 gives pharmaceutical companies a minimum 10 years of market exclusivity for biologic drugs and protects US-based drug companies from generic competition, driving up the price of medicine at home and abroad.

All the ingredients that led to a mass movement of movements that stopped the Trans-Pacific Partnership  exist to stop NAFTA-2. Citizens Trade Campaign sent a letter signed by 1,043 organizations to Congress outlining civil society’s shared criteria for a NAFTA replacement. The requirements outlined in this letter have not been met.

Just as it became impossible across the political spectrum to support the TPP, we can make it impossible to support NAFTA-2. Democrats are signaling NAFTA-2 is not going to pass in its present form. After Robert Lighthizer met with Democratic Leader Nancy Pelosi last week, she described NAFTA-2 as “just a list without real enforcement of the labor and environmental protections,” that would be unlikely to pass in its present form. We can stop NAFTA-2.

Defeat of NAFTA-2 Creates the Opportunity to Transform Trade

The defeat of NAFTA-2 will show that corporate trade will no longer be approved by Congress.  Trade must be transformed to uplift workers, reduce inequality, confront climate change and improve the quality of our food and healthcare. The defeat NAFTA-2 opens the space to make transforming trade a major issue in the 2020 presidential campaigns.

President Trump has signaled that he will withdraw from NAFTA to pressure Congress to ratify NAFTA-2. Trump’s threat to withdraw from NAFTA should not be feared but embraced. It will create an opportunity for trade transformation.

A smart presidential campaign will use the defeat of NAFTA-2 as an opportunity to begin a new era of trade transformed for the public good, serving the many, not the few. Politicians running for president in 2020 can put forward a vision of trade that the people will support.

Already, Senator Elizabeth Warren (MA) has taken initial steps in this direction. In a speech to American University, Warren said she opposed Trump’s NAFTA-2 agreement, challenged the bipartisan embrace of “free” trade, and called for starting “our defense of democracy by fixing” corporate trade. In discussing trade she said, “Wow. Did Washington get that one wrong.”  She described trade as delivering “one punch in the gut after another to workers…” She urged, “We need a new approach to trade, and it should begin with a simple principle: our policies should not prioritize corporate profits over American paychecks.” This is a start, if she adds the environment, climate change, healthcare, food safety, sovereignty and Internet freedom, she will put forward a vision of smart trade that will bring millions to support her.

Warren is not alone, Senator Sherrod Brown (OH), who easily won re-election in Ohio and is considering a presidential run, has been a longtime advocate for trade that lifts up workers and challenged agreements that failed to do so. Brown sent a letter to the president eight days after the 2016 election urging Trump to keep his trade promises. Brown voted against NAFTA in one of his first acts as a member of Congress in 1993 and wrote a book entitled “Myths of Free Trade: Why American Trade Policy Has Failed.”

Transforming trade, by rejecting corporate trade, creates an opportunity for candidates to turn a negative issue into a positive one. The movement needs to demand candidates put forward a new vision for 21st century trade.

A Vision for Trade for People and Planet

We must put forward the vision for trade we want to see as part of the campaign to stop NAFTA-2. Trade in the 21st century needs to confront multiple crisis issues made worse by trade designed for corporate wealth. Transformed trade needs to focus on the public interest.

Pubic interest includes shrinking inequality within the United States and between nations. It means workers having a livable wage, encouraging worker-ownership of businesses so they grow their wealth not just their incomes. Trade should strengthen the rights of workers to organize, create unions and adhere to International Labor Organization standards.

Trade should aid in preventing transnational corporations and wealthy individuals from avoiding taxes. Trade should end tax havens and require transparency, end banking abroad or locating corporate charters offshore to ensure wealthy individuals and corporations pay their taxes. Countries can negotiate a global tax collected to solve global problems like poverty, homelessness, lack of healthcare and environmental degradation.

There are numerous environmental crises that trade needs to address. Three reports, the dire October 2018 IPCC report, warning we have 12 years to transform the energy economy to prevent climate catastrophe, the November 23, 2018 4th National Climate Assessment, which warned of the serious impacts of the climate crisis and the Global Carbon Project which reported carbon emissions are at record highs, show climate change must be central to trade policies.

International trade needs to be re-formulated to protect the labor, human rights, economy, environment and domestic industry of partner and recipient nations so local industry and agriculture has the advantage over foreign corporate domination. Trade needs to guarantee people their right to public ownership and control of their own resources. Trade agreements must protect the rights of nations to establish stricter standards for health, safety, human rights and environmental protections.

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Trump to notify Congress in ‘near future’ he will terminate NAFTA and replace it with remarkably similar NAFTA ‘deal’

US. President Donald Trump said on Saturday he will give formal notice to the U.S. Congress in the near future to terminate the North American Free Trade Agreement (NAFTA), giving six months for lawmakers to approve a new trade deal signed on Friday.


“I will be formally terminating NAFTA shortly,” Trump told reporters aboard Air Force One on his way home from Argentina.

“Just so you understand, when I do that – if for any reason we’re unable to make a deal because of Congress then Congress will have a choice” of the new deal or returning to trade rules from before 1994 when NAFTA took effect, he said.

Trump told reporters the trade rules before NAFTA “work very well.” NAFTA allows any country to formally withdraw with six months notice.

Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto signed a new trade agreement on Friday known as the United States-Mexico-Canada Agreement (USMCA).

Trump’s decision to set in motion a possible end to largely free trade in North America comes amid some skepticism from Democrats about the new trade deal.

The U.S. landscape will shift significantly in January when Democrats take control of the House of Representatives, after winning mid-term elections in November.

Presumptive incoming Speaker of the House Nancy Pelosi described the deal as a “work in progress” that lacks worker and environment protections.

“This is not something where we have a piece of paper we can say yes or no to,” she said at a news conference on Friday, noting that Mexico had yet to pass a law on wages and working conditions.

Other Democrats, backed by unions that oppose the pact, have called for stronger enforcement provisions for new labor and environmental standards, arguing that USMCA’s state-to-state dispute settlement mechanism is too weak.

A 2016 congressional research report said there is a debate over whether a president can withdraw from a trade deal without the consent of Congress, and there is no historical precedent for the unilateral withdrawal from an free trade deal by a president that had been approved by Congress.

The issue could ultimately be decided by the U.S. courts.

The U.S. Chamber of Commerce said last year that exiting NAFTA without a new deal could devastate American agriculture, cost hundreds of thousands of jobs and “be an economic, political and national-security disaster.”

The leaders of the three countries agreed on a deal in principle to replace NAFTA, which governs more than $1.2 trillion of mutual trade, after acrimonious negotiations concluded on Sept. 30.

Trump had vowed to revamp NAFTA during his 2016 presidential election campaign. He threatened to tear it up and withdraw the United States completely at times during the negotiation, which would have left trade between the three neighbors in disarray.

The three were still bickering over the finer points of the deal just hours before officials were due to sit down and sign it.

Legislators in Canada and Mexico must still approve the pact.

Trump had forced Canada and Mexico to renegotiate the 24-year-old agreement because he said it encouraged U.S. companies to move jobs to low-wage Mexico.

U.S. objections to Canada’s protected internal market for dairy products was a major challenge facing negotiators during the talks, and Trump repeatedly demanded concessions and accused Canada of hurting U.S. farmers.

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