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RCO





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PostPosted: Thu Apr 27, 2017 6:58 am    Post subject: Trump no NAFTA withdrawal for now Reply with quote

Trump assures PM: No NAFTA withdrawal for now


THE CANADIAN PRESS

First posted: Wednesday, April 26, 2017 01:49 PM EDT | Updated: Wednesday, April 26, 2017 11:39 PM EDT



WASHINGTON — U.S. President Donald Trump swore off plans to cancel the North American Free Trade Agreement on Wednesday, after a day rife with speculation that he could be on the verge of threatening to obliterate the seminal trade deal.

The president made the announcement at the end of a dramatic day following an evening phone chat Wednesday with Prime Minister Justin Trudeau, followed by another call with Mexican President Enrique Pena Nieto.

Trump sounded satisfied that his peers had agreed to negotiate swiftly. This has been a top concern of Trump’s administration, which has expressed frustration over the pace.

Trump’s key campaign promise to renegotiate NAFTA is up against the clock: U.S. Congress has yet to sign off on negotiations, and there might be less than a year to get a deal before the Mexican election.

”Both conversations were pleasant and productive,” said a late-night statement from the White House.

”President Trump agreed not to terminate NAFTA at this time and the leaders agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the NAFTA deal to the benefit of all three countries.”

Trump said it was his privilege to update NAFTA through renegotiation. He called it an honour to deal with both Pena Nieto and Trudeau, and said the end result will make all three countries stronger and better.

That statement will send waves of relief rippling through Ottawa and Mexico City.

Throughout the day, the White House had been telling U.S. media it was mulling a notice of withdrawal from NAFTA. It was seen as a dose of shock treatment for Congress, Canada, and Mexico to get cracking under the threat the deal might be cancelled.

Markets appeared jolted by the sudden drama. The Canadian dollar lost more than a third of a cent Wednesday and the Mexican peso got hit harder: it was down more than 1.5 per cent on the day.

Various media said Trump was considering detonating the trade equivalent of a nuclear option — an executive order to withdraw from the trade agreement, which would instill fear in members of Congress, industry and Canadian and Mexican trade negotiators.

The administration had been complaining that American lawmakers were dragging their feet. On Capitol Hill, lawmakers have not only delayed confirmation of Trump’s trade nominee but also withheld approval of the formal notice to kick off negotiations.

Trump wants movement.

The White House let it be known earlier in the day, through the Washington Post, Politico, and CNN, that Trump was considering an executive order threatening withdrawal, and the New York Times reported late Wednesday that he was actually leaning toward issuing that order.

Such a move would have been dramatic, but not necessarily fatal to NAFTA.

A veteran of Canada-U.S. free trade said there are multiple layers between an announcement and an actual withdrawal. He asked: Even if Trump announced a possible withdrawal, would he actually he follow through? And if he followed through, would Congress undo tariffs, and other things in NAFTA’s implementing legislation?

One thing’s certain, he said: the move would scare people.

”It would be a nothing. But it would be inflammatory,” said Jon Johnson, a negotiator in the original Canada-U.S. trade agreement, a government adviser on NAFTA and now a C.D. Howe Institute analyst.

”I suspect many in the press would freak. I would.”

He pointed out that NAFTA does not have an automatic-exit clause.

Its only reference to withdrawal is a single 34-word sentence, Article 2205, which says: A party may withdraw after providing six months’ written notice, which means that any president declaring a pullout would simply be allowed to do it six months later.

What a withdrawal threat could do is frighten multiple actors, he said.

There were certainly jitters in Congress. Pro-NAFTA senators urged Trump to be careful. The Republican majority whip, Sen. John Cornyn, warned: ”I think we’d better be careful about unintended consequences.” Sen. John McCain told CNN, of a NAFTA withdrawal: “It will devastate the economy in my state ... I hope he doesn’t do that.”

One trade expert said he viewed this as a negotiating tactic — a threat to Congress.

”I think he is bluffing,” Canada-U.S. trade lawyer Mark Warner said earlier Wednesday.

”I think by threatening a nuclear option he is hoping to get Congress to speed up . . . (and) stop getting in way. If there is an executive order, it’s probably more likely to be weaker than his rhetoric.”

The White House had expressed frustration at lawmakers’ failure to share its sense of urgency on NAFTA.

The clock is ticking, in part because of the Mexican election. The Mexican government says it can’t conclude a NAFTA deal after the first quarter of next year, with an election in 15 months and the populist left on the move there.

Trump’s point man on the negotiation, Commerce Secretary Wilbur Ross, has acknowledged that it gets harder if talks linger too much into next year. Which means the next few months might be the only window to renegotiate NAFTA — a key Trump campaign promise.

By law, the U.S. Congress must be involved at multiple steps: in approving a formal notice to renegotiate, in developing the negotiating positions, and then in voting to ratify a deal.

”It’s been frustratingly slow,” Ross said earlier this month, of Congress. ”They’ve been very, very slow on completing the hearings and voting on our new U.S. trade representative Bob Lighthizer. That’s been not helpful.”

http://www.torontosun.com/2017.....ta-pullout
Toronto Centre





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PostPosted: Thu Apr 27, 2017 10:54 am    Post subject: Reply with quote

Quote:
Trump assures PM: No NAFTA withdrawal for now

Trump must be listening to the smart men in the room.

The US would get hammered if he implemented a withdrawal .
cosmostein





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PostPosted: Thu Apr 27, 2017 12:09 pm    Post subject: Reply with quote

We would almost be better served by three separate agreements than one singular catch all.
Toronto Centre





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PostPosted: Thu Apr 27, 2017 3:54 pm    Post subject: Reply with quote

Cosmo, how would it be better? Honest question as I cannot think how three separate ones are better than one, especially if one is more favourable and the other one finds out.
cosmostein





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PostPosted: Thu Apr 27, 2017 4:27 pm    Post subject: Reply with quote

Toronto Centre wrote:
Cosmo, how would it be better? Honest question as I cannot think how three separate ones are better than one, especially if one is more favourable and the other one finds out.


Largely because our economies have evolved significantly since 1993;
When this whole thing began total trade between Canada and Mexico was around 20-30b both ways, now we do around 600b in trade a year.

What we import and export to and from Mexico in many cases varies from what we import and export from the United States and having an agreement that focus more strongly on the actual points of trade negotiated one on one rather than being painted with a singular document IMO would offer some advantages.

The United States clearly has different issues with Mexico than Canada;
Creating a single more restrictive NAFTA where we are all tied to whatever restrictions the United States wants to place on Mexico doesn't seem advantageous.

The basis of trade between Canada and the US is also different than that of Mexico and the US or between us and Mexico.

In January 2017;
https://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm

40% of all oil imported to the US was from Canada;
The Keystone XL approval potentially increases that down the line;

They want our oil, we want access to their market.

I am firm believer that a deal based on the above will go smoother than whatever airing of the grievances will occur between the US and Mexico during NAFTA negotiations that we will get stuck with.
Toronto Centre





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PostPosted: Thu Apr 27, 2017 4:56 pm    Post subject: Reply with quote

Thank you. Very interesting post.
I have some food for thought now.

Thank you
Bugs





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PostPosted: Thu Apr 27, 2017 6:22 pm    Post subject: Reply with quote

Toronto Centre wrote:
Quote:
Trump assures PM: No NAFTA withdrawal for now

The US would get hammered if he implemented a withdrawal .


I'd be fascinated to know how the US would get 'hammered' if it withdrew from NAFTA.

A few facts: We may be the US's biggest trade partner, but 75% of our exports go to the USA, whereas we absorb only 12% of their total exports. In 2016, we came out of that with a favourable balance of trade of about C$32+ billion.

Our total trade with the USA, in Canadian dollars, was $752 billion. Our next biggest trading partners are the EU -- at $94 billion -- and China -- at $60 billion. Next comes Mexico, at $28 billion.

I don't think Cosmo's numbers are right. The $600 billion is the total Canada-US trade, expressed in US dollars.

Our negative balance of trade with the EU is $10.5 billion, with China it's $15.2 billion, and with Mexico, it's 10 billion.

https://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_Canada

Put differently, if we didn't have the surplus we generate with our trade with the US, we couldn't trade so extensively with Europe, China, and Mexico.

Maybe you're listening to the stupid people in the room?

So, where's the hammering going to come from?
Toronto Centre





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PostPosted: Thu Apr 27, 2017 7:13 pm    Post subject: Reply with quote

Ill make it easy for you.

24% tax on softwood lumber would stop houses being built. Michigan..Illinois...the Dakotas....all would suffer .
Go ask them, they dont want Trump to do this.

The US is 0-5 in the softwood lumber deal. 0-6 would be just plain stupid. But then again...Trump.
Bugs





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PostPosted: Fri Apr 28, 2017 12:00 pm    Post subject: Reply with quote

It may surprise you, but a house is more than lumber.

Michigan and Illinois are losing population at the moment. Houses in Detroit are being abandoned.

The expensive stuff is the electrical and plumbing. A single family house can use about 15,000 board feet of lumber, and there have been estimates that the tariff will increase the costs of a house by about $3600. There are lower estimates.

Quote:
Trump’s Canadian lumber tariff could cost US homebuyers about $1,200 per house

The NAHB estimates the new duty will increase the price of an average single-family home by $1,236.
Just the anticipation of it has pushed lumber prices higher by about 22 percent since the start of this year.
The Trump administration argues that government subsidies for Canadian lumber are unfair.
http://www.cnbc.com/2017/04/25.....-1200.html


It looks like the cost of the tafiffs is being built into the price already. I dunno, but would an additional $3600 of cost stop a lot of people from buying homes -- or building them, either? But carry on with your posturing.
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