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Explanation: Trump's "victory" (?) in the USMCA


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Back in October, President Trump reached a new deal with Canada and Mexico to create a new NAFTA. They changed the name, because if Trump is good at anything, it's marketing. He knew that people are really against NAFTA for destroying the working class in this country, so they rebranded it as the United States-Mexico-Canada Agreement (USMCA). That's really the same thing, but I digress. Let's break it down.

The weird part? The USMCA is basically NAFTA with five new provisions. Two are okay, one is good, and two are horrible provisions that were taken from the TPP proposal. This, coming from the guy who ran on attacking Hillary for her favoring of TPP. As he pretends to be for the working class, he does this. Anyway, let's talk about the changes.

  • Country-of-origin rules: Automobiles must have 75% of their parts manufactured in Mexico, the US, or Canada to qualify for zero tariffs, up from 62.5% under NAFTA. I'm calling this one a mediocre change. If you really wanted to bring back American manufacturing, you'd have to be more aggressive than this. This is a minor tweak to NAFTA, and doesn't get to the heart of what Trump claims he was gonna do. It's not a big deal, and in the end, the heart of it is still NAFTA.
  • Labor provisions: 40-45% of all automobile parts have to be made by workers who earn at least $16/hr by 2023. Mexico has also agreed to pass laws giving workers the right to union representation, extend labor protections to migrant workers, and protect women from discrimination. The countries can also sanction one another for labor violations. For me, this one is actually the other mediocre change, because this is already the case for the overwhelming majority of jobs in NAFTA. Really, it's another thing Trump can point to to claim that he's very pro-worker, even though the change in practice is pretty minimal.
  • US farmers get more access to the Canadian dairy market: Definitely a positive change! Very good for US industry, and if you're America's president, you should be a fierce advocate for US industry, not just the business owners, but the workers as well. With any actual step in the right direction for helping US industry, I'll take it, and I'll give anyone credit for it.
  • Intellectual property and digital trade: The deal extends the terms of copyright to 70 years beyond the life of the author, up from 50. It also extends the period that a pharmaceutical drug can be protected from generic competition. This may sound a bit confusing, but what it means in practice is a HUGE giveaway to Big Pharma. One of its impacts is that Canada has been shafted on the cost of prescription drugs. We get price-gouged for medication to hell and back in this country, and now, Trump made it to where Canadians feel that pain as well. This serves no purpose beyond being a giant giveaway to pharma companies, and that's that.
  • Preservation of the investor-state dispute settlement: This is an atrocious change, and it's the heart of what so many people objected to TPP over. It allows multinationals to sue the governments they operate under when those governments put new regulations into law. It both guts anti-pollution efforts and damages US sovereignty. Oil/gas and telecom industries are given some of the most power in this system. In other words, if a government is messing with your profits, just sue the government to get them to pay you back. These cases are judged by international tribunals in which the corporations get to choose the judges, so by definition, they give themselves the ability to put themselves above the law.

Some of these changes were positive changes. Some were faux positive, and codifying something that was already the case. The others are horrible. Most of all, though: everything else in the USMCA is literally the exact same as NAFTA. It's the exact same trade deal outside of these provisions.

Trump made it a habit of (correctly!) ripping our terrible trade deals on the campaign trail, but he certainly isn't bucking the establishment on that front, or any others, for that matter. So what does he do? He takes NAFTA, changes a few things up, and suddenly, it somehow goes from the worst deal in our history to the best. Meet the new boss, same as the old boss. Meet the new NAFTA, almost identical to the old NAFTA.

Edited by HawkbitAlpha
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