Sunday, March 11, 2018

25 Years of NAFTA - Good or bad?





"Those who wanted an otiose President on trade like Obama was, are in for a shock. Be it tariffs, negotiations, or whatever, Donald Trump will not rest until our trade deficit is under control."




Okay - here is the question of the hour. Trust me - I don't know the answer. That is for the "wizards of smart" right now. In the 25 years since NAFTA has been signed, has it been good or not so good for the United States? Where are we right now? Is the President right that NAFTA either needs to be scrapped or re-negotiated? Was Ross Perot right when he campaigned against it? Is NAFTA really our trade deficit problem (along with China), or are they just "boogy men"?

So - is it good? Let's look at the surface evidence first. Mexico. Anyone want to live there right now? Mexico is a mess. Even with the fruits that NAFTA provided. It is the land of the lawless right now, and just about every reputable travel agency is putting out the red flag about traveling there. Why? It is about three inches away from being an all out war zone. Drugs, drugs, and more drugs.

Also, if the economy in Mexico is so good right now due to NAFTA, why are we still getting "fence hoppers" coming across the southern border? We don't have people from this country trying to sneak into Mexico. What gives? 

I remember the debate on NAFTA. The true believers said it would NOT be a zero sum game. Everyone would benefit. We would still have borders, but North America would operate more like the EU. Really? Well here is the bottom line. Right now, we don't know how much of our trade issue is due to NAFTA, how much is due to the unfair trade policies of China, or just the US being "out played" in the market place. What ever it is Houston - we have a big, big problem. To run 1/2 trillion (or more) annual trade deficits, is not good for man nor beast in this country.

Is there a winner so far with the current NAFTA agreement? Canada. Land is good in the north country. Even with an avowed socialist running the place, they seem to be doing fine. Of course, they spend pennies on the dollar for their defense. They just rely on us. Your welcome, Canadians. Would Canada want to renegotiate NAFTA? Probably not. But who cares. For an agreement which was not supposed to be zero sum, it sure seems like there have been winners and losers.

Our CEO of a President will go over this agreement with a fine tooth comb. Whatever is good, he will want to keep. Where our negotiators "gave away the store", he will want to fix it. For him, running huge trade deficits is a non-starter. He WILL fix the NAFTA issue, and he will try and do something with the China issue.

Those who wanted an otiose President on trade like Obama was, they are in for a shock. Be it tariffs, negotiations, or whatever, Donald Trump will not rest until our trade deficit is under control. Why? We can't make America great again while running half trillion dollar deficits. As they say in Vegas, "it just ain't in the cards".  

6 comments:

  1. The United States could make almost everything it needs. But some countries can make products just as well for a lower price. It makes more sense to pay less for these goods. The savings are then invested in the industries America does best.
    We're at full employment, birth rate is not high enough to cause this to fall. In fact, we need immigrants to fill many jobs.
    Companies are rife with cash and expanding (when appropriate).
    It is a global economy and those that can take advantage of either vast resources, high quality or cheap labor can and should dominate the markets.
    The 20th Century was the American Century, now the 21st will be the Chinese Century.
    China's biggest trade surpluses were recorded with Hong Kong, the US, the Netherlands, India, the UK, Vietnam, Singapore and Indonesia.
    China recorded trade deficits with Taiwan, South Korea, Australia, Germany, Brazil and South Africa.

    You should be more concerned that Republican controlled MN legislature is going along with Dayton's proposals to safeguard our school children. That's scary.

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  2. And you should be concerned about 6000 days of fighting in Afghanistan.
    If the U.S. objective is freedom there rather than security here, or if the theory is that the latter somehow depends on the former, the administration should clearly say so, and defend those propositions, or liquidate this undertaking that has, so far, cost about $1 trillion and 2,200 American lives

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  3. Free trade is the way the world works now, and free trade agreements like NAFTA are carefully balanced to benefit trading partners. There are complex, multiple advantages to these agreements and plenty of unforeseen consequences of moving away from free trade.
    45 doesn't understand these ageements and will be responsible for the loss of millions of American jobs while benefiting our economic competitors at the expense of our businesses.

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  4. Harley Davidson, facing declining sales and challenges from existing tariffs, is consolidating factories and eliminating jobs—with the company saying that 45’s recently announced tariffs would increase costs and impact sales.

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    Replies
    1. Who cares, I hold them right up there with the NRA as entities worthy of my derision.

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