Mexico ready to quit NAFTA if US talks fail

[Right_in_Virginia]

Mexico ready to quit NAFTA if US talks fail
Yahoo News, Jan 24, 2017, Jean Luis Arce

Mexico City (AFP) - Mexico drew red lines on Tuesday ahead of negotiations with US President Donald Trump's administration, warning it could quit the talks and a major trade pact if the discussions hit a wall.

During the US election campaign, Trump vowed to make Mexico pay for a massive border wall and threatened to finance it by tapping into the $25 billion in remittances that Mexican migrants sent back home last year.

"There are very clear red lines that must be drawn from the start," Economy Minister Ildefonso Guajardo told the Televisa network as he prepares to meet with US officials in Washington on Wednesday and Thursday.

Asked whether the Mexican delegation would walk away from the negotiating table if the wall and remittances are an issue, Guajardo said: "Absolutely."

Guajardo and Foreign Minister Luis Videgaray will hold the face-to-face talks with the new US administration ahead of a meeting between Trump and President Enrique Pena Nieto on January 31.

 NAFTA threat -

In addition to the wall, Trump wants to renegotiate the North American Free Trade Agreement (NAFTA) with Mexico and Canada, warning last week that he would abandon the pact unless the United States gets "a fair deal."

The Mexican government has responded that it is willing to "modernize" the pact, which came into force in 1994 and represents $531 billion in annual bilateral trade between Mexico and the United States.

Some 80 percent of Mexico's exports go to the United States, a clear indicator of the country's dependence on the US market for its economic wellbeing.


Read more:  https://www.yahoo.com/news/mexico-says-ready-quit-talks-us-necessary-174502231.html

[Jazzhead]

Has Trump or any of his advisors ever explained why NAFTA is not a "fair deal" for us?

[skeeter]

Has Trump or any of his advisors ever explained why NAFTA is not a "fair deal" for us?

Maybe because we've consistently run about a $60 billion per year trade deficit with Mexico, to pick one major partner.

[kidd]

Mexico ... warning it could quit the talks and a major trade pact if the discussions hit a wall.

"hit a wall"

(snort)

[driftdiver]

Has Trump or any of his advisors ever explained why NAFTA is not a "fair deal" for us?

@Jazzhead
Tell you what, you give me $1000 and I'll give you $200.

Then I'll explain it.

[Jazzhead]

  Bloomberg:  Trump's wrong - NAFTA's been a good deal for the U.S and Mexico

Trump still got it wrong, though, when he said Nafta helped Mexico more than the U.S. He ignores the less quantifiable, hidden aspects of free trade that have helped the U.S. economy, such as an increase in higher-paying, export-related U.S. jobs, more competitive (and profitable) U.S. companies, and lower consumer prices at home.

Trump's is an old-fashioned mercantilist approach to trade that has populist appeal but that most economists long ago rejected. It says countries that export more than they import are winners, while countries that import more than they export are losers. In 2015, Mexico exported $316 billion worth of goods and services to the U.S., which sent back $267 billion worth. By Trump's arithmetic, the U.S. is the loser by $49 billion.

Mercantilism shades Trump's entire approach to trade. He loves to lambaste companies like Nabisco, Carrier and Ford Motor for moving production south of the border and cutting jobs in the U.S.  But while it's certainly true that Nafta resulted in job losses to Mexico, the number, about 600,000 over 20 years, is quite small when viewed against the U.S.'s monthly job churn.

Out of a workforce of 135 million people, about 4 million to 6 million leave their jobs voluntarily or forcibly every month. The jobs lost to Mexico over a 20-year period amount to less than 0.1 percent of that turnover. Some of those jobs would have been lost anyway, as manufacturers shift to automation whenever possible to cut costs and increase profits. 

By looking only at the trade deficit with Mexico, Trump also ignores other economic gains from Nafta. Exports to Mexico have risen tremendously -- they were only $42 billion in 1993. That increase has come in part from Mexicans' higher standard of living (because of Nafta). Today, exports to Mexico support six million U.S. jobs, many of which pay more than the blue-collar ones that were lost. Economist Gary Hufbauer of the pro-free-trade Peterson Institute says workers in export-related jobs are paid 10 percent to 15 percent more than workers in non-export jobs requiring the same skills.

Nafta has also helped make companies more competitive. When U.S. companies must compete against rivals from other countries, they have to find less expensive, more innovative ways to make quality goods, or else lose market share. American-made cars are a lot better now than before the Japanese invaded the U.S. auto market, for example.

When American-made goods contain components that were made less expensively in Mexico, the U.S. also can compete more aggressively on price with European and Asian rivals. The supply chains that move intermediate goods across the Mexican, Canadian and U.S. borders would never have happened were it not for Nafta. They are probably its biggest, if unheralded, success story.

[geronl]

Americans prepare to celebrate price increases!

[geronl]

Maybe because we've consistently run about a $60 billion per year trade deficit with Mexico, to pick one major partner.

I run a huge trade deficit with my local grocery store too, it's just so unfair.

[Jazzhead]

Americans prepare to celebrate price increases!

Bingo!   That's the cost of mercantilism - higher prices for consumers.   And that will most directly harm the poor. 

[Weird Tolkienish Figure]

Bingo!   That's the cost of mercantilism - higher prices for consumers.   And that will most directly harm the poor.

 

[mirraflake]

I run a huge trade deficit with my local grocery store too, it's just so unfair.

Most idiotic argument I have ever heard..and I know the globalist shill on radio who came up with it.

 The US economy is no different than your annual family income.. If you continue to spend more than you earn it will eventually come back to bite you.

$800 billion + and growing trade deficits per year are killing this country.

@geronl

[thackney]

If you continue to spend more than you earn it will eventually come back to bite you.

Equating exports as our only source of income is foolish.

[Weird Tolkienish Figure]

The US economy is no different than your annual family income.. If you continue to spend more than you earn it will eventually come back to bite you.

Not even close to accurate. There are many ways that the US economy is different than your annual family income. Biggest one is that the US government can print it's own money. Wouldn't it be nice to be able to print your own million dollar bills, mirraflake?


Here:


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


Lump of labor fallacy. Simply put there is not a fixed amount of work to do in the world. We have been offshoring for close to 50 years now and yet we still have an unemployment rate close to a record low. I understand there are arguments about participation rates and other metrics, but if trade were a zero-sum losing game, the US should still have an unemployment rate at well over 50%, with the country as a mess.


There is not a fixed amount of programs to right, things to invent, diseases to cure, services to perform etc. etc.

[mirraflake]

 We have been offshoring for close to 50 years now and yet we still have an unemployment rate close to a record low.

Yeah but what quality of jobs?  We went from High paying jobs to part time retail and people having to have 2-3 jobs to make ends meet. Some people do well many do not. US family net wealth has been dropping, house ownership record lows.

All those reverse mortgage commercials on TV is a indicator of our society  Poor kids  thought they would get some money from their parents as we enjoyed for most of our lives are going to be surprised to see the bank owns their parents home they thought was paid off.

I am in the finance biz.. I have seen what has happened to family income over the last 30 years..smaller and smaller amount of people doing well-the rest just struggling.I see every day. Business owners and a few key employees doing well rest of employees stagnat or dropping wages.

I could go on and on and give you stats myself If i had the time.

The American people know globalism  has destroyed the American middle class and is the reason Trump was elected


.....and you really think it's healthy when the US prints money?

@Weird Tolkienish Figure

[Weird Tolkienish Figure]

The American people know globalism  has destroyed the American middle class and is the reason Trump was elected

Not according to most polls:

65 percent of Americans said globalization is mostly good for the United States, while 34 percent said it is mostly bad.

https://www.washingtonpost.com/news/worldviews/wp/2016/09/07/poll-most-americans-say-globalization-is-a-positive-and-free-trade-improves-their-lives/?utm_term=.90ae093d5d33


Tariffs will just raise the price of good. The jobs will not come back because our higher wages will just encourage automation.


Were you one of the people who thought minimum wage would raise people's living standards?

[geronl]

$800 billion + and growing trade deficits per year are killing this country.

Not really, the national debt is what will kill the country

[thackney]

All those reverse mortgage commercials on TV is a indicator of our society 

Yes an indication of the overly large homes at price above what many people can really afford.

[geronl]

Equating exports as our only source of income is foolish.

In that regards we would be one of the top countries since we export more than all but one nation on Earth.

[geronl]

Lump of labor fallacy. Simply put there is not a fixed amount of work to do in the world.

There is not a fixed amount of programs to right, things to invent, diseases to cure, services to perform etc. etc.

 

[Oceander]

Most idiotic argument I have ever heard..and I know the globalist shill on radio who came up with it.

 The US economy is no different than your annual family income.. If you continue to spend more than you earn it will eventually come back to bite you.

$800 billion + and growing trade deficits per year are killing this country.

@geronl

What trade deficits are you referring to?   The traditional measure used basically fixates (I would say fetishizes) trade in tangible property - televisions, commodities, etc - but completely ignores services and investment capital flows.  For example, a lot of foreigners come to the US and pay a lot of money to attend US universities.   That is just as much a matter of international trade - trading educational services, exporting trained brains, if you will - but those billions don't make it into the traditional balance of trade measures.  In fact, the US runs a high trade surplus in education services. 

Focusing on the balance of trade in industrial goods is antediluvian and yet that is what Trump focuses on.  Get real and come into the 21st Century, and the trade deficit Trump whines about goes away. 

[mirraflake]

Not according to most polls:




https://www.washingtonpost.com/news/worldviews/wp/2016/09/07/poll-most-americans-say-globalization-is-a-positive-and-free-trade-improves-their-lives/?utm_term=.90ae093d5d33


Tariffs will just raise the price of good. The jobs will not come back because our higher wages will just encourage automation.


Were you one of the people who thought minimum wage would raise people's living standards?

LOl poll was done by Chicago Office for Global affairs which is a pro globalist outfit.. yeah real unbiased there.

Min wage should be minimum wage and not intended to be sole source of income though I do believe min wage should go up some around $10.00 to keep up with inflation. The min wage i earned at my first job in 1978 comes out today to be around 10.00 per hour today.

Half the country voting for Trump tell me your unbiased poll is crap.

@Weird Tolkienish Figure

[Weird Tolkienish Figure]

Half the country voting for Trump tell me your unbiased poll is crap.

A lot of people who voted for Trump were reluctant, like me, but just wanted to save the USSC.


I know I'll never be able to convince you because I'm a "globalist" supposedly, so just keep believing what you're believing.

[geronl]

Min wage should be minimum wage and not intended to be sole source of income

@Weird Tolkienish Figure

Interesting that having a job was not intended to be a sole source of income. What were the other sources of income that were intended? I'd really like another source of income instead of just working all the time.

[mirraflake]

Interesting that having a job was not intended to be a sole source of income. What were the other sources of income that were intended? I'd really like another source of income instead of just working all the time.

MIN wage jobs are intended for temporary, entry level positions not as family breadwinner jobs. Of course you know this and what I meant.

@geronl

[Weird Tolkienish Figure]

MIN wage jobs are intended for temporary, entry level positions not as family breadwinner jobs. Of course you know this and what I meant.

@geronl

Yeah and if you don't want one you have to earn a skill or trade that is valued and pays well.


Based on what I payed my plumber this past week there are still a multitude of ways to earn a good living without going to college.