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Trump’s Tough Talk on NAFTA Suggests Pact’s Demise Is Imminent

21 points by TuringNYC 9y ago

TuringNYC 9y ago
I know when we hear about NAFTA we usually think of industrials and manufacturing. Curious if anyone has a good analysis of NAFTA and the (obvious) first-order benefits it presents to the information economy -- since the US is a large net positive on that front.
- saimiam 9y ago
  (Anecdata) A Canadian friend of mine is now a US citizen who immigrated to the States on a NAFTA related (T?) visa. Now that he's losing his eyesight, companies like Apple and governmental bodies like the Obama White House invited him to advise on disability issues. His presence is definitely a plus for the disabled in America even if you argue that a native born citizen could have achieved the same results.
- danmaz74 9y ago
  Yes, I expect that if Trump continues on his protectionist direction in some industries, there will be consequences in other ones. Why should the rest of the Western world allow Amazon, Google, Hollywood etc. to dominate their respective fields without tariffs or restrictions if the USA becomes protectionist where it suits Trump?
  - readittwice 9y ago
    The EU and its countries are actively trying to tax Facebook, Google, Apple, Amazon, etc. more than today for some time now. It's just not so easy. But that doesn't have anything to do with Trump, this started well before most people in Europe even knew him.
    - jacquesm 9y ago
      And rightly so.
    - mtrimpe 9y ago
      It's not so easy without upsetting established political conventions. If those change though it becomes a lot easier to do.
    - danmaz74 9y ago
      That's because those companies pay lower taxes than local companies. The real beef here isn't with the companies themselves, but with some smaller member states that steal the tax base of other bigger member states.
      - readittwice 9y ago
        You are right, that's what e.g. the verdict against Ireland/Apple was about. But this is only part of the story. The verdict in this case was that Ireland let Apple pay lower taxes compared to other local companies. Some other EU-countries want to tackle a different thing: Apple (just to give an example) not paying taxes on the profit they make in each country individually but only in Ireland (in the case of Apple) for all (EU-)countries combined.
igravious 9y ago
Whoops. Somebody should tell the Brits. http://www.telegraph.co.uk/news/2017/10/10/britain-could-join-nafta-trade-alliance-us-canada-mexico-post/ http://www.telegraph.co.uk/news/2017/10/10/britain-could-joi... “Britain could join trans-Atlantic trade alliance bigger than the EU if there is no deal on Brexit” (Article only _two_ days old at time of writing!)
- pjc50 9y ago
  Brexiteers have been pushing nonsense like this for ages, usually under the delusion that Britain and America would be equal partners. Meanwhile we're facing another Trump related trade dispute with Canada that affects the UK: http://www.bbc.co.uk/news/uk-northern-ireland-41592474 http://www.bbc.co.uk/news/uk-northern-ireland-41592474 What's not stated in all of this is that the collapse of a major employer plus other Brexit fallout plus the collapse of devolved government in NI could result in a resumption of terrorist violence.
  - igravious 9y ago
    I don't think there's any appetite for a return to violence. Besides – as you probably know – the former IRA's political arm, Sinn Féin, is in power north and south of the border.
blowski 9y ago
Trump’s negotiating tactics do genuinely seem quite clever, despite me not liking the man at all or supporting the aims of the negotiation. He seems to combine the “madman” theory with “good cop, bad cop” to produce a “crazy leader, sensible leader” tactic. It’s probably a very effective strategy, if all you’re interested in, is optimising the short-term, very narrow, very selfish interests of a part of the US population. It’s a strategy I’d like to try in a board game.
- jacquesm 9y ago
  Just like a bull in a china shop is able to effect a lot of change in a short time. Negotiations are supposedly ending in a net positive, I've yet to see one, either for the US or the rest of the world. The world is not a board game.
  - blowski 9y ago
    I totally agree with you, but I suspect it will end up in a net positive for Trump and his cronies, just not for the rest of the world. That said, it is fascinating to watch, even if terrifying at the same time.
- theyregreat 9y ago
  The crybully is similar but he rotates through all three phases of the Karpman Drama Triangle often in order to play hero. My hypothesis is many sociopathic leaders of different stripes use/d similar tactics to hit people’s emotions and bypass their rationality. It is what it is, and many people are seduced when times seem rough that someone has a panacea or a plan to make everything better. I wish people focused more on manipulating him into doing what actually needs to happen and less on useless demonizing or lionizing. Polarization is gonna kill more people by not tackling huge problems like locked-in climate change... the world needs CDR, solar shade or whatever scales as fast as possible, “moon-mission”-style. https://en.wikipedia.org/wiki/Karpman_drama_triangle https://en.wikipedia.org/wiki/Karpman_drama_triangle
  - mercer 9y ago
bryanlarsen 9y ago
Prediction: this is going to kill a lot of American jobs short term. It may or may not be good for America long-term, but in the short term it's a huge disruption, and in disruptions jobs get lost quickly and gained slowly. Example: right now, an American firm builds widgets in Mexico with Canadian resources and sells to all three countries. In the future, the American firm builds in America and sells only to Americans. A Cana-Mexican firm builds in Mexico with Canadian resources and sells to Cana-Mex. You can argue which is better for America & Cana-Mex. But there's no doubt that the transitional period will suck for all. In the transitional period the Cana-Mexican firm hasn't been founded yet, nor the American factory built, so the pre-demise scenario continues. But now prices double for everybody due to increased tariffs, non-tariff barriers and currency fluctuation. So sales drop through the floor or are lost to Chinese competitors. Lose-lose-lose.

21 points by TuringNYC 9y ago

I know when we hear about NAFTA we usually think of industrials and manufacturing. Curious if anyone has a good analysis of NAFTA and the (obvious) first-order benefits it presents to the information economy -- since the US is a large net positive on that front.

saimiam 9y ago
(Anecdata) A Canadian friend of mine is now a US citizen who immigrated to the States on a NAFTA related (T?) visa. Now that he's losing his eyesight, companies like Apple and governmental bodies like the Obama White House invited him to advise on disability issues. His presence is definitely a plus for the disabled in America even if you argue that a native born citizen could have achieved the same results.
danmaz74 9y ago
Yes, I expect that if Trump continues on his protectionist direction in some industries, there will be consequences in other ones. Why should the rest of the Western world allow Amazon, Google, Hollywood etc. to dominate their respective fields without tariffs or restrictions if the USA becomes protectionist where it suits Trump?
- readittwice 9y ago
  The EU and its countries are actively trying to tax Facebook, Google, Apple, Amazon, etc. more than today for some time now. It's just not so easy. But that doesn't have anything to do with Trump, this started well before most people in Europe even knew him.
  - jacquesm 9y ago
    And rightly so.
  - mtrimpe 9y ago
    It's not so easy without upsetting established political conventions. If those change though it becomes a lot easier to do.
  - danmaz74 9y ago
    That's because those companies pay lower taxes than local companies. The real beef here isn't with the companies themselves, but with some smaller member states that steal the tax base of other bigger member states.
    - readittwice 9y ago
      You are right, that's what e.g. the verdict against Ireland/Apple was about. But this is only part of the story. The verdict in this case was that Ireland let Apple pay lower taxes compared to other local companies. Some other EU-countries want to tackle a different thing: Apple (just to give an example) not paying taxes on the profit they make in each country individually but only in Ireland (in the case of Apple) for all (EU-)countries combined.

igravious 9y ago

Whoops. Somebody should tell the Brits. http://www.telegraph.co.uk/news/2017/10/10/britain-could-join-nafta-trade-alliance-us-canada-mexico-post/ http://www.telegraph.co.uk/news/2017/10/10/britain-could-joi... “Britain could join trans-Atlantic trade alliance bigger than the EU if there is no deal on Brexit” (Article only _two_ days old at time of writing!)

pjc50 9y ago
Brexiteers have been pushing nonsense like this for ages, usually under the delusion that Britain and America would be equal partners. Meanwhile we're facing another Trump related trade dispute with Canada that affects the UK: http://www.bbc.co.uk/news/uk-northern-ireland-41592474 http://www.bbc.co.uk/news/uk-northern-ireland-41592474 What's not stated in all of this is that the collapse of a major employer plus other Brexit fallout plus the collapse of devolved government in NI could result in a resumption of terrorist violence.
- igravious 9y ago
  I don't think there's any appetite for a return to violence. Besides – as you probably know – the former IRA's political arm, Sinn Féin, is in power north and south of the border.

blowski 9y ago

Trump’s negotiating tactics do genuinely seem quite clever, despite me not liking the man at all or supporting the aims of the negotiation. He seems to combine the “madman” theory with “good cop, bad cop” to produce a “crazy leader, sensible leader” tactic. It’s probably a very effective strategy, if all you’re interested in, is optimising the short-term, very narrow, very selfish interests of a part of the US population. It’s a strategy I’d like to try in a board game.

jacquesm 9y ago
Just like a bull in a china shop is able to effect a lot of change in a short time. Negotiations are supposedly ending in a net positive, I've yet to see one, either for the US or the rest of the world. The world is not a board game.
- blowski 9y ago
  I totally agree with you, but I suspect it will end up in a net positive for Trump and his cronies, just not for the rest of the world. That said, it is fascinating to watch, even if terrifying at the same time.
theyregreat 9y ago
The crybully is similar but he rotates through all three phases of the Karpman Drama Triangle often in order to play hero. My hypothesis is many sociopathic leaders of different stripes use/d similar tactics to hit people’s emotions and bypass their rationality. It is what it is, and many people are seduced when times seem rough that someone has a panacea or a plan to make everything better. I wish people focused more on manipulating him into doing what actually needs to happen and less on useless demonizing or lionizing. Polarization is gonna kill more people by not tackling huge problems like locked-in climate change... the world needs CDR, solar shade or whatever scales as fast as possible, “moon-mission”-style. https://en.wikipedia.org/wiki/Karpman_drama_triangle https://en.wikipedia.org/wiki/Karpman_drama_triangle
- mercer 9y ago

bryanlarsen 9y ago

Prediction: this is going to kill a lot of American jobs short term. It may or may not be good for America long-term, but in the short term it's a huge disruption, and in disruptions jobs get lost quickly and gained slowly. Example: right now, an American firm builds widgets in Mexico with Canadian resources and sells to all three countries. In the future, the American firm builds in America and sells only to Americans. A Cana-Mexican firm builds in Mexico with Canadian resources and sells to Cana-Mex. You can argue which is better for America & Cana-Mex. But there's no doubt that the transitional period will suck for all. In the transitional period the Cana-Mexican firm hasn't been founded yet, nor the American factory built, so the pre-demise scenario continues. But now prices double for everybody due to increased tariffs, non-tariff barriers and currency fluctuation. So sales drop through the floor or are lost to Chinese competitors. Lose-lose-lose.