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Careful Messing With NAFTA

January 23, 2017

It comes as no surprise that Mango Mussolini is wanting to renegotiate NAFTA.  Before I go further let me get it stated that this trade deal was signed to encourage investment and tighten protection and enforcement of intellectual property which includes trademarks, patents, and copyrights.  Let me also state up front the deal has nothing to do with immigration or security at our borders. I mention that latter point as there is an attempt to make this trade deal morph into the anger the drives angry white voters–and that “alternative fact” needs to be dispelled.

NAFTA is very important economically to the U.S., Canada, and Mexico. And it might be noted that if anyone has a reason to raise concerns about this deal it is Mexico.

That is because, as an example, the Mexican consumer when at the store to buy a bottle of Tide finds the cost the same as in the U.S. – despite the currency difference. Many Mexican brands have gone by the wayside for American brands to come in and dominate the shelves. Nearly every major industry in the U.S. as of last year was counting on consumers in Latin America in order to continue to maintain their revenue growth.

The complaints about the unfairness to America over NAFTA is over-blown, and not based on facts.  If there is anyone who has faced more of a blow-back from the deal it is Mexico.  My saying that does not in any way take away the many more positive aspects to free trade.  But there are the ever-present pockets of uncertainty and economic displacement that occurs with such matters.

So when Trump entertains the notion that NAFTA should be renegotiated to make it a better trade agreement so to address current political  issues he should be aware of the external forces that might want to challenge the American perspective on what constitutes positive changes.  

Mango Mussolini might want to consider how ticked off he wishes to make Mexico.  There are bigger economic forces at play such as the natural gas industry relying heavily on the current tariff structure to remain in place in order to expand into Mexico which would finally bring cheaper utilities to the country where electricity is a premium.

But why should Trump be concerned about facts?

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