Thus, according to Trump himself, the leaders of both Canada and Mexico were pretty much scared after hearing the rumors that President Trump was on the verge of issuing an executive order pulling the USA out of NAFTA, adopting a humble attitude and humiliating themselves by almost begging Trump on their knees “to renegotiate NAFTA rather than terminate”, and the Trump storyline continued with King Trump ceding a little bit by granting Canada and Mexico a temporary reprieve, subject to the fact that if Canada and Mexico could not reach a fair deal “for all” (meaning the USA), then NAFTA would be terminated. This time, Trump was not only very angry at Mexico, he was also very angry at Canada. However, the same day when Trump issued his tweets giving his royal account on how he humiliated both the Prime Minister of Canada and the President of Mexico, in a rare moment of lucidity Trump also recognized that a sudden NAFTA pull out would be a “pretty big... shock to the system”, only to return to his angry tone against two of the biggest trading partners of the USA.
To say that a sudden USA pullout from NAFTA without any kind of orderly termination of the multilateral treaty would be “a pretty big... shock to the system”, is an understatement. Most economists now agree that killing NAFTA without at least some kind of orderly termination or some temporary replacement while the USA pulls out completely out of NAFTA is likely to bring far-reaching consequences, with the added aggravation that the dismantling of NAFTA is not something that can be easily reversed. Even England, praised by Trump for its Brexit initiative that will sever forever and ever the membership of England in the European Community, is not doing it from one day to another; it is expected to take two years if not longer. The Britons are not dumb, and they accept the fact that a drastic British pullout from the European Community has all the potential to bring severe consequences to their country. They are acting rationally. However, the USA has a leader who not only lies a lot of the time and reverses himself a lot of the time from what he has said but also acts irrationally, regardless of the consequences.
On the Mexican side, with presidential elections coming up next year, and considering that any new treaty to replace NAFTA or even to restore NAFTA after a wide far-reaching economic shock has been delivered not just to Canada and Mexico but to the US economy as well, a USA pullout from NAFTA will be impossible to reverse without the Mexican Congress willing to join (or rejoin) the dismantled NAFTA, since most of the Mexican Congressmen regardless of their political parties will be quite hesitant to carry on their shoulders the burden of mending a thorn treaty with a trading partner that cannot be trusted for the next four years. In other words, once Trump takes the USA out of NAFTA, for all practical purposes that's it! Already, right now (yes, Mister Trump, right now!) in the crucial elections to be carried out June 4th at the Estado de Mexico state for the governorship of such state, according to the most recent polls the candidate from the leftist party Morena, Delfina Gomez, is catching up with the PRI candidate Alfredo del Mazo. Just to set thing straight, the PRI party up to now in the entire history of Mexico has never lost the governorship of the Estado de Mexico to any other opposing party. The President of Mexico, Enrique Peña Nieto, himself originates from such state. But even more important, the Estado de Mexico has the biggest share of voters of any state in the entire country. To say that a PRI loss in the Estado de Mexico would be devastating to the PRI aspirations to govern Mexico from 2018 to 2024 would be just an aperitif of very bad forecasts to the US Trump government if the leftist Morena candidate Delfina Gomez wins the Estado de Mexico election, since such a triumph could put leftist presidential contender Andres Manuel Lopez Obrador in an unbeatable path to the Mexican presidency. We are talking about the left of Mexico, made up mostly of Trump haters rather than Trump lovers, taking over the presidency of Mexico for the next six years. And they are in no mood to help Donald Trump save his skin and his neck in the very likely case his anticipated sudden USA pullout from NAFTA sends the entire USA into a downward spiral. Some Mexican pundits even attribute the growing sympathy in Mexico for the leftist Morena precisely as a popular Mexican response to a xenophobic anti-Mexican racist being elected in the USA for the presidency in 2017, and Homeland Security Secretary John Kelly has already sounded the alarm bells in what could become a major headache for the Trump administration if the anti-Yankee left in Mexico grabs the Mexican presidency in 2018, an event that would be good news not to the USA but to the Russians and the Chinese.
So, if Donald Trump pulls the USA out of NAFTA, and a very severe economic meltdown ensues killing the US economic recovery so hardly gained during the eight years of the Obama administration, there will simply be no sympathy in a leftist-governed Mexico to try to help the US federal government quell a major economic turmoil caused by a US President acting irrationally. Yes, there will be pain and suffering in both Canada and Mexico, but there will also be a lot of pain and suffering in the USA itself.
The first ones who will be surely hit in the USA are the thousands of US farmers in the rural areas who sell their corn to the big Mexican market, they will simply succumb and go bankrupt as Mexico turns its eyes towards Brazil and Argentina to ensure its supply of corn, without showing any pity for the US corn growers who will very likely receive no economic help from the Trump administration to recover from what are expected to be devastating loses. And this is just for starters. Trump wants to impose a steep tariff on items currently being exported from Mexico to the USA, beginning with a 35 per cent tariff on motor vehicles (this would be part of what Trump calls “a fair deal”). However, an important fact that is being ignored by a man considered by many to be the most ignorant individual to hold the US presidency, is that, in order for Mexico to build and send the finished product to the USA such as cars, a lot of US made components are integrated into such cars, which means that by imposing a stiff tariff in the finished Mexican-built product Trump would also be imposing the same stiff tariff upon those parts made in America and sent to Mexico to become part of the finished product. These are precisely the kind of issues that need to be resolved by expert economists and business leaders in the renegotiation of a commercial treaty that could take several months if not years. The imposition of the Trump tariffs would mean that an entire and very complex chain of US made sub-assembly products that supply the Mexican industry would be derailed carrying down into a big black all the US jobs that depend precisely on their exports to Mexico, and it would be derailed for good since a leftist government in Mexico would be more than glad to put the entire blame of a bad economic situation in Mexico upon the shoulders of a dumb and ignorant US president who, besides all his negative qualities, has distinguished himself as an anti-Mexican xenophobe. The outcome of such weird economic tinkering is as uncertain as Trump's logic and mode of reasoning, but it could very well end up setting a scenario for the next Second Great Depression. And these things tend to last not a few months but a very long time. As a matter of fact, after the Republicans sinked the US economy into the first Great Depression in 1929, it took more than a decade for the US to recover from such a sinkhole, and what pulled out the US out of such experimental morass was not the economic stimulus policies promoted by FDR but World War Two. The Russians tried an experiment in classical Marxism at the start of the 20th century, and to date they are still paying dearly the consequences of their failed experiment in controlled economics.
Wilbur Ross, the US Secretary of Commerce, has declared that a renegotiation of the NAFTA treaty will most likely be at the end of this year. However, this cannot possible be, since Trump cornered himself into a dead end street and did not give himself enough time to modify or renegotiate NAFTA at the very least to minimize the severe economic impact after killing NAFTA.
Apparently, when Trump made his announcement that he would try to renegotiate NAFTA instead of pulling out, most of the US press forgot what Donald Trump stated just when he took office regarding NAFTA. He very specifically mentioned a 100 day grace period allowing some renegotiation on NAFTA to take place, followed by another 100 days period at the end of which he would make his decision to withdraw the USA from NAFTA. So far, with the announcement made Wednesday April 26th by Donald Trump on the issue agreeing (his words, not mine) to renegotiate NAFTA rather than terminate, nothing has changed, and everything is still on track.
But coming August 2017, exactly 88 days from today, if Donald Trump is true to his word and the promise he made to his adoring fans in Pennsylvania, he will have to make his final decision known, and he only has two options: either he pulls the USA out of NAFTA, or the USA remains in NAFTA perhaps under further negotiations. Either way, some of his loyal followers in Pennsylvania may end up turning against him, since if he doesn't pull the USA out of NAFTA as he promised them he would do as president he will be accused of having lied to them just to get elected. And if he carries on with his promise, 88 days from today, and pulls the USA out of NAFTA setting up a chain reaction that will spiral out of control, those in Pennsylvania and the rural areas who will end up unemployed or going into bankruptcy will most certainly punish him if he attempts a re-election bid. Either way, he loses. It's a lose-lose situation.
Since Trump logged his first 100 days in office as President on Saturday April 29th, this means that today, May 11th, twelve days of the second Trump period regarding NAFTA have already been consumed, and the clock is ticking down mercilessly. There are now only 88 days left before he has to make his final decision concerning the USA and NAFTA. If he is true to his words and promises (although we have seen him make some quite dramatic reversals), 88 days from now will be all the time Trump has left to make good on his promise to withdraw the USA from a treaty he has called a disaster since he was a presidential candidate.
Quite frankly, it is impossible to renegotiate something as wide and complex as NAFTA to Trump's liking in the remaining 88 days left. It just won't happen. Furthermore, at least from the Mexican side the Mexican diplomats who represent the Mexican position have already stated that if Trump insists on the renegotiated NAFTA treaty to include tariffs, they will simply stand up and leave the negotiations, considering NAFTA dead as far as Mexicans are concerned. It is quite likely that Canada may end up doing the same thing if it does not opt to keep NAFTA as a bilateral trade deal between Mexico and Canada sans the USA. Furthermore, as stated above, a growing hatred in Mexico towards the USA, due mostly in part to the anti-Mexican Trump rhetoric, is boosting the possibilities of the front runner leftist candidate Andres Manuel Lopez Obrador to become the next President of Mexico, and he appears in no mood to be willing to humiliate himself as President of Mexico in the face of a very aggressive Trump administration. In this respect, Donald Trump has already taken the first steps to ensure the dismantling of NAFTA by pushing Mexicans to swing towards a leftist presidential candidate, even if Trump backtracks and asks for more time for renegotiation. Once the Mexican presidential elections are over a year from now, if the Mexican left rises to power in Mexico, the NAFTA will be out of Trump's hands for good.
Donald Trump, in his hatred of the NAFTA treaty, has demerited all the hard work done in the past by those hard working US diplomats and economic advisers who carried out the negotiations of such a vast and complex multilateral deal that was originally launched by a Republican President, George H.W. Bush, portraying them as stupid clods who were taken in by very wily and evil Machiavellian negotiators from Canada and Mexico intent on imposing deliberately upon an innocent and naive USA a treaty that would be a disaster for the USA and a win-win deal for Canada and Mexico. We must remind ourselves that the negotiators on the US side had advanced college degrees, and if they were made fools by superbly Machiavellian Canadian and Mexican politicians, then this would imply that their US education wasn't worth the paper in which their college diplomas are printed, which in turn implies that education granted by US colleges is a fraud not worth a dime much less a tuition above 200 thousand dollars for a four year college degree.
A more prudent US politician, the reverse of Donald Trump, would assume that the US negotiators and diplomats of the original NAFTA treaty did their best in order to get
Trump might not have the lawful authority to yank on his own the United States out of the NAFTA agreement 88 days from today, it’s a matter of debate. Many experts believe that, under Section 125 of the Trade Act of 1974, the president possesses the authority to unilaterally withdraw from trade agreements, including NAFTA. But it’s somewhat uncharted legal territory, and not all agree. Since Congress enacted NAFTA’s provisions by passing a federal law called the Implementation Act, which doesn’t grant the President the power to withdraw from NAFTA unilaterally, he can’t act on his own. Since NAFTA was approved by Congress under the authority expressly granted to Congress under the Commerce Clause, it follows that only Congress has the power to reverse that approval and cause the United States to withdraw from NAFTA. At least that's what some experts tell us.
Regardless, President Donald Trump only has 88 days remaining on the NAFTA countdown calendar in order to make his final decision. That's what he said, that's what he promised, that's the dead-end alley into which he cornered himself. Come August 8th, and the clock his ticking, someone will most surely tell him: “Time's up!”. And it will finally be the time of reckoning, not just for Donald Trump but also for many of those who voted for him.
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