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Why NAFTA is Really Working for China

By TwoScoopsOfSpaceForce following x   2018 Mar 6, 7:16pm 565 views   2 comments   watch   sfw   quote     share    


1. The biggest, and most common, lie in trade discussion:

.... "China is not in NAFTA"

Yes they are.

Because of the stupid way it was created, any country that trades with Mexico or Canada is effectively in NAFTA.

2. Did you know the biggest sticking point right now in NAFTA is within the Auto Sector?
3. Did you know the biggest argument inside the Auto Sector is around "Rules of Origin"?
4. Think about this carefully.

Mexico and Canada are arguing for the smallest amount of North American parts in NAFTA automobiles possible.
5. The United States is arguing for the biggest amount of North American parts in NAFTA automobiles possible.
6. Again, think about this carefully. Mexico and Canada are demanding more, as in higher content, Chinese, Asian and European parts in NAFTA (American) automobiles.

7. Canada and Mexico are NOT demanding higher content of Canadian and Mexican auto parts, they are arguing for higher content of Chinese auto parts.

Why?

If NAFTA was structured to help Mexico, Canada and U.S. why would Can/Mex be demanding more Chinese auto parts?
8. This Can/Mex demand encompasses total content: including steel, metals, plastics and electronics. The Can/Mex teams are demanding higher content of Chinese parts. The U.S. team is demanding higher content of North American parts.
9. Why would Canada and Mexico be fighting to allow more Chinese and Asian parts in vehicles?

If you accept the Wall Street Journal, Fox, and U.S. Chamber of Commerce narrative on NAFTA trade the position of Can/Mex doesn't make sense.
10. It doesn't make sense, until you understand the fatal flaw in NAFTA. Asia, Europe and specifically China use Mexico and Canada as a backdoor of access into the U.S. Market.
11. Asia, and China ship parts, and partially assembled products, into Mexico and Canada to be finished (usually just repacked) and shipped into the U.S. without tariffs or duties.
12. It works out great for Canada and Mexico. Their ports are busy, they have workers doing the finishing assembly, and their economies thrive from this NAFTA "loophole" (fatal flaw). But for the U.S. there's absolutely ZERO benefit.
13. This is why Canada and Mexico's NAFTA position in the Auto Sector is to fight for the maximum amount of Chinese parts possible to assemble in North American vehicles. (built in Mexico and Canada)

14. If you understand the fatal flaw in NAFTA, you understand it is false to say China is not "in NAFTA".

Au contraire. China is most certainly a part of NAFTA. China is "in NAFTA" by proxy.

This is why NAFTA must be scrapped.

15. Canada and Mexico will never allow NAFTA to be a trade agreement only between the U.S., Mexico and Canada. It is against their financial interests to do so.
16. Canada and Mexico make a TON of money by being secret gatekeepers providing hidden (discussed) access into the U.S. market. Canada and Mexico are essentially trade brokers taking a cut out of any trade action in the U.S. market.
17. Mexico and Canada get paid a "trade toll" by countries (China) and international corporations (global) to give them access to these NAFTA doors. It's a great deal for Mexico and Canada - it completely sucks for the U.S.A

18. The NAFTA fatal flaw, and President Trump understanding it would be against the Can/Mex financial interests to fix it, is why POTUS was so clearly accepting a position of a U.S. NAFTA exit as the only route to correct the issue.

19. .... And the fatal flaw does not just apply to auto-parts, it's everything.

EVERYTHING.

Including FOOD for final processing.

Unrolled thread from @TheLastRefuge2
1   TwoScoopsOfSpaceForce   ignore (4)   2018 Mar 6, 7:24pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

So you take 3 components that could be easily assembled and shipped from China, but instead have them put together with a few screws or a little soldering in a Mexican or Canadian factory.

The Canadians / Mexicans get the longshoreman jobs, the trucking jobs, the assembly jobs, and again another trucking job. The Chinese get NAFTA Tariff-free entry due to the Canadian/Mexican Assembly.

The Americans get nothing, except losing more Jobs to China.

If the Chinese shipped the components to the US directly, they'd be outside NAFTA and subject to duty.

If Americans tried to ship components to China, they'd be subject to massive tariffs, and the Chicoms would pressure the buyer to stop buying, and if it was in any quantity, discover some new safety rules that makes the US products ineligible for import.

South Koreans are the experts at this, they wait until a shipment from Ford or GM of hundreds of cars is loaded at Long Beach, and well underway. They then re-write their Car Safety rules as the cars are in transit, making them ineligible for sale on arrival at Pusan. At the very least, Ford or GM has to tinker with the cars on arrival, creating Korean jobs and making the base cost higher for US Automakers, reducing their competitiveness in Korea. Because our Free Trade agreements are lead by Financiers, who are only worried about access to capital and labor, and not exports, there are no provisions to stop this. Whatever it takes to keep the income flowing into China. Also, since Hyundai and Kia can bribe a US Senator or Congressman just like Ford can, there is no domestic political advantage for Ford or GM.
2   zzyzzx   ignore (1)   2018 Mar 13, 11:02am   ↑ like (0)   ↓ dislike (0)   quote   flag        

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