Earlier today U.S. Trade Representative Robert Lighthizer messaged a warm birthday greeting to Mexican Foreign Secretary Louis Videgaray during ongoing negotiations between the U.S. and Mexican trade teams (video below).
Canada is FUBAR. No-one quite knows how FUBAR Canada is, because no-one has followed the brilliant Wolverine crew closely enough to spot the strategy.
At the strategic direction of President Trump; and it is a really brilliant workaround strategy; the U.S. and Mexican teams are approaching the current NAFTA negotiations from a position of bilateral trade. Trade watchers, Wall Street experts, financial pundits and the entire media apparatus are missing what Team USA are doing right in front of their faces…. they’ve obviously never followed or studied Trump’s out of the box problem solving when it comes to complex deals.
I won’t rehash the NAFTA flaws; familiar CTH readers know them well. However, the bottom line is NAFTA is NOT, repeat N.O.T being renegotiated. I was going to remain silent, but I think it’s safe, Lighthizer is close enough to a deal to explain what’s happening.
The problems with NAFTA are systemic; and there is too much political and multinational lobbyist conniving/scheming; and too many political interests are connected to the current NAFTA. Everyone thinks Trump is renegotiating NAFTA; that’s just what Team Wolverine want everyone to think… that allows the team maneuvering space.
After the end of Round #6 (January 2018), it was obvious to POTUS Trump a NAFTA renegotiated deal was impossible. In March, 2018, Team Trump stealthily began moving in a different direction. In June,2018, Canada accidentally made the admission there were no ongoing talks between the U.S. and Canada. The reasoning is simple.
Without drawing any attention to the shift, Trump put NAFTA in the corner and began an entirely new bilateral trade discussion with Mexico. [Forgetaboudit… just leave NAFTA over there; but let people think what we are doing is NAFTA]
Instead of following customary sequential steps: (1) waiting for endless NAFTA negotiations that can never be resolved; (2) and then announcing NAFTA withdrawal; (3) and then dealing with the political and financial backlash; (4) and then beginning bilateral trade discussions, etc. etc. Team Trump brilliantly and quietly strategized an end-around.
Team U.S.A. reversed the sequencing (but didn’t announce it).
- Negotiate the Mexico bilateral.
- Announce the Mexican bilateral agreement.
- Offer Canada a bilateral (slightly different terms).
- Announce the Canadian bilateral agreement.
- Dissolve NAFTA.
Instead of beginning new trade deals with NAFTA being ended, they end the new trade deals with NAFTA being ended.
Ergo, no political backlash and no political influence. By the time anyone realizes NAFTA is dead – it’s moot. No formal exit strategy is needed because new deals are already on the books.
See the play?
Everyone thinks NAFTA is being renegotiated, it isn’t.
(Reuters) – U.S. President Donald Trump said on Friday that the United States and Mexico were making progress on a trade deal, and warned Canada he would tax their auto exports if an agreement cannot be reached with Ottawa.
“Deal with Mexico is coming along nicely. Autoworkers and farmers must be taken care of or there will be no deal. New President of Mexico has been an absolute gentleman,” Trump said on Twitter.
“Canada must wait. Their Tariffs and Trade Barriers are far too high. Will tax cars if we can’t make a deal!” he said. (read more)
Are you laughing yet?
You should be.
Few can see what he’s doing.
I just keep laughing…. this is what we get when a brilliant businessman is POTUS.
OK, so now we all know the secret… we can watch and laugh together.