[06:25 of Video] SECRETARY TILLERSON: Well, I’m delighted to be in Cairo, my first trip to Egypt as Secretary of State, and to really have very comprehensive discussions about this almost one-half-century relationship between the U.S. and Egypt and our commitment to strengthening this partnership in the years to come.

I’m also very pleased to be with Foreign Minister Shoukry, who has become a friend as we have engaged on a number of challenges in the region and to address those jointly and with a great deal of agreement between us as to how those issues need to be addressed. I look forward to my meeting with President al-Sisi and appreciate his receiving me as well.

We had a very productive discussion on our shared regional and security concerns. We spoke about opportunities as to how to strengthen our ties and, as the foreign minister indicated, mechanisms by which we can deepen those ties and further explore areas for mutual cooperation, first through the strategic dialogue which we’ve agreed we will have later this year, and then we’re going to explore also the possibility of a 2+2 dialogue to even allow us to further enhance these conversations both on a full range of issues of not just security concerns, but political and economic opportunities as well.

I did express to the foreign minister our condolences to the people of Egypt for the violence that they have been suffering from the terrorist attacks perpetrated by ISIS and other terrorist groups. Egypt’s been battling this level of extremism for many years, and we continue to be steadfast partners in their response to these attacks throughout this time.

We agreed that we would continue our close cooperation on counterterrorism measures, including our joint commitment to the defeat of ISIS, and Egypt has been a very important member of the Defeat-ISIS Coalition from the beginning. They – Egypt deals with the threats of ISIS themselves and are dealing with it certainly currently in the Sinai.

We also discussed the importance of the protection and promotion of human rights and the vital role of civil society in Egypt. With the presidential elections planned for the end of March, the United States, as it does in all countries, supports a transparent and credible electoral process, and all citizens being given the right and the opportunity to participate freely and fairly.

On Libya, the United States and Egypt support the UN’s Action Plan for Libya for credible and peaceful elections in their country. This will promote stability – much-needed stability for Libya and their economy to prosper. As the Security Council affirmed on December the 14th, the Libyan Political Agreement in our view must remain the framework for a political solution throughout Libya’s transitional period.

Foreign Minister Shoukry and I also discussed Syria and how we can work together to reinforce the UN-led Geneva political process, which is the only political framework through which this conflict can be resolved. And Egypt has played a very important role in supporting dialogue between opposition representatives and the central government in Damascus.

On the Middle East peace, I reiterated that the Trump administration remains committed to achieving a lasting peace agreement between the Israelis and the Palestinians.

Now, the foreign minister and I also discussed how we can intensify our countries’ economic engagement and support our private sectors to generate jobs and prosperity for both of our people, and I acknowledged and welcomed the very important – although we know difficult – steps towards reform that President Sisi has undertaken in order to create a very strong foundation for future prosperity and economic performance in Egypt, and those have been necessary, although difficult, to be fully – receive the full support of the IMF, and Egypt has met all of those requirements.

We’ll do what we can to continue to encourage the economic recovery and we hope that American companies are able to increase their investments in Egypt that will create jobs and opportunities here as well.

The United States, again, commits itself to standing with Egypt, standing shoulder to shoulder in these – in the fight against terrorism, but also standing together to create a more stable region for everyone as well, and I thank the foreign minister for our opportunity to meet and exchange on so many important issues. Thank you.

FOREIGN MINISTER SHOUKRY: Thank you very much.

MODERATOR: (In Arabic.)

QUESTION: (In Arabic.)

SECRETARY TILLERSON: Well, I think the commitment the U.S. has to Egypt’s security in the fight against terrorism should be evident, and both with the release of about a billion dollars of foreign military financing assistance to Egypt to continue to strengthen its capabilities, and also sharing of other approaches to countering terrorism, some of which we can talk about, some of which we can’t so easily talk about. But our joint commitment to defeat ISIS is steadfast and there has been no gap between Egypt and the United States in our joint efforts to confront terrorists and extremist – extremism in the region, but most specifically here in Egypt as well.

So I think the Egyptian people should be confident that the U.S. commitment to continuing to support Egypt in this fight against terrorism, in bringing security for the Egyptian people is steadfast, and that will continue, and we had a great deal of exchange today about how we can advance that. And we just mentioned the intent to have a strategic dialogue later this year. All of these are opportunities for us to identify other ways that we can strengthen and support Egypt’s fight against terrorism, but also, ultimately, to strengthen the economic development of Egypt as well.

MODERATOR: (In Arabic.) Carol, Washington Post.

QUESTION: Thank you. Mr. Secretary, given the concerns (inaudible) to run against the president (inaudible) election and who were arrested and disqualified, how (inaudible) do you believe those elections will be? And will the United States consider withholding more military aid from Egypt (inaudible)?

And Mr. Foreign Minister, sir, human rights groups have called this the most repressive era in modern Egyptian history. What did Secretary Tillerson tell you about democracy and civil liberty here in Egypt? And will anything change here in Egypt after your meeting today? Thank you.

SECRETARY TILLERSON: Well, I think as I indicated in my prepared remarks, and I would answer the same: We have always advocated for free and fair elections, transparent elections, not just for Egypt but in any country. And so the U.S. is always going to advocate for an electoral process that respects the rights of its citizens to make the choices the citizens want to make and the full participation of citizens in those elections. And nothing has changed about our advocacy for those types of elections.

FOREIGN MINISTER SHOUKRY: As relates to some of the comments that have been made by certain members of the human rights community and other activists, I would only recommend that you ascertain for yourself the nature and the current situation in Egypt as relates to human rights, and how the Egyptian people view this administration and its efforts to strengthen and protect human rights, and whether there is that sense of restriction that you alluded to. I think it is – it isn’t helpful that a certain group projects from a perspective of lack of information, lack of direct association to a society, but it is much, much more important the general conditions, the freedom of press that is available, the variety of television shows, the dialogue and the exchange. Development in the social and political field is an evolutionary process. I think over the last 11 years, the Egyptian people have shown their commitment and their determination and their ability to change their course and to indicate their dissatisfaction. If they deemed that they were dissatisfied, they have been able to change two governments in the last seven years, and they have undertaken legislative elections and know how to protect their rights and to advocate for those rights.

So it’s important that I think we recognize that it is the Egyptian people who should determine how they are applying their freedoms and their political activism, and I hope that you will have the opportunity while you’re here in Egypt to discuss this with the Egyptians on the street and ascertain from them directly whether they are satisfied with current conditions.

We had a discussion with the Secretary related to Egypt’s efforts to develop both politically, economically, and socially, and that we continue to do so out of our desire to see Egypt evolve into a place of – that can fulfill the aspirations of its people, and we will continue to rely on the support that we can depend on from the United States in this regard. These are commitments that this administration is confident it will fulfill, and it is responsible to the Egyptian people to continue to fulfill those commitments, as has been stipulated in our constitution.

MODERATOR: (In Arabic.)

QUESTION: (In Arabic.)

SECRETARY TILLERSON: Well, I think it’s important to note that in the announcement President Trump made regarding Jerusalem he also made two very important points as well, one of which was he was not advocating for any change to the status quo as to oversight of the holy sites, recognizing the proper role of existing authorities; and the second is that the final boundaries of Jerusalem are yet to be determined, and that those will be decided among the parties. And those – I think it’s oftentimes those two important points seem to have been overlooked in his announcement. And yes, the U.S. is still committed to the peace process and still believes we have an important role to play in bringing the parties together and seeing a resolution to this. And President Trump is committed to that.

FOREIGN MINISTER SHOUKRY: (In Arabic.)

MODERATOR: (In Arabic.) Wall Street Journal, Felicia.

QUESTION: Thank you. Secretary Tillerson, Vice President Pence, in an interview with The Washington Post, endorsed what you’ve described publicly as talks about talks with the North Koreans, and president – South Korea’s President Moon said he would go to Pyongyang. Is this the start of a diplomatic process in North Korea?

And then for Foreign Minister Shoukry, the U.S. has in the past raised concerns about Egypt’s ties with North Korea. What is Egypt doing to cut those ties?

SECRETARY TILLERSON: I’m not sure I could hear the last part of your question.

QUESTION: I was just asking if this – is this the start of a diplomatic process with North Korea?

SECRETARY TILLERSON: Well, as to – as to the Vice President’s comments about potentially having talks and whether it’s the start of a diplomatic process, I think it’s too early to judge. As we’ve said for some time, it’s really up to the North Koreans to decide when they’re ready to engage with us in a sincere way, a meaningful way. They know what has to be on the table for conversations. We’ve said for some time that I think it’s important that we have – we’re going to need to have some discussions that precede any form of negotiation to determine whether the parties are, in fact, ready to engage in something this meaningful, in order for us to then put together the construct of a negotiation. So we’ll just have to wait and see.

FOREIGN MINISTER SHOUKRY: We did discuss with Secretary Tillerson the issues related to North Korea, the Korean Peninsula, and the security of that region. Egypt has had normal diplomatic ties with North Korea, as does many Western and NATO members, and those ties are, in terms of the relationship, limited to representation, and there is almost no existing economic or other areas of cooperation. But we are concerned with the current status with the threats emanating from the proliferation of nuclear weapons, a situation which we deem as threatening to the global nonproliferation regime, one that has to be dealt within our maintaining global security, also the threats of ballistic missile systems to South Korea and to Japan, and we believe that all of these issues must be resolved for the security of the region and the Korean Peninsula. And we will continue to discuss these issues and to take the appropriate measures to deal with these challenges.

Thank you very much.

[End Transcript]

Consider this a kick-off to my official NAFTA watch.  Readers will note my earlier spidey-sense prediction of NAFTA withdrawal announcement in/around the end of February through March.   I cannot see a delay in an announcement extending beyond March 2018.  Ergo, CTH is fine-tuning the radar to watch closely.

The fatal flaw within NAFTA has not been addressed.  Neither Canada nor Mexico has even slightly indicated a willingness to engage talks over the fatal flaw.

Exactly the opposite happened earlier this month when Canada signed up to the TPP deal.

The agreement has yet to be ratified by Canadian Parliament, and many are nervous, but it will likely get done.

The NAFTA decision will be the biggest political and economic decision in the Trump administration so far, and the corporate GOPe response is anticipated to be beyond ugly.  Additionally, it would be intellectually dishonest not to accept there are very specific interests watching these pages as part of their proactive strategy. (Hi, Tom)

That said, if you were Mexican President Enrique Peña Nieto and you noted the specificity of the current trade-policy planetary positions; and you were overlaying the preparatory action taken by Justin from Canada; and you understand there are factually hundreds of billions in play; you would be a fool not to go past past Economy Minister Ildefonso Guarjardo and directly engage the ultimate decision-maker, U.S. President Donald Trump, out of an urgent need to evaluate the survivability of your economic surroundings.  It would be imprudent not to prepare yourself:

(White House) President Donald J. Trump spoke today with President Enrique Peña Nieto of Mexico to offer condolences to the families of the victims of the helicopter accident in Oaxaca. President Peña Nieto returned the sentiment and expressed Mexico’s solidarity with the United States following the high school shooting in Parkland, Florida. President Trump underscored his commitment to expanding cooperation between the United States and Mexico on security, trade, and immigration.

The basic issue is a simple one – for the United States NAFTA has a fatal flaw.  Canada and Mexico are used by China, Europe and Asian nations as a way to work-around direct trade with the U.S. and those nations use NAFTA as a backdoor into the U.S. market. It works out great for Canada and Mexico, but terrible for the U.S.

It is a structural issue and no amount of negotiation is going to remove the fatal flaw unless Canada and Mexico agreed to terms that are directly against their prior financial interests.  Absolutely ZERO action has been taken to address this issue through six rounds of prior NAFTA discussion.  Round six ended with VERY terse words from U.S. Trade Representative Robert Lighthizer specifically over this issue.

Justin from Canada recently signed up to the Trans-Pacific Partnership.  With that decision the fatal flaw -from a U.S. perspective- just became the final straw to end the U.S. participation in NAFTA.

The U.S. cannot make any bilateral trade deals with TPP nations while those same TPP nations have an alternative access route to the U.S. market through Canada via NAFTA.

Therefore the only way for President Trump to finish a trade agreement with South Korea (current tense negotiations – see Samsung etc.) is to first remove their NAFTA alternative. Anticipating this reality S-Korea also filed a WTO trade challenge earlier today.

Absent of massive last-minute economic concessions (I’m talking full-blown acquiescence) by Canada and Mexico there is no alternative other than for President Trump to withdraw.

Understandably, South Korea is currently hosting the U.S. Olympics and it would have been extremely poor form, very impolite, and economically very destabilizing for Moon Jae-in if POTUS Trump had made the NAFTA announcement in the months/weeks leading up to their international spotlight event.  [It’s not only CTH who follow the global tentacles of multinational trade decisions.]

However, with the Olympics ending next week that diplomatic hurdle is removed… the countdown clock now officially begins.

While speaking during a White House ceremony earlier today President Trump announced he has directed Attorney General Jeff Sessions to develop regulations surrounding “bump fire stocks”, noting the intended regulation would be an actionable step to help prevent future mass shootings.

During his remarks President Trump noted: “We cannot merely take actions that make us feel like we are making a difference, we must actually make a difference.” The decision to eliminate ‘bump-fire stocks’ is smart policy and politically.

On the policy side the regulatory move is in line with already existing rules on firearms that ban auto-fire weapons. On the political side the memorandum stops opposition from saying the President is not taking action; the regulatory memorandum reflects action taken by President Trump that was not taken by President Obama.

(From the memorandum) After the deadly mass murder in Las Vegas, Nevada, on October 1, 2017, I asked my Administration to fully review how the Bureau of Alcohol, Tobacco, Firearms and Explosives regulates bump fire stocks and similar devices.

Although the Obama Administration repeatedly concluded that particular bump stock type devices were lawful to purchase and possess, I sought further clarification of the law restricting fully automatic machineguns.

Accordingly, following established legal protocols, the Department of Justice started the process of promulgating a Federal regulation interpreting the definition of “machinegun” under Federal law to clarify whether certain bump stock type devices should be illegal. The Advanced Notice of Proposed Rulemaking was published in the Federal Register on December 26, 2017. Public comment concluded on January 25, 2018, with the Department of Justice receiving over 100,000 comments.

Today, I am directing the Department of Justice to dedicate all available resources to complete the review of the comments received, and, as expeditiously as possible, to propose for notice and comment a rule banning all devices that turn legal weapons into machineguns.

Although I desire swift and decisive action, I remain committed to the rule of law and to the procedures the law prescribes. Doing this the right way will ensure that the resulting regulation is workable and effective and leaves no loopholes for criminals to exploit. I would ask that you keep me regularly apprised of your progress.

You are authorized and directed to publish this memorandum in the Federal Register. ~President Donald J Trump (White House Link)

Earlier today President Trump hosted an event ceremony honoring Public Safety Medal of Valor recipients.  The President began his remarks with comments on the Parkland FL school shooting.

NAFTA is as precarious as a slow-spinning plate on a stick. Mexico and Canada are both  taking half-hearted turns recharging the momentum – while simultaneously looking for trade options due to, well,.. the inevitable.

The basic issue is a simple one; for the U.S. NAFTA has a fatal flaw. Canada and Mexico are used by China and Asian nations as a way to work-around direct trade with the U.S. and use NAFTA as a backdoor into the U.S. market.  It works out great for Canada and Mexico, but terrible for the U.S.  It’s a structural issue and no amount of negotiation is going to remove the fatal flaw unless Canada and Mexico agree to terms that are directly against their current financial interests.

Ergo POTUS Trump is positioned to withdraw.

Trying to keep the U.S. in NAFTA, but understanding the likelihood of exit, Justin from Canada originally approached China for a big trade deal.  Justin didn’t find Happy Panda in his discussions; instead he found The Red Dragon behind the Panda mask.  China was willing to talk trade, but China tiered their approach because Canada is only valuable to China as long as the NAFTA door is open.  Without NAFTA China has no use for Canada.

Justin left China with dragon burns and immediately realized his trade cards were getting weaker by the day…. so he had to sign-up for the Trans-Pacific-Partnership.  Unfortunately for Justin, though some think he didn’t realize the consequence, signing TPP guaranteed POTUS Trump would exit NAFTA.

Why?  Because if the U.S. stayed in NAFTA the TPP nations would now have a collective backdoor into the valuable U.S. market through Canada.  The NAFTA fundamental flaw just became more flawed.

Mexico discovered the same.  China will talk expanded trade, but only on tiered terms. One tier with NAFTA (good stuff for Mexico); one tier without NAFTA (not as good for Mexico).

The $20 trillion U.S. market is what China wants access to; Xi Jinping doesn’t care about Canada or Mexico – beyond how each of them can benefit China’s products entering the U.S. market.

China plays a zero-sum game; if it doesn’t benefit China, it isn’t done.

So Justin from Canada now realizes he nailed his nations’ trade feet to ASEAN economies [sans Trump’s BFF golf partner Shinzo Abe (Japan)], who care about Canada as a door to the U.S. more than an actual trade partner.  FUBAR eh’?

Simultaneously, Justin from Canada still has red-face from Beijing burns and has to accept he just guaranteed: “no U.S. NAFTA deal is possible”.

Where does rainbow socks turn now…. India.  Except, well,… there’s a problem.

You see, while Justin from Canada was trying to find his way through the China, ASEAN and  TPP trade matrix, POTUS Trump and India’s Prime Minister Modi were hugging it out on trade deals; with U.N. Ambassador Nikki Haley courting the national Indian crowd.

Yup, Justin from Canada shows up in India, and the airport -much like the rest of the diplomatic venues- is empty.  POTUS Trump arrived early and stole all the trade hugging last year; then used a geopolitical strategy of punching Pakistan in the teeth to elevate his own Indian magnanimity.   A bazillion India peeps loves-them-some-Trump now.

More FUBAR eh’?

So Justin from Canada is traveling around India with his family and not getting any love.

Oh dear.

POTUS Trump began with China (Feb ’17). Outlines drawn. Handshakes. But he did so knowing he was dealing with Xi Jinping the dragon, not the panda.   Trump acted like he was accepting magnanimous panda, his granddaughter helped exhibit panda deference, but all while Trump was really viewing Xi with dragon-face.  Brilliant.

POTUS Trump then expanded economic influence through Saudi Arabia and the GCC creating new economic allies based on new definitions; and strategic security partnerships without the traditional U.S. cultural demands.  Stunning results ongoing.

POTUS Trump worked quickly through the economics of Europe gauging who was on-board and who was not.  France, Poland, Hungary all quickly joined up. Germany and the U.K. not-so-much… [Two visits to Macron and a reciprocal state visit soon] …Now go look at the economic results each EU state is facing; look who is winning.

POTUS Trump moved quickly on India as leverage with China trade discussions.  If China does stupid,… Trump hugs Modi tighter.   Trump kicks Pakistan in teeth with brutal truth over Afghanistan and their co-dependent enabling of Taliban.  Modi smiles bigger still.

POTUS Trump moved BIGLY in Asia.  Trump gave BFF Shinzo Abe first place. Japan has golden ticket to U.S. market based on reciprocity – everything is possible and Abe is on top of the world.  Trump knows China will *ONLY* do that which is in their interests… and he knows Xi Jinping needs the U.S. more than the U.S. needs China.  Worst part for Xi is he knows that Trump knows…

We always knew there was a generally good trade strategy visible from POTUS Trump, but it needs to be said that NO-ONE realized just how well thought out it really is.   Now I know what this guy does instead of sleeping… he maps out the matrix of trade leverage and economic strategy….. it’s almost absurd how keenly insightful Trump is on the geopolitical side of economics.

Our president has flaws and faults, we all accept that…. but he is engaging in international economics with a mastery never seen by a U.S. president.  EVER.

That truth is why the multinationals (corporations and banks) hate him so much, yet fear him a thousand times more.  If you doubt, or perhaps just need confirmation,  just look at what happened in Davos.

…“it is much safer to be feared than loved because …love is preserved by the link of obligation which, owing to the baseness of men, is broken at every opportunity for their advantage; but fear preserves you by a dread of punishment which never fails.”

~Niccolò Machiavelli, The Prince