When the broad outlines of the U.S-Mexico-Canada (USMCA) trade agreement first appeared, we said it seemed clear presidential candidate Andres Manuel Lopez-Obrador (AMLO) was aligned with the economic nationalism preferred by U.S. President Trump.
Yesterday that alignment was on full display as AMLO delivered a very strong endorsement for the respectful agreement between the two nations. Unfortunately, the U.S. media will never report on these words of praise by President Lopez Obrador.
Transcript […] I also wanted to be here to thank people of the United States, its government, and thank you, President Trump for being increasingly respectful with our Mexican fellow men.
And to you, President Trump, I want to thank you for your understanding and the help you’ve given us in issues related to trade, commerce, oil, as well as your personal support for the acquisition of medical equipment that we needed urgently to treat our patients of COVID-19.
But what I mainly appreciate is that you have never sought to impose anything on us violating our sovereignty. Instead of the Monroe Doctrine, you have followed, in our case, the wise advice of the lustrous and prudent President George Washington who said, quote, “Nations should not take advantage of the unfortunate condition of other peoples.” End of quote.
You have not tried to treat us as a colony; on the contrary, you have honored our condition as an independent nation. That’s why I’m here to express to the people of the United States that their President has behaved with us with kindness and respect. You have treated us just as what we are: a country and a dignified people; a free, democratic, and sovereign people.
Long live the friendship of our two nations. Long live the United States of America. Long live Canada. Long live our America. Long live Mexico. Long live Mexico. Viva México.
The USMCA rules-of-origin, in combination with mandated minimum wage rates attached to the manufacturing sector; and the fact that Mexico has the lowest current wage rates in North American; specifically means that Mexican workers stand to get the biggest financial benefits… and that’s ok. Trump, Lighthizer and Ross designed it that way.
The U.S. benefits when the Mexican wage rates are raised. Heck, there was a time in the early negotiations, after Canada was kicked out of the room, when Secretary Wilbur Ross was advocating for an $11/hr minimum wage in Mexico, and the Mexicans were like ‘whoa, wait a minute, too high, too high’… [It was quite funny, because Trump was being called racist simultaneous to him trying to give a $85/day pay raise to Mexicans (from $3/day)].
The USMCA deal positions Mexico to retain their current multinational investments; and through a series of sector-by-sector standards on origination the deal simultaneously closes the fatal NAFTA loophole.
The agreement makes an economic manufacturing partnership between the U.S. and Mexico; and for assembly products third parties will have to produce parts and origination material within the U.S. and Mexico.
Here’s a good example in the auto-sector. The new USMCA agreement requires 75% of automobile parts made in North America; and 45% must come from plants with minimum labor costs ($16/hr), or face tariffs upon export to the U.S. Additionally, the total source-origination rate of 75% USMCA product is higher than everyone thought possible.
This 75% country-of-origin level was possible because President Trump cut out the corporations (ie. U.S. Chamber of Commerce) from having any influence over the agreement. Most people probably don’t know, but the USMCA was the first trade deal negotiated without multinational corporations in the room.
Example of downstream consequences/benefits: German auto-maker BMW recently built a $2 billion assembly plant in Mexico (just came on-line). Most of their core parts were coming from the EU (steel/aluminum casting components) and/or Asia (electronics). Now the assembly plant will have to source 75% of the auto-parts from the U.S. and Mexico, with 45% of those parts from facilities paying $16/hr. The Result: BMW will need to modify their supply chain and build auto parts in the U.S. and Mexico. [That’s Exactly What Happened]
One of the reasons President Trump is able to take this approach is specifically because he is beholden to no outside influence himself. It is only from the position of complete independence that accurate assignments based on the underlying truth can be made; and that takes us to the ultimate confrontations – the trillion dollar confrontations.
A U.S. foreign policy that provides the opportunity for fully-realized national authenticity is a paradigm shift amid a world that has grown accustomed to corrupt globalists, bankers and financial elites who have established a business model by dictating terms to national leaders they control and influence. We have our own frame of reference with K-Street lobbyists in Washington DC. Much of President Trump’s global trade reset is based on confronting these multinational influence agents.
When you take the influence of corporate/financial brokers out of foreign policy, all of a sudden those global influence peddlers are worthless. Absent of their ability to provide any benefit, nations no longer purchase these brokered services.
As soon as influence brokers are dispatched, national politicians become accountable to the voices of their citizens. When representing the voices of citizens becomes the primary political driver of national policy, the authentic image of the nation is allowed to surface.
The restructuring of NAFTA into the USMCA disfavors multinational corporations and financial holdings who have exploited structural loopholes that were designed into the original agreement.
With President Trump confronting the NAFTA fatal flaw, and absent of the ability of corporations to influence the direction of the administration, the trade deal ultimately presents the same outcome for Mexico as it does the EU – LESS DOLLARS.
However, in Mexico, the larger systems of government are not as strongly structured to withstand the withdrawal of billions of U.S. dollars. The government of Mexico is not in the same position as the EU and cannot double-down on more oppressive controls. Therefore the authentic voice of the Mexican people is rising.
Andres Manuel Lopez Obrador (AMLO), is a nationalist but he is not a free-market capitalist. AMLO is more akin to soft-socialist approach with a view that when the central governing authority is constrained, and operates in the best interests of its citizens, equity can be achieved.
The fabric of socialism runs naturally through the DNA strain of Mexico, and indeed much of South America. This is one of the reasons why previous Mexican governments were so corrupt. Multinational corporations always find it easier to exploit socialist minded government officials.
When bribery and graft are the natural way of business engagement, the multinationals will exploit every opportunity to maximize profit. Withdraw the benefit (loophole exploitation) to the financial systems, and the bribery and graft dries up quickly. A bottom-up nationalist like AMLO, is the ultimate beneficiary.
The authentic-sense of the Mexican people, rises in the persona of Andres Manuel Lopez Obrador – who actually does personify the underlying nature of the classic Mexican class-struggle.