Stop Worrying About USMCA

Donald Trump is using the US, México and Canada agreement as a distraction tool. The USMCA is nothing more than NAFTA 2.0. The United States economy depends heavily on NAFTA. This is especially true for the Republican-controlled states like Texas.

Donald Trump and cohorts are blaming Nancy Pelosi for holding up the adoption of the USMCA agreement for political purposes. This is true as the Democrats do not want to give Donald Trump a “win”. Andrés Manuel López Obrador, colloquially known as AMLO has also sent letters and spoken to the news media urging the U.S. Congress to officially adopt the USMCA.

AMLO is too worried about his domestic agenda to not notice that he is playing directly into Trump’s hand.

But here the inconvenient truth about the USMCA that Trump and cohorts don’t want readers to notice through the spin. The USMCA has only been approved by México. The United States has yet to adopt it and Canada is waiting for Congress to adopt it.

Through all this, NAFTA keeps humming along.

That’s right, NAFTA is serving the needs of the economy for the three nations. An economy that is very important to all three countries, including many Republican constituencies.

Tabling the USMCA is not hurting the NAFTA economy, except for the uncertainty of Donald Trump’s knee-jerk politics.

Donald Trump has been threatening to formally withdraw the United States from NAFTA since his election. Notwithstanding his threats, Donald Trump has yet to official withdraw the U.S. from NAFTA.

According to the NAFTA agreement, any country wishing to drop out of NAFTA must notify the three other countries of their intention. Trump must provide a written notice to withdraw. The notice would start a six-month clock to drop the U.S. from NAFTA.

Trump has not issued the official notice. And, here is the dirty little secret. Trump cannot issue the notice because his base heavily depends on global trade with Canada and México. If Trump were to withdraw from NAFTA before the USMCA is adopted it would kill the American economy.

In other words, the fictional rush to implement the USMCA is nothing more than a distraction.

NAFTA is not going anywhere, with or without the USMCA.

Click here to read the white paper I wrote in 1991 about NAFTA that led to launch of my business.

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