Trump's press conference 2017/2/16 was the saddest thing

Drekkan85 said:

Can I get what you mean by "fairly administered". Is it a matter of reciprocity in the agreement itself? Rules of Origin? Dumping?

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NAFTA is 1700 pages long when appendices are included. It is not free trade deal, it is managed trade. I see nothing wrong with reviewing these deals to make sure American workers are being treated fairly.

Thursday said:

NAFTA is 1700 pages long when appendices are included. It is not free trade deal, it is managed trade. I see nothing wrong with reviewing these deals to make sure American workers are being treated fairly.

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Have you actually read those pages?

I have - and it really is free trade. You can't simply appeal to length and then say "Therefore not free trade". So what are those pages?

First we have the baseline commitment - zero tariffs on all headings in the HTS. You then have a few small carve outs - like over-access quota amounts for supply managed goods coming into Canada (these quotas are Canada's version of agricultural subsidies - you can't expect them to go unless the US agrees to remove it's farm aid). There are also specific chapters dedicated to three highly sensitive types of goods - textiles, automobiles, and alcohol (the first two of which were there at specific US request - the last of which is there because each of the countries have byzantine and sub-federally managed liquor distribution, tax, and regulatory schemes).

But then you need mechanisms to prevent people from simply transshipping goods from outside jurisdictions (unless you're comfortable with saying goods shipped from China to Canada can then simply be repackaged and sent alone tariff free).

So you need rules of origin. For some of these things the matter is simple - cotton is NAFTA origin if it's picked in NA. Lumber is NAFTA origin if it's felled in NA.

Then it gets more complicated - take a table. It has several components (nails, glue, wood), but we recognize that it's the labour/craftsmanship that's important. So we'll say "when this becomes a chair, the location in which it becomes a chair is paramount".

In the case of that table, you can say that where a table is manufactured in NA (that is, it undergoes a "tariff class shift into the tariff class") it is now considered originating in NA. So you can have a table made of Brazilian lumber and Chinese nails but which still qualifies as originating (NOTE: I did not consult the HTS for this, I'm not sure if this is the proper rule for tables, this is an example to demonstrate tariff class shift rules).

But then you also have goods that are more complex than tables. For example, automobiles. They're made of many highly complex parts, with massive value add throughout the supply chain. So you don't want a simple tariff class shift to be the rule of origin - as that would encourage only the final welds being done in NA. The Parties didn't care where in NA it happened, just that the major manufacturing happened here. So they come up with a Regional Value Content rule that requires a shift in tariff class plus that the final product be made up of a certain NA value components (the usual rule is 60% by value OR 50% by cost).

Now you have to do this for every single tariff subheading in the HTS. Go look at the HTS - that's thousands of pages. Even when you account for no need for 8-10 digit classification descriptions that's still a hefty chunk of the agreement.

And that's really the free trade in goods section. It's incredibly liberal, covers nearly all goods (with the exception of autos, textiles, alcohol, and certain very specific agricultural items). I'm happy to talk more about those - but it's hard to write off a major trade agreement as not free trade on the basis of those four areas.

So what's in the rest of the agreement? There's a chapter on trade in services. Not overly long and is fairly broad in application. It does create carve outs for professional services (because these typically require sub-federal regulatory approval which the countries weren't comfortable committing to - for example, US State Bars can't be dictated to by the Federal government, so a NAFTA commitment that they must allow Canadian lawyers to practice wouldn't really fly).

There are then a bunch of ancillary areas that countries, once again, traditionally regulate heavily domestically - telecommunications and financial services. If you have specific complaints on those, once again, happy to hear them. But usually these areas aren't overly contentious.

There are the investment protection rules (which aren't "trade" per se, but happy to talk about them if you think they're the problem). There are also numerous pages dedicated to the dispute settlement provisions for when countries think a commitment isn't being upheld. There's also a very chapter with a very long annex on rules for anti-dumping and countervailing duty appeals (which again, nothing to do with "managed trade" but create additional protections for NA producers from actions of the other NA governments).

Finally there are the exceptions chapter for services and investment. This, together with those four above, is the closest to "managed trade" you're likely to find. But these tend to fall into two camps - the obscure and the fundamental. An example of the first - laws providing protections for aboriginal peoples/US Tribes. An example of the second - laws enacted to protect national security (and ancillary, for example, air traffic control regulations)

*****
So I'm wondering - what elements of the above are you objecting to? Is it the four industries that have carve outs/protections? Is it the reservations taken at the end - and if so, what reservations in particular do you object to? Is it the rules of origin - and if so, how would you prevent, for example, Chinese goods from being transhipped if not with RoOs?

I'd really like to get down to specific of what you mean by "managed trade" and what elements you think are harmful/need amending. I'm really trying to engage here as this is an area that I think is both critical and very misunderstood.

Drekkan85 said:

Have you actually read those pages?

I have - and it really is free trade. You can't simply appeal to length and then say "Therefore not free trade". So what are those pages?

First we have the baseline commitment - zero tariffs on all headings in the HTS. You then have a few small carve outs - like over-access quota amounts for supply managed goods coming into Canada (these quotas are Canada's version of agricultural subsidies - you can't expect them to go unless the US agrees to remove it's farm aid). There are also specific chapters dedicated to three highly sensitive types of goods - textiles, automobiles, and alcohol (the first two of which were there at specific US request - the last of which is there because each of the countries have byzantine and sub-federally managed liquor distribution, tax, and regulatory schemes).

But then you need mechanisms to prevent people from simply transshipping goods from outside jurisdictions (unless you're comfortable with saying goods shipped from China to Canada can then simply be repackaged and sent alone tariff free).

So you need rules of origin. For some of these things the matter is simple - cotton is NAFTA origin if it's picked in NA. Lumber is NAFTA origin if it's felled in NA.

Then it gets more complicated - take a table. It has several components (nails, glue, wood), but we recognize that it's the labour/craftsmanship that's important. So we'll say "when this becomes a chair, the location in which it becomes a chair is paramount".

In the case of that table, you can say that where a table is manufactured in NA (that is, it undergoes a "tariff class shift into the tariff class") it is now considered originating in NA. So you can have a table made of Brazilian lumber and Chinese nails but which still qualifies as originating (NOTE: I did not consult the HTS for this, I'm not sure if this is the proper rule for tables, this is an example to demonstrate tariff class shift rules).

But then you also have goods that are more complex than tables. For example, automobiles. They're made of many highly complex parts, with massive value add throughout the supply chain. So you don't want a simple tariff class shift to be the rule of origin - as that would encourage only the final welds being done in NA. The Parties didn't care where in NA it happened, just that the major manufacturing happened here. So they come up with a Regional Value Content rule that requires a shift in tariff class plus that the final product be made up of a certain NA value components (the usual rule is 60% by value OR 50% by cost).

Now you have to do this for every single tariff subheading in the HTS. Go look at the HTS - that's thousands of pages. Even when you account for no need for 8-10 digit classification descriptions that's still a hefty chunk of the agreement.

And that's really the free trade in goods section. It's incredibly liberal, covers nearly all goods (with the exception of autos, textiles, alcohol, and certain very specific agricultural items). I'm happy to talk more about those - but it's hard to write off a major trade agreement as not free trade on the basis of those four areas.

So what's in the rest of the agreement? There's a chapter on trade in services. Not overly long and is fairly broad in application. It does create carve outs for professional services (because these typically require sub-federal regulatory approval which the countries weren't comfortable committing to - for example, US State Bars can't be dictated to by the Federal government, so a NAFTA commitment that they must allow Canadian lawyers to practice wouldn't really fly).

There are then a bunch of ancillary areas that countries, once again, traditionally regulate heavily domestically - telecommunications and financial services. If you have specific complaints on those, once again, happy to hear them. But usually these areas aren't overly contentious.

There are the investment protection rules (which aren't "trade" per se, but happy to talk about them if you think they're the problem). There are also numerous pages dedicated to the dispute settlement provisions for when countries think a commitment isn't being upheld. There's also a very chapter with a very long annex on rules for anti-dumping and countervailing duty appeals (which again, nothing to do with "managed trade" but create additional protections for NA producers from actions of the other NA governments).

Finally there are the exceptions chapter for services and investment. This, together with those four above, is the closest to "managed trade" you're likely to find. But these tend to fall into two camps - the obscure and the fundamental. An example of the first - laws providing protections for aboriginal peoples/US Tribes. An example of the second - laws enacted to protect national security (and ancillary, for example, air traffic control regulations)

*****
So I'm wondering - what elements of the above are you objecting to? Is it the four industries that have carve outs/protections? Is it the reservations taken at the end - and if so, what reservations in particular do you object to? Is it the rules of origin - and if so, how would you prevent, for example, Chinese goods from being transhipped if not with RoOs?

I'd really like to get down to specific of what you mean by "managed trade" and what elements you think are harmful/need amending. I'm really trying to engage here as this is an area that I think is both critical and very misunderstood.

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The end result has been US manufacturers shutting down US plants and building new plants in Mexico. That's bad for US workers.

I've participated in some of these moves myself in the iron and steel industry.

Thursday said:

The end result has been US manufacturers shutting down US plants and building new plants in Mexico. That's bad for US workers.

I've participated in some of these moves myself in the iron and steel industry.

Click to expand...

So then I take it you're backing off the "managed trade" claims, unless you want to discuss specific areas of the agreement you find objectionable?

With regard to plants - like I said US manufacturing is higher outputs than ever before. See the Forbes piece from right before the election: You're Not Going To Believe This But US Manufacturing Is Now Bigger Than Ever Before

The problem with jobs isn't NAFTA, it's automation. I will give you that some, usually very low skilled jobs, went to Mexico (nevermind that these jobs are most vulnerable to automation). Those jobs going to Mexico cut the costs of inputs, which drive jobs in other areas. The opposite is true of protectionist responses. Tariffs on foreign steel saved some jobs in Pittsburgh, but by economic analysis ended up costing jobs on a net basis in other areas (such as auto makers).

That's why sweeping statements like "NAFTA cost jobs" are unhelpful. You really need to show which specific elements you object to, and how you would propose changing those areas. If you don't understand the agreement enough to be able to say that, you don't understand it enough to make the unfounded claim that it cost jobs (as opposed to coming online contemporaneously with job losses due to other factors).

While Trump's Secretary of Defense and Vice President are in Europe, he muses about an act of war...

"The greatest thing I could do [politically] is shoot that ship that's 30 miles offshore right out of the water."

wing2000 said:

While Trump's Secretary of Defense and Vice President are in Europe, he muses about an act of war...

"The greatest thing I could do [politically] is shoot that ship that's 30 miles offshore right out of the water."

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That statement is so bizarre. He really thinks that his supporters want a war with Russia? Or want him to prove his strength as a leader in such a way as this?

The thing with Trump is that accusations of authoritarianism/ fascism/ Stalinism are going to be continually made because he is treating his role as that of the head of a business, not a servant of the people (which is how the presidency is traditionally defined). And businessmen tend to be dictatorial in their management.

Goonie said:

The thing with Trump is that accusations of authoritarianism/ fascism/ Stalinism are going to be continually made because he is treating his role as that of the head of a business, not a servant of the people (which is how the presidency is traditionally defined). And businessmen tend to be dictatorial in their management.

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What do you expect from a plutocracy government type?

The young reporter who pitched the "very nice question" to President Trump is from "Universal News Forever" (UNF), a news agency he started when he was 8 years old. While his initiative is great, one has to wonder how a 19 year reporter was chosen by the POTUS to ask a question.....


UNF NEWS – News And Information 24/7

I'm fine with the diffusion/decentralisation of news away from the major centres (TV networks, traditional print journalists, major periodicals ect). I work for a 'new media' style firm that has both an online presence and publishes a more traditional monthly periodical, so I sort of straddle both camps.

There's a couple of very large caveats on that media democratisation though:
the access of the existing media should not be restricted;
there should be no stacking of the deck towards new media/alt media/citizen journalists of one particular political view compared to another;
the media, whether old or new, partisan or neutral, left or right, should maintain its independence. Part of the media's job is not just reporting, but investigation and verification of claims.


My thinking on the trouble Trump has with the media is this:

His predecessor was basically truthful in his dealings with the media and had a collaborative approach.
Obama's politics and values lined up closely with a lot of the media's - so what he said usually passed a basic 'smell test' concerning its ideological content AND factual accuracy.
The vast majority of falsehoods that he uttered seemed (emphasis on seemed here) to be genuine errors, rather than deliberate lies for political points.
Essentially, Obama and the media had a collaborative approach - both recognised that the other was vital to their jobs and that a good working relationship made both of their lives easier.

Trump has the opposite relationship.
His ideology generally doesn't line up with that of journalists - who tend to be highly educated in the liberal arts, well travelled, middle class and usually form white collar backgrounds. So, he's already pushing upstream when it comes to the 'smell test'.
His relationship with the media is directly antagonistic - and its not the media's fault. Trump appears to have exceptionally thin skin and also appears to have a need to return any slight, real or imagined, against him, with interest. So, if the media reports something that is accurate, but unflattering to him, that makes them the 'enemy of the people'.
Trump believes that he can do his job without the media as intermediaries between him and the US populace. It will be interesting (and entertaining) to see how well nuanced policy discussions and 'fair and balanced' debate on issues is conducted 140 characters at at time.

Hank77 said:

That statement is so bizarre. He really thinks that his supporters want a war with Russia? Or want him to prove his strength as a leader in such a way as this?

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More likely, he wants to prove his strength as a leader... nothing stirs up nationalism like a good war...