Would someone clear up the NAFTA debate for me?

[douglasm]

I read today that the Trump administration is proposing a certain amount of United States content on automobiles produced in Mexico and Canada.

Now it's been a long time since I've lived in Detroit, but I seem to remember an agreement between the U.S. and Canada that allows for cross border importation of cars and trucks in both directions without restriction.

Was this treaty scrapped when NAFTA was ratified, or is it still in place?

[Király]

The old treaty [[the 'Auto Pact') was scrapped in 2001 when the WTO declared it non-compliant. But NAFTA had been in effect since 1994 and had basically already replaced it.

https://en.wikipedia.org/wiki/Canada...ucts_Agreement

[Bham1982]

If Trump actually scraps NAFTA, I will have no sympathy for the auto workers who overwhelmingly voted for Trump and who are likely to lose their jobs. It would be an absolute catastrophe for the region, which is the heart of the global auto supply chain. The health of SE MI is inextricably tied to maintaining these global networks.

I'm still hoping that some of his more sane appointees will keep him distracted enough that he won't actually go ahead with this. Just keep him busy tweeting about black folks, immigrants and football players and maybe he won't destroy everything.

[Richard]

It is a whole bigger and complex picture and not just about automobiles and parts.Anybody that agrees with the concept that this country should not be doing deals in its best interest,does not really care about their fellow American anyways.

Other countries seek to enter our market,we can be fair without whoring ourselves out while driving our own citizens into the dirt.

[Wesley Mouch]

If Trump actually scraps NAFTA, I will have no sympathy for the auto workers who overwhelmingly voted for Trump and who are likely to lose their jobs. It would be an absolute catastrophe for the region, which is the heart of the global auto supply chain. ...

100% agree.

But I can't agree with the Ham so easily, can I?

So I'll excuse the Auto Workers, since there was no candidate who was pro-trade.

Sanders is a socialist who hates trade as a tool of the capitalist:
Bernie Sanders on Trade - FeelTheBern.org

And even worse was Ms. Clinton who we all know is an internationalist and pro-trade -- but decided to be anti-TPP and trade because she even she realized that being pro-trade was election death for a Democrat.

Left with those choices, even a pro-trade guy like me had to choose on other issues.

But the Ham is right. Trade is good for everyone. When you buy something abroad, our individuals and our economy benefit by getting something useful, yet keeping more money in our pocket to spend locally. The other country benefits because they likewise get cash in exchange for something they have in excess.... labor.

The individual Auto Worker may lose out on the deal, but their children will benefit by a stronger US, and foreigners who hate us less because we weren't selfishly consigning them to child labor to make trinkets, but we allowed them to participate in our market.

That bit about the Auto Worker who may lose their job.... well they were gonna lose it anyway at some point. Tossing cash at the worker seems like the only solution. Its probably the cheapest way out. Keeping a job by making U.S. cars more expensive, and making it harder to sell our cars abroad is foolish.

Let's trade and keep our long-term economy healthy for our kids.

[Canadian Visitor]

A couple of points to touch on here.

1) In so far as the President moved to cancel NAFTA, repealing the implementing legislation would be a matter for Congress. His track record there would not lead one to conclude that that was a given.

2) My understanding of the law is that IF NAFTA were repealed the Canada-US Free Trade Deal would come back into full force; unless that were separately cancelled/repealed.

3) In the event of total repeal, the WTO [[World Trade Organization) rules would still be in force. Those severely limit tariff options vs past years.

***

In respect of 'fair trade' I think a case can be made that there is little sense, in the mid to longer-term to have free trade with a sizable jurisdiction which maintains artificially low wages and therefore maintains and unreasonable advantage.

I think such an agreement can be justified initially, on the basis that after a period where some production shifts, wages would naturally rise in the lower-cost jurisdiction and level the playing field over time. [[this is happening in China)

This has proven not to be the case with Mexico thus far.

That is a function of a variety of labour regulations in Mexico [[what many would call 'fake' unions that really represent the employer's interest); along with artificially low minimum wages, offset by gov't food subsidies.

While I am broadly pro-NAFTA I don't think there's anything wrong w/applying some gentle pressure on Mexico to raise up its workers, at least somewhat; in turn reducing the 'bleed rate' on US blue collar jobs.

With that said, automation can, is and will significantly reduce employment in traditional blue collar jobs, wherever manufacturing is based.

That means gov't policy must adjust to produce a more educated workforce with greater opportunity for higher-wage employment; with some mitigation measures for those deemed to old to cost-effectively retrain.

[douglasm]

I'm not sure, but I think Canadian Visitor may have answered my underlying question, which was .....

...if President Trump withdraws from NAFTA, would the old "Auto Pact" between the U'S and Canada come back into force?

[Hypestyles]

......... we'll see what happens, but I suspect that 45 will overblow whatever is achieved, if anything..