Tag Archives: NAFTA

It’s Official: No More Phony Memo Here

The cable news obsession with the highly questionable (I’m trying to be polite) memo from Devin Nunes’ staffers is sucking up the oxygen, and nitrogen, argon, carbon dioxide, and water vapor from the air…or at least from the airwaves. So, how about some news that isn’t Dumb Memo related?

As if one weren’t too many, there’s a fellow being styled as the “next David Duke.”  The Huffington Post has an interesting article about this bit of algae mass in stagnant water.  It seems the “White Ethno-State” is as phony as the leader.   In a related publication the New York Daily News offers a good piece on the NFL and the players’ protests, speaking of the origins of the flag ceremonies:

However, that’s not the case anymore. In 2015, two senators released a report that found that the Department of Defense spent $6.8 million on “paid patriotism” between 2012 and 2015. The money, which was spread out amongst 50 pro teams from the NFL, NBA, MLB, and others, was for teams to do flag presentations, honor military members and reenlistment ceremonies.

Which begs the question: How can black players who protested the flag be unpatriotic if the faux patriotism that we see before every NFL game had a price tag?

Good question.

Be careful of slipping on ICEPBS reports: “Federal immigration authorities formalized a policy Wednesday to send deportation agents to federal, state and local courthouses to make arrests, dismissing complaints from judges and advocacy groups that it instills fear among crime victims, witnesses and family members.”   The official guidelines are here (pdf).   Gee, what could possibly go wrong?  Oh, how about a person showing up at a traffic court?  The man’s crime, in case anyone’s interested, is that his DACA status expired although he is still eligible for an extension.  He has no other criminal record. Or how about detaining an immigrant (with green card) while he and his wife were in court as part of an interview to establish their official status as a married couple.  Or, the Polish immigrant doctor arrested on January 16, 2018 by ICE for having two misdemeanor offenses on his record as a teen; he was released on bond  yesterday.  Then there are the two detainees in Florida who have died in custody.    At least there’s one federal judge who isn’t amused.

America alone means China First:  at least in terms of amassing trade deals, “From deals with blocs including the Association of Southeast Asian Nations to bilaterals with tiny countries like Maldives, China’s FTAs already cover 21 countries. That compares with the 20 countries covered by U.S. agreements. More than a dozen additional pacts are being negotiated or studied, according to the Ministry of Commerce. ” (FTA = Free Trade Agreement)

Renegotiate a better NAFTA?  Maybe not, the administration’s trade rep is clashing with the neighbors.   Secretary of State Rex Tillerson appears to be trying to help clean up the mess.

Jobs Jobs Jobs: Harley Davidson is cutting production (read: layoffs) as a result of declining sales.  Wal-Mart is planning on store closures and other layoffs, “in the thousands.”  Sears is laying off 220 from its corporate offices. Whirlpool confirms it is planning layoffs.  Pandora is laying off 5% of its workforce.  Kimberly Clark is paying for its layoffs with its shiny new tax cuts.

Closer to home: The Nevada Independent reviews some important state races. (Highly recommended reading)  Reno city officials are having a tough time explaining how they handled an ex-employee’s sexual assault complaint.  Rep. Jacky Rosen announces her introduction of a bill to assist homeless veterans.

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Filed under Nevada politics, Politics

More Drivel: Trump, Trade, and Unicorns

For those who haven’t had enough of the Trumpian penchant for stringing together cliches, generalizations, buzz words, dog whistles, and nonsense, there’s a heavy dose of all the above in the Pensacola Speech…including “America First” isolationism.  Evidently, the United States of America will be “great again” when we posture, pose, and pound our way to the elimination of international trade agreements.  Gone the Trans Pacific Partnership.

Lovely.  The TPP was a flawed proposal, but it was a close version of what the Chinese thought it was — a way to contain Chinese influence in the region.  So, instead of ongoing negotiations we have the increasing importance of the Regional Comprehensive Economic Partnership spearheaded by (Guess Who?) China. [CNBC]

“The mainland is already the biggest trading partner for the bulk of Asian countries, but it’s gradually increasing its political and economic sway by leading projects that impact the region. Those included the Asian Infrastructure Investment Bank and the “One Belt, One Road” infrastructure program.”  [CNBC]

The Australians have figured this out, with one analysis observing the TPP model was better fitted to large developed economies (read: US, Australia, Japan) but without US participation and leadership, the Chinese version RCEP is currently the only game in town.

“We will hopefully keep NAFTA…” he said in Pensacola, but the talks are stalled.  As of November 22, 2017 the outlook wasn’t all that optimistic healthy:

“The United States, Mexico and Canada failed to resolve any major differences in a fifth round of talks to rework the NAFTA trade deal, drawing a swift complaint from the Trump administration on Tuesday that the lack of progress could doom the process.” [Fortune]

And more:

U.S. President Donald Trump has threatened to withdraw from NAFTA unless he can rework it in favor of the United States, arguing that the pact has hollowed out U.S. manufacturing and caused a trade deficit of over $60 billion with Mexico.  The U.S. official expressed frustration that Mexico and Canada were not engaging in talks on the auto content proposal and others aimed at “rebalancing” trade in the region. [Fortune]

Here’s a Pro Tip:  In order to negotiate you have to have a partner.  In this case, partners. If the partners are not at the table then instead of a “reworked” agreement in favor of the US we have nothing.   Trump is also wrong to assume that NAFTA is the only game in town:

“This year, for the first time, 94% of goods moved tax-free across borders in the Pacific Alliance, a trading bloc that includes Mexico, Colombia, Chile and Peru. Formed in 2011, it accounts for half of all trade in the region and covers about 200 million people.

“We are trading as a group of countries in agreement on free trade,” Mexico’s foreign minister, Luis Videgaray,said Wednesday evening in New York. Videgaray spoke alongside the presidents of Colombia and Chile, as well as a Peru’s trade minister.” [CNNMoney]

In other words, watch what happens in the Pacific Alliance, and the South American trade bloc Mercosur.   And, the current  trade negotiations between Mexico and Argentina likely aren’t founded on Mexican reaction to Trump’s continual references to His Wall, but are more likely the result of comments like the ones he made in Pensacola — that NAFTA should benefit the US, and everyone else gets the hind quarters.  Moving from the general to the specific issues with agricultural trade between Mexico and South American nations:

“Mexico bought 100,800 tonnes of yellow corn from Brazil in September and 41,000 from Argentina — a drop in the ocean compared with the 10.5m tonnes bought from the US. But so far this year, it has bought 11 per cent more of the commodity from the two South American countries than in all of 2016, according to government data.” [FinancialTimes]

Pro Tip Number Two: Always assume a negotiator has a back up plan, and it probably won’t be the one you want.  Are we Great yet?  Have we rounded up all those Unicorns Trump said we were going to get?

Unicorn driven negotiations aren’t successful.  The Trump administration appears to believe a tenuous notion: if you start with a Unicorn then you can negotiate your way into getting the Unicorn.  Unicorn 1: The US gets 80+% content on cars in NAFTA (even though auto manufacturers say this will make their autos noncompetitive in the marketplace.}  Saying, “I want my Unicorn, and I’m walking away if I don’t get it,” assumes there’s a Unicorn in the first place, and you can get the thing in the second.

Those who persist in believing there are Unicorns may explain their elusiveness by saying they must all be grazing somewhere else.  Fine.  However, the Trump administration chasing its trade Unicorns would be well advised to remember that if they exist but are elusive it’s because they have other pastures in which to play.  The Chinese are more than willing to step in to fill the vacuum created by the loss of American leadership in the TPP, and the Mexicans are perfectly willing to increase their trade with Pacific Alliance and Mercosur partners in South America.  They’ve already done so.

The rhetorical sound track of Trump speeches in which we are promised Unicorns (American Made, America First, American Work) is a thin and tinny cover for inept trade talks during which bluster replaces substance and the Unicorns are no more substantial than the empty promises.

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Filed under Economy, Politics

Thank You Senator Corker

Hmm, never thought I’d begin a post on a liberal blog with “Thank you, Senator Corker.” But, here it is.  The Chairman of the Senate Foreign Relations Committee issued his now famous Tweet about properly staffing the Pennsylvania Adult Day Care Center, and followed up with a serious conversation including:

“The senator, who is close to Mr. Tillerson, invoked comments that the president made on Twitter last weekend in which he appeared to undercut Mr. Tillerson’s negotiations with North Korea.

“A lot of people think that there is some kind of ‘good cop, bad cop’ act underway, but that’s just not true,” Mr. Corker said.

Without offering specifics, he said Mr. Trump had repeatedly undermined diplomacy with his Twitter fingers. “I know he has hurt, in several instances, he’s hurt us as it relates to negotiations that were underway by tweeting things out,” Mr. Corker said.”

Simply airing these views is an act of civic responsibility, and if the Senator’s comments are accurate then there are more Republican Senators who hold these views; it would behoove them to chime in, even if only on the last few lines of the chorus.  We can imagine why we’ve not heard more voices.

The Republicans may now be victims of their own gerrymandered monster.  Those who break with the President may feel at risk of facing primary challengers.  However, a president with a 32% approval rating is not necessarily a creature to be feared.   That said, there are states in which the local politics could require senatorial and congressional candidates to pose close to the president, or at least could encourage it. Senators should recall that a Trump endorsement doesn’t insure election — ask Luther Strange in Alabama.

Senator Dean Heller (R-NV) has drawn a challenger who is (thus far) playing unabashed sycophant in the Trump parade, perpetual candidate for almost anything Danny Tarkanian.  (See also: Nevada Independent)

“I have so many people that are contacting me over the past couple months saying ‘you gotta run against Dean Heller,’ ” Tarkanian said. “They understand, as I do, that we’re never going to make America great again unless we have senators in office that fully support President Trump and his America first agenda.”

There are a few problems with that agenda.  If America first means America alone, then the President’s doing a fine job of that.  Right off the bat members of NATO got the message that Trump didn’t think all that much of Article 5, at least not enough to even mention it during a meeting concerning that important mutual defense clause.  Paris Accords — not even a treaty, but a mutual decision to follow voluntary self imposed guidance on climate change mitigation — and the US backs out.  When the President said he wouldn’t mind renegotiating the agreement the rest of the world’s nations said, thank you but NO we’re not interested.

We’re now in Round 4 of talks to renegotiate the NAFTA and the US Chamber of Commerce isn’t pleased with the administration’s demands, which border on protectionism (if they don’t ramble right into it).  As of two days ago the administration appeared poised to insert “deal breaking demands” into the bargaining process, some of which would seriously upset supply chains for the auto industry.  While there are certainly NAFTA provisions which might be improved, the current administration has proposed items which sound very much like the TPP provisions Trump opposed when he pulled the US out of those talks. [WaPo]

And then there’s North Korea.  While the remnants of the State Department (there are still a massive number of unfilled positions, many of which have NO nominees) try to tackle this problem, the President issues saber rattling tweets and undercuts his own Secretary of State.  [NPR]  It isn’t the least bit reassuring to hear informed comments like this when discussing the delicate and significant relations with the North Koreans:

“Without political appointments in place, governments in Asia and around the world are canvassing the Trump administration, trying to open lines to various advisors in the White House. And they’re getting mixed messages that are often hard to sort out.”

Oh, but wait there’s even more.  In addition to leaving our allies scrambling around at least since last August trying to find definitive answers to a chaotic foreign policy, they may also question whether our word means much of anything.  We need to recall that whatever Trump says, there are 6 nations involved in the Iran nuclear development containment deal and two of them aren’t happy: the Iranians and the Russians.  The Chinese government went on record in late September in support of the containment plan treaty, and three days ago the United Kingdom made its position clear in a medium Trump would understand (Twitter) “The Iran Deal is Working.”  The French foreign minister made a longer, but similar comment:

“It’s essential to maintain it to prevent a spiral of proliferation that would encourage hardliners in Iran to pursue nuclear weapons,” the minister told journalists in New York on the sidelines of this week’s UN general assembly.

French President Macron has also made his support for the agreement clear.  The German government has stated its support for a continuation of the agreement.   The P5+1 that signed the treaty could end up being the Chinese, French, Germans, Russians, and British vs. the US.  America “first” literally becoming America alone.

Senator Corker has a reputation for speaking carefully — all the more reason to listen to his warning.

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Filed under Economy, Foreign Policy, Heller, Iran, NAFTA, Nevada politics, Politics, Tarkanian

Floss to Gold? Asking Better Economic Questions

While Nevada sits with an 11.6% statewide unemployment rate, an 11.8% rate in the Las Vegas Metropolitan Area, an 11.5% rate in the Reno-Sparks area, an 11.7% rate in Carson City and environs, (Elko County micro area is at 6.1%) [DETR] the national debate over jobs and economic policy gets waged in Sound Bites and Furious Advertising.  Everyone feels “our pain,” but there are two very different ideological positions for dealing with it.

The General Policies

The Romney Campaign summarizes the candidate’s Job Creation formula as follows: “His plan seeks to reduce taxes, spending, regulation, and government programs. It seeks to increase trade, energy production, human capital, and labor flexibility. It relinquishes power to the states instead of claiming to have the solution to every problem.”  [Romney]

The categories on the Obama website promote the President’s interest in  (1) Investing in American manufacturing and innovation, including doubling the tax deduction for domestic advanced technology manufacturing from 9% to 18%, and offering a 20% tax credit against expenses incurred in relocating jobs back to the United States;  (2) cutting taxes for small businesses and streamlining the patent process; and (3) restraining the excesses of the Financial Sector and curbing practices on Wall Street that leave American taxpayers holding the bag for financial sector errors in judgment.

Both campaigns are heavy on tax cuts, but diverge from that point.  Both campaigns place the jobs category in a wider economic framework.  The frames are very different.  Romney’s summation is a classic compilation of conservative notions all predicated on the assumption that government is the problem.   Obama’s summation is a centrist amalgam of tax policy and consumer protections.

Bush 2.0

The Romney proposals are little more than Bush Redux, the Trickle Down Theory of economic growth.  As noted previously:

“We should also bear in mind that what Governor Romney is calling a “job creation” proposal would more accurately be labeled a tax reduction plan which he hopes might could would should in some idealized ideological world of Trickle Down economics produce the job growth we want IF it works — we’re still waiting for the tax reductions on corporations and wealthy individuals to work from the last round. [DB 7/9/12]

Governor Romney also hits all the correct notes in the stump speeches about small businesses, but once again it’s with a philosophy which assumes that if the yachts are rising, with the tide or not, then everyone’s boat will float a bit higher.  [DB 7/10/12]

When the components of the Gross Domestic Product were discussed in terms of what kinds of economic growth would we need to convince firms to add more employees we found there volatility in private economic investment, negatives in government spending, and the overall GDP muddling along.  [DB 7/10/12]

Simplistic prescriptions like “cutting regulations,” and “increasing labor flexibility” from the Romney camp should be looked as as closely as the proposal to fast track the Trans-Pacific Partnership — or, NAFTA on steroids. [DB 7/9/12]

He Did It Too!

One of the weaker arguments made by the Romney campaign is that the Obama Administration has been derelict in its duty to protect American jobs.   The first charge was “he did it too.” From the former Massachusetts Governor campaigning in Colorado:

“It is interesting that when it comes to outsourcing that this president has been outsourcing a good deal of American jobs himself by putting money into energy companies — solar and wind energy companies that end up making their products outside the United States,” Romney said. “If there’s an outsourcer-in-chief, it’s the president of the United States, not the guy who’s running to replace him.”  [CNN]

First, there’s an interesting split here.  The former Massachusetts Governor is speaking only of the products used to transform solar and wind energy into electric power — not the power itself.   It would be nice if the Chinese didn’t manipulate their currency, and it would be well if there were more American manufacturers of solar and wind energy components.  It would be nicer still if the U.S. were not so dependent on fossil fuels to produce electrical power.

Secondly, the slap at solar and wind technologies implies that Governor Romney is firmly in the Fossil Fuel camp, and the attempt to equate renewable energy with off shoring jobs is a rhetorical trick, not necessarily the explication of any policy not already associated with the Bush Administration.

The second charge was a bit more nuanced, but not much:

“In addition to Priebus’ event, Romney’s campaign is also pointing to a new story in The Washington Post that details criticism of Obama for allowing domestic jobs to shift overseas. “American jobs have been shifting to low-wage countries for years, and the trend has continued during Obama’s presidency,” states the article, published online Monday night.”  [CNN]

Now, why would “jobs shift to low wage countries” for years?  Any reference to tariffs is asking for an immediate torrent of “Protectionism!”  And, an obvious question to ask at this juncture is whether trade agreements promote economic growth or “high productivity poverty?”

Any globalized corporation seeking to reduce its labor costs is going to locate plants in regions with a competent labor supply and a local infrastructure capable of supplying energy needs and providing adequate transportation and distribution for products.  “If only labor costs could be reduced, and union contract  requirements be eliminated — then we would have prosperity,” cry the manufacturers.  The numbers don’t seem to validate this contention.

If unionization and hourly compensation costs are the down fall  of economic growth, then why is Germany seven places above the United States?  However, as long as Chinese workers are comfortable with monthly compensation of $636, or workers in India will accept wages averaging $295/mo. or Pakistan’s labor force averages $255/mo. [BBC] then manufacturers who seek low hourly compensation costs will “shift jobs to …..” and there won’t be much any chief executive can do about it.

Asking Better Questions

A better question is how to replace manufacturing jobs for clothing or textiles — already long gone — with new manufacturing in new technologies.  We can ante-up to create new firms, or in the worst scenario, throw up both hands and allow the Germans and the Chinese to take the field.

We can get entangled in small arguments about whether Ralph Lauren, Inc. should have clad our Olympic team in Chinese manufactured clothing, or we can ask whether we want “Buy American” provisions in government procurement processes.   Conservatives, such as Governor Romney,  have generally been opposed to Buy American legislation.  [OF]

We can spew and sputter about backing start up loans to individual niche market solar panel manufacturers — or, we can ask how we might best coordinate the efforts of our manufacturing and higher education resources toward creating energy technology for the 22nd century.

We can bash unions, create more “right not to work” states, and restrict workers’ capacity to bargain for wages, hours, and working conditions; or we can focus more attention on retraining employees for modern jobs.  We can grouse about environmental regulations to abate air and water pollution, or we can put additional effort into devising and manufacturing the best quality filtration systems on the planet.

In short, we can cut taxes and regulations until every cow in the Intermountain West comes home — but until we broaden our focus from a narrow view of what is good for the financial markets to a wider perspective including what it will require to advance our manufacturing capabilities, we’re still going to be stumbling in the sagebrush trying to transform “high productivity poverty” floss into “high employment opportunity” gold.

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Filed under 2012 election, Bush, Bush Administration, Nevada economy, Nevada politics, Obama, Romney

Jobs? The Romney Plan: NAFTA on Steroids

Governor Romney proposes a platform to create nearly 11 million jobs in four years, or at least that’s what he was saying as of September 6, 2011. [CSMonitor] Let’s take him at his word that he stands by what he said, whatever it was.

Trading It All Away

There are a couple of significant components in his “job creation” package.  The first we should look at very carefully is the promotion of the Trans-Pacific Partnership. [Romney] If you like NAFTA you’ll love this one.

The TPP, set in motion during the Bush Administration in 2008 and continued in fits and starts during the Obama Administration, would create a trade framework including Australia, Brunei, Chile, Malaysia, New Zealand, Singapore, Peru, Vietnam, Canada, Mexico, and Japan. [Brookings]   Russia and China are also included. [HuffPo] The Obama Administration’s negotiating position begins with the provisions of the Korea FTA as the model.

However, thanks to intense corporate pressure the proposed TPP doesn’t stop there:

“Think of the TPP as a stealthy delivery mechanism for policies that could not survive public scrutiny. Indeed, only two of the twenty-six chapters of this corporate Trojan horse cover traditional trade matters. The rest embody the most florid dreams of the 1 percent—grandiose new rights and privileges for corporations and permanent constraints on government regulation. They include new investor safeguards to ease job offshoring and assert control over natural resources, and severely limit the regulation of financial services, land use, food safety, natural resources, energy, tobacco, healthcare and more.”  [Wallach, CD] (emphasis added)

Why don’t we know more about this?  Because the negotiators agreed not to release any information about the talks until 4 years AFTER ratification.  [Wallach, CD] What’s the reason for all the secrecy? The proponents of the TPP say it is necessary because a leak brought down the Free Trade Area of the Americas, and therefore no public scrutiny should be allowed.  The USTR attempted to explain away the secrecy in classic agency-speak.  [USTR]   Maybe a little bit of light is in order?

US negotiators have proposed new rights for Big Pharma and pushed into the text aspects of the Stop Online Piracy Act, which would limit Internet freedom, despite the derailing of SOPA in Congress earlier this year thanks to public activism. In June a text of the TPP investment chapter was leaked, revealing that US negotiators are even pushing to expand NAFTA’s notorious corporate tribunals, which have been used to attack domestic public interest laws. [Nation]

The Trans Pacific Partnership would certainly cut “red tape,” if by “red tape” you mean environmental protection laws, worker safety regulations, and consumer protection acts, enacted by national legislative bodies, and there’s more:

“Countries would be obliged to conform all their domestic laws and regulations to the TPP’s rules—in effect, a corporate coup d’état. The proposed pact would limit even how governments can spend their tax dollars. Buy America and other Buy Local procurement preferences that invest in the US economy would be banned, and “sweat-free,” human rights or environmental conditions on government contracts could be challenged. If the TPP comes to fruition, its retrograde rules could be altered only if all countries agreed, regardless of domestic election outcomes or changes in public opinion. And unlike much domestic legislation, the TPP would have no expiration date.” [Nation] (emphasis added)

Little wonder Governor Romney, founder of Bain Capital, would like to put this agreement on the fast track!  Speaking of taking a knee before foreign laws — this agreement, as it stands, would have the U.S. genuflecting to the corporate TPP tribunals into time out of mind.  Australia and New Zealand have already announced they have no intention of submitting to a “parallel corporate court system.” Under the TPP proposals the “jurisdiction” issues are problematic:

In another concerning development, the “outline” indicates that the TPP is likely to include much of the same investment text as NAFTA—including the provisions that give foreign investors the extraordinary right to bypass U.S. courts and sue the U.S. government in an international arbitration panel if the investor feels it hasn’t been treated “fairly” or if a federal, state, or local law interferes with its expected profits. These same rules give U.S. firms an incentive to invest overseas (taking U.S. jobs with them), so they can bypass the judicial process in foreign countries and sue our trading partners (often developing countries) before international arbitration panels. We can’t let another trade agreement give U.S. companies more reasons to send jobs offshore! [AFL-CIO] (emphasis added)

In other words, if any corporation thought a local, state, or federal statute interfered with their profits, the TPP allows access to that parallel corporate court for a ‘decision.’

How easing job off-shoring is supposed to create “good well-paying American jobs” is something of a mystery.   Proponents argue the partnership will ease export facilities for small businesses.  Maybe, but the price tag is that major tobacco, pharmaceutical, food manufacturing, and international banking corporations will get free rein to ride rough shod over any national legislation they don’t like.

They don’t like labor protection laws.

“…with regard to labor rights, the “outline” reads “TPP countries are discussing elements for a labor chapter that include commitments on labor rights protection and mechanisms to ensure cooperation, coordination, and dialogue on labor issues of mutual concern,” but fails to mention ILO core labor standards or even whether the labor provisions will be enforceable.”  [AFL-CIO]

And, they don’t care for paying American level wages:

“According to the U.S. State Department, the per capita income in Vietnam was only $1,068 in 2010. This compares with a per capita income of $40,584 for the United States in the same year. This massive differential shows the skewed nature of the agreement. Of course companies are going to choose to manufacture items in a country where they can pay pennies on the dollar for labor. America as we know it would not exist if workers labored for those kind of wages, but if the TPP is passed companies will have a choice between hiring a worker in the United States, or hiring a much cheaper worker in Vietnam. America will lose this battle in all but the strangest of situations.”  [EIC]

Rather than actually promoting those well-paying American manufacturing jobs, the TPP offers corporations more incentives to off shore their production in the cheapest areas possible — hardly a recipe for encouraging the hiring of American workers.

The Trans Pacific Partnership is good for bankers, tobacco companies, Big Pharma, food manufacturers, and other multi-national corporations; whether it gets us any closer to better employment numbers is highly questionable.  Whether the TPP officially enters us into the lists for another Race to the Bottom really isn’t.

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Filed under 2012 election, Bush Administration, Economy, labor, Romney