New USMCA Bad deal for Mexico and Canada


By Alfredo Jalife-Rahme

Trump and the Democrats despite their fierce internal differences converged in renegotiating the controversial USMCA “T-MEC in Mexico” to the detriment of Mexico and Canada, who had no choice but to assimilate the changes. The surreptitious veto to China was firmer than ever. Mexico and Canada are crushed in the digital sector: a total victory for Silicon Valley!

For some reason in Mexico, the T-MEC has received greater resonance in its automotive industry — and economy of the early twentieth century with Henry Ford — and almost no one touches on the issue of near technological apartheid — an economy of the twenty-first century — that the country suffers in front of the giants of Silicon Valley – Google , with 931,000 million dollars, Amazon , with 873,030 million, Facebook , with 561,420 million, Apple , with 1.21 billion, Twitter , with 23.520 million, Microsoft , with 1.17 billion, and Netflix , with 130,790 million—, who together have a market capitalization at today’s cash cut of almost five billion.

Andrés Manuel López Obrador, President of Mexico

They represent almost four times the nominal GDP of Mexico (1.274.175 billion) when the stock exchanges soared both by the imminent trade agreement in its first phase between Trump and China and by the triumph of Boris Johnson – Trump’s great ally -, who will accelerate brexit and the breakup of the United Kingdom with the European Union.

Unfortunately, in Mexico, the neoliberal villager sector with a host of geniuses such as the two negotiators Luis Videgaray and Ildelfonso Guajardo – who were part of Enrique Peña’s outgoing cabinet – literally signed everything in the initial T-MEC to favor the US more than Mexico. They remain anchored in the mentality of the expired comparative advantage that Anglo-Israeli economist David Ricardo, who was a vulgar gambler, drove. Mexican neoliberal signatories do not understand that the 21st century is already digital and that whoever dominates artificial intelligence will control the world, as Vladimir Putin said.

Jamie Powell of the Financial Times said exactly one year ago that the big winner of the T-MEC was “the technology giants of Silicon Valley.” The initial version of the T-MEC – renamed by Trump for electoral purposes instead of the NAFTA a quarter of a century ago – was reformulated these days with a tripartite signature that was supervised by Jared Kushner, Trump’s controversial son-in-law.

The flags of Canada, Mexico and the USA

According to Jamie Powell in his ominous chapter 19 on “digital commerce,” it gives “keys to those who harvest, and therefore benefit most from the data (the large US technology groups) when” no party will restrict cross-border transfer. of information, including personnel, by electronic means if this activity is to conduct the business of an undercover person. “

It should be noted that with these unilateral digital attributions the information of the big data of health will remain in the custody of the giants of Silicon Valley who, in turn and in recent dates, have agreed to give control of artificial intelligence to the Pentagon.

Both Canada and Mexico – very late in that area – leave the intimate data of their citizens unprotected and have never dared to invoke the sovereignty of the genetic code of their nationals when they do not even protect tout court sovereignty.

Powell quotes the Canadian consultant and former official Dan Ciuriak, who states that “the data economy is not aimed at creating competitive markets” when the T-MEC constitutes a “total concession” since the problem is not in what is given in this moment, but in the economic future that has been granted.

What happens

Already beaten Mexico and Canada in the digital sector – the true economy of the 21st century – it is worth reviewing the review by Heather Long of The Washington Post. The triumph of the United States, coupled with Republicans and Democrats despite the start of an impeachment dislocated against Trump. This now prepares its classic vindictive revolutions. The new version of the T-MEC of Republicans and Democrats highlights intellectual property, big data and environmental and labor protections, also to the detriment of Canada and, above all, of Mexico.

The final copy of the T-MEC, details missing ignored known as Long Heather. Large changes were generated in the automotive sector: “To qualify for a zero rate, a vehicle must have 75% of its manufactured components” in any of the three countries, which means an abrupt “increase in the current requirement of 62.5% “when” 30% of the work done by the workers must earn $ 16 an hour “.

In 2023, that is, in three years, 30% should be increased to 40%. Mexico also emerges here as the big loser, don’t say Canada .”Great changes for Mexican workers”: it is required that “Mexico change its laws to facilitate the unionization of workers”, which although it is beneficial for the Mexican worker, seen in its encapsulated niche, “will make it less attractive for the US companies move south. ”

What’s more: Mexican trucks that cross the US border “must comply with higher safety regulations.” Will the fight against the once-permissive transport of narcotics be implicit in this stipulation? The US Democrats, whom many Mexican senators idolize, were exaggeratedly strict with Mexico by demanding a formal committee to monitor Mexico on labor issues, such as labor attachés – the equivalent of diplomatic attachés – installed in Mexico according to a sheet The work of Representative Richard E. Neal (Democrat of Massachusetts and head of the powerful Committee on Ways and Means (House Committee on Ways & Means) to such an extent that Mexico can be subject to “punitive measures.”

Corn kernels
This is the ‘Trojan horse’ that hides the T-MEC and puts Mexican corn in check

Heather Long proclaims “Trump’s triumph over Canada, which is forced to open its dairy market to US farmers.” The only item where the Democrats obtained concessions against the Republicans was in the disappearance of the 10-year grace of “intellectual property protection” of biological drugs.

To compensate, the new chapter on intellectual property contains in its more than 60 extensive pages “more rigorous protections for patents and trademarks that include biotechnology, financial services, and domain names”. Another item in which Canada and Mexico are beaten.

“Environmental protections” are increased by another 30 pages, where “Mexico agrees to improve monitoring to curb illegal fishing.” Apart from the reformulated T-MEC, the US signed parallel letters that allow Canada and Mexico to mostly avoid vehicle rates by Trump.

The only relatively symbolic concession granted by the United States is to form a tripartite panel of representatives to challenge anti-dumping measures in order to offset tariffs.

Donald Trump, president of the United States

hapter 11 – which gave investors “a special way to combat government decisions” – is “eliminated entirely for Canada and mostly for Mexico” in order to avoid the judicial system.

According to Heather Long, the part that was preserved from chapter 11 exclusively for Mexico is in reference to oil in order to “challenge the Mexican government if it changes the rules and tries to nationalize its energy sector again .” Any attempt to renationalize Mexican strategic oil is de facto vetoed.

The negotiators of Mexico and Canada exhibited an anachronistic nineteenth-century steel mentality and ended up buying digital mirages with the medieval mirrors sold by the US Democrats and Republicans reconciled against them.

Alfredo Jalife-Rahme
Geopolitics and globalization analyst. 
Columnist and commentator in several international newspapers, radios and televisions. 
Postgraduate professor at the National Autonomous University of Mexico (UNAM) in Geopolitics and Globalization. 
Author of several books. 
Named by the Voltaire Network of France as ‘The main geopolitologist in Latin America’.

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