Wednesday, February 1, 2017

U.S. and Mexico appear to take first steps toward renegotiating NAFTA, document suggests


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The Washington Post

Ana Swanson, Joshua Partlow3 hrs ago


Then-Republican presidential nominee Donald Trump walks with Mexico President Enrique Pena Nieto in Mexico City on Aug. 31,2016.© AP Photo/Dario Lopez-Mills, File Then-Republican presidential nominee Donald Trump walks with Mexico President Enrique Pena Nieto in Mexico City on Aug. 31,2016.

The United States and Mexico appear to have taken the first steps toward renegotiating the North American Free Trade Agreement, according to a Mexican government documents, walking down a path that would fulfill one of President Trump's big campaign promises and potentially transform the hemisphere's economy.

A communique posted by Mexico's foreign and economic ministries on a government website on Wednesday said that the Mexican government had begun a series of consultations with the private sector, a process which it said would take 90 days. "The consultation in Mexico will start simultaneously with the internal process being carried out by the government of the United States," the document said.

The White House did not respond to a request for comment and officials in the U.S. Congress said they had not yet been notified of any formal action. But trade economists said the process might be tied to U.S. legislation passed under former president Barack Obama that gives the president power to quickly broker a new trade agreement. Called fast-track authority, it requires the president to notify Congress 90 days before signing a new trade agreement.

If the White House is indeed proceeding under fast-track authority, that suggests Trump could intend to scrap NAFTA altogether and forge bilateral trade deals with Mexico and Canada instead, said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics. Trump and his administration have expressed a preference for bilateral deals, which they say allow the United States to better wield its economic heft at the negotiating table.

"I think they want to retire the name NAFTA, say they got rid of it, then put it into the history books," said Hufbauer.

It's still possible, however, that the process will be terminated if the U.S., Mexico and Canada agree to terms overhauling NAFTA.

Renegotiating NAFTA was one of the major promises Trump made on the campaign trail, where he criticized the 25-year-old trade pact for hollowing out America’s manufacturing sector. The news comes as Trump reassesses America's system of trade and immigration. He has already pulled out of the Trans-Pacific Partnership, a Pacific Rim trade deal crafted by the Obama administration.

This historic shift in trade policy is likely to have wide-ranging implications for multinational companies, which have strung factories and facilities across the North America to take advantage of NAFTA’s terms. It could also portend changes for American consumers, who for decades have enjoyed cheap goods manufactured just over the border.

The specific effects on American businesses and consumers would hinge on the terms of the trade deals that replace it. But if tougher barriers to Mexican imports were to provoke retaliatory action by Mexico, the effect could be damaging to American manufacturing communities, said Hufbauer. “There would be a lot of localized pain of going down this path, and there may be some products that are suddenly more expensive than they otherwise would have been.”

For Mexico, the ultimate goal in the trade negotiations with the United States is to maintain the flow of free trade that NAFTA has created between the two countries. The United States is Mexico’s largest trading partner and the destination of 80 percent of its exports.

“We want to arrive at an agreement,” Foreign Minister Luis Videgaray told reporters on Wednesday.

Mexican officials plan to use the 90 day consultation period to meet with domestic industry leaders in farming, manufacturing, textiles, petroleum, and other sectors, to see what aspects of NAFTA could be improved. The discussions will be coordinated by the secretary of the economy.

“This gives us a very solid preparation to enter the dialogue once the 90 days passes,” Videgaray said.

At the same time, Mexico is also looking to expand trade ties with other countries, in case trade with the United States gets restricted. Mexican officials have already begun talks with Argentina and Brazil, and are interested in discussions with Malaysia, Australia, Singapore and others.

Trump has already clashed publicly with Mexican President Enrique Peña Nieto. Following a spat on social media on Jan. 26 over who would pay for Trump’s border wall, Nieto called off a scheduled visit to Washington the following week. The next day, Trump and Nieto discussed the U.S.-Mexico relationship by phone for an hour.

During the campaign, Trump announced his intention to renegotiate the sweeping trade deal between the United States, Canada and Mexico on his first day in office.

"If I win, day one, we are going to announce our plans to renegotiate NAFTA," he told a crowd in Greensboro, N.C., in October.

Influential in the negotiations are likely to be two men who are not yet confirmed for their positions: Commerce Secretary nominee Wilbur Ross and Trump's pick for the U.S. Trade Representative, Robert Lighthizer.

NAFTA became a divisive issue in the 2016 campaign, as critics on both the left and the right disparaged it for siphoning off good-paying American manufacturing jobs. Trump repeatedly criticized former President Bill Clinton’s role in negotiating NAFTA, calling it “the worst trade deal maybe ever signed anywhere.”

Economists have generally disagreed, or expressed more nuanced concerns. In a panel of 41 prominent economists surveyed in 2012 by the University of Chicago, 85 percent agreed or strongly agreed that Americans were better off under NAFTA than previously existing trade rules among the U.S., Canada and Mexico, while only 5 percent said they were uncertain. None disagreed with the statement.

More recent research by John McLaren of the University of Virginia and Shushanik Hakobyan of Fordham University has shown that blue-collar workers in industries most affected by NAFTA had lower wage growth over the 1990s compared with other workers. The study concluded that the overall impact of NAFTA on American wages was small, but heavily concentrated in some communities.

The trade pact dates to 1992, when President George H.W. Bush negotiated it in his final year in office. Congress approved the deal the next year under Clinton, and it finally took effect in 1994, establishing an unprecedented free-trade zone across North America.

Over the next decade, the flow of goods and services between the U.S. and Mexico more than quintupled.

By reducing barriers to trade, the deal aimed to knit the countries of North America closer together and expand their economies. It also specifically aimed to help the struggling Mexican economy. By raising the standard of living, many supporters argued the deal would cut down on illegal immigration from Mexico to the United States.

In his criticism of trade deals, Trump has formed an unusual alliance with labor-friendly figures on the political left. Former Democratic presidential candidate Bernie Sanders has said he hoped “very much that President Trump will come on board and work with us as we revamp in a very fundamental way our trade policies.”

Republicans, however, have been more traditional defenders of open trade. who have traditionally viewed free trade as a driver of economic growth. “As I frequently tell my friends in Mexico, we can't get a divorce. We need to figure out how to make this marriage work," Senate Majority Whip John Cornyn (R-Tex.) told CNN recently.

Trump does not require Congressional approval to exit NAFTA. Article 2205 of the agreement allows any party to withdraw six months after providing written notice to the other parties. Trump would have to take additional steps to raise tariffs on imports from those countries.

Ross echoed the need to renegotiate the deal in his Senate confirmation hearing on Jan. 18. He criticized the deal for its weak enforcement on environmental and labor standards, and said that NAFTA was “logically the first thing” for the Trump administration to work on.

“All aspects of NAFTA will be put on the table,” Ross said.

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Trump golf club must pay $5.77 million to former members: judge

By Jonathan Stempel

(Reuters) - A federal judge in Florida on Wednesday directed a golf club owned by U.S. President Donald Trump to pay $5.77 million to former members who claimed it wrongfully refused to refund their deposits after Trump took over in 2012.

U.S. District Judge Kenneth Marra in West Palm Beach said Trump National Golf Club Jupiter must repay $4.849 million plus $925,010 of interest to 65 former members for breach of contract, following a non-jury trial last August.

Marra said the club had no right to keep the deposits after locking out members who had declared their plans to resign prior to Trump's purchase in November 2012.

Before Trump took over, the club had permitted members who wanted to resign to keep playing golf until their replacements were found.

But Trump changed the rules, declaring in a letter that "as the owner of the club" he did not want such members to use the club, and telling them "you're out."

Marra, however, said this deprived the plaintiffs of their "continuing right" to use the club until new members joined.

"By categorically denying class members all rights to club access because they remained on the resignation waiting list as of December 31, 2012, defendant revoked or canceled their memberships," and should have refunded their deposits, he said.

The Trump Organization said in a statement that it disagreed with the decision and will appeal.

"At the time Trump purchased the club, it was suffering financially, making it unlikely that these members would ever get back their deposits," it added.

Brad Edwards, a lawyer for the plaintiffs, said in an interview that "our clients are thrilled that they are getting exactly what they deserve."

He added: "I think President Trump is going to respect this judgment."

In a footnote, Marra noted that Trump was a "private citizen" at all times relevant to the lawsuit, and that he would refer to Trump as such in the decision.

"In doing so, the court means no disrespect to him or to the esteemed position he now holds," wrote Marra, an appointee of former President George W. Bush.

The case is Hirsch et al v. Jupiter Golf Club LLC et al, U.S. District Court, Southern District of Florida, No. 13-80456.

(Reporting by Jonathan Stempel in New York; editing by Bill Rigby)

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Trump and the Koch Brothers—Where are they now?



border tax

Billionaire Koch Brothers Launch Effort to Kill Republican Border Tax Plan


Jan 30, 2017

Billionaire industrialist Charles Koch is launching a campaign to sink a border tax under consideration by Republican leaders in Congress, a move that could complicate the lawmakers' efforts to find a way to pay for President Donald Trump's proposed wall on the U.S. border with Mexico.

Americans for Prosperity, a conservative political advocacy group founded by Charles Koch and his brother David, plans to use its network of wealthy political donors and activists to kill the proposal, which aims to raise $1.2 trillion over 10 years on goods coming into the United States, according to officials from the group, which gathered this weekend for a conference.

Republican House of Representatives Speaker Paul Ryan is pushing the tax as part of a broader overhaul of the U.S. tax code.

The White House has given mixed signals on whether Trump supports the approach, but proponents say revenue collected from the border tax could finance Trump's drive to build a wall along the southwestern U.S. border. Proponents also say it would discourage U.S. manufacturers from moving abroad.

On Thursday, AFP sent a letter expressing its opposition to the border tax to a House panel in charge of writing tax legislation.

AFP Chief Executive Officer Luke Hilgemann, in an interview, called the measure "a massive tax increase" on U.S. consumers, who would pay more for foreign goods. He urged Ryan to "go back to the drawing board."

AFP and its offshoot organizations have become a powerful force in U.S. politics, bolstering candidates and issues on federal and state levels.

Besides defying Republican leaders on the border tax, the Koch-led organization on Sunday challenged Trump on a policy he implemented on Friday to stop the movement of people from countries with large Muslim populations from traveling to the United States.

"The travel ban is the wrong approach and will likely be counterproductive," said an official of the Koch network.

Koch refused to endorse Trump during his presidential campaign, differing with the candidate over his positions on immigration and trade policy, and his practice of singling out companies for possible retribution if they move jobs abroad.

Nevertheless, Hilgemann said AFP had a "developing relationship" with the Trump White House, which he said had reached out to his organization to discuss some policy matters.

At the same time, former AFP officials have landed high-level jobs in the Trump administration, giving the group a conduit for airing its policy wishes.

Looking toward the 2018 congressional and gubernatorial elections, AFP officials said they planned to boost the network's spending on policy and political activities to between $300 million and $400 million, up from an estimated $250 million for the 2016 campaigns.

Hilgemann also said AFP was laying plans to mobilize activists to help win Senate confirmation of Trump's pick for the Supreme Court nominee. The White House said Trump was planning this week to announce his pick to replace the late Justice Antonin Scalia

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Think the liberal protests are big? Just wait.



Think the liberal protests are big? Just wait.

Protesters rallied at O'Hare International Airport on Jan. 28, 2017, after travelers were held, including those with green cards and visas, following President Donald Trump's executive orders on immigration. (Chris Sweda / Chicago Tribune)

Eric ZornEric Zorn

White House chief of staff Reince Priebus noted Sunday that the huge protests at some of the nation's airports over the weekend were out of proportion to the practical effect of President Donald Trump's executive order on immigration.

"The fact of the matter is 325,000 people from foreign countries came into the United States" on Saturday, Priebus told NBC's "Meet the Press" host Chuck Todd. "And 109 people were detained for further questioning."


That number grew slightly by the end of the day, but reflected a general truth that ought to be sobering for the administration — the vast majority of protesters didn't know the detainees and didn't have friends or family connected to one of the seven predominantly Muslim nations targeted in the crackdown on immigrants and refugees.

They descended by the thousands on international terminals coast to coast mostly to raise alarm on behalf of strangers and to object to the abdication of key American values that a ban on refugees represents.

Similarly, none of the millions who marched and rallied for women's rights the previous weekend had yet lost anything or suffered a single deprivation on account of Trump. How could they have? He'd been president for only one day.

In other words, most of the anti-Trump protests so far have been over symbolism and omens.

So just imagine what's going to happen if or when the largely hypothetical becomes real and the abstract becomes personal.

•If or when the numbers of people turned away from our borders, detained or deported grows from the hundreds into the tens of thousands.

•If or when millions of people lose their health insurance policies after Obamacare is repealed.

•If or when Roe v. Wade is overturned and states begin outlawing abortion.

•If or when we begin to go backward on LGBTQ rights and anti-gay discrimination is enshrined as a religious right.

Protesters rally against Trump's immigration ban

President Donald Trump's sweeping executive order to suspend refugee arrivals and impose tough controls on travelers from seven predominantly Muslim countries was met with protests at U.S. airports. 

•If or when prices or taxes rise to pay for an unnecessary border wall between the U.S. and Mexico and for Trump's misbegotten trade wars.

•If or when public education begins to disappear in major urban centers.

•If or when strict voter-ID laws, with their racially discriminatory effects, sweep the red states.

If any of the above hypotheticals become reality, these recent protests will seem quaint in comparison.

I wouldn't go so far as to call this the Liberal Spring, but make no mistake: After eight, sleepy, nearly torpid years of hoping that President Barack Obama and his wealthiest supporters would protect their interests, members of the left — progressives, Democrats — have awakened with a roar.

Critics complained that the Women's March on Washington was incoherent and diffuse, an airing of various concerns without an identifiable set of demands. Actually, though, the message of those rallies was quite clear: We're not cowering in the face of the Trump agenda. We're determined, we're energized and when Trump crosses the line, we'll be right back out here with demonstrations that'll make those tea party rallies of 2010 look like Tuesday morning gatherings at the dog park.

Don't miss the idealism. Many of the marchers, like many of the airport protesters, don't feel directly threatened by Trumpism. They're straight, white people of some means who have decent health insurance and probably won't be alive long enough to be mortally sickened by the poisonous air and water in a deregulated America.

These protesters organized, made signs, traveled and took time out of their lives to make a show of their beliefs on behalf of others now that they've been poked by Trump's statements and his early moves in the White House.

After ineptly playing defense and squabbling internally during Obama's two terms, the left is back on offense, angry and activated.

The evidence is not just in the crowds and first-time protesters. The American Civil Liberties Union reported taking in $24.2 million in online donations over the weekend, more than six times the total of online donations the organization usually gets in an entire year!

And the real action, the real outrages, haven't even really started.

Trump likes to talk about leading a "movement" because he galvanized just enough disillusioned, credulous voters to eke out a victory in the Electoral College over an opponent nearly as unpopular as he is.

But he's about to see what a real movement looks like.

Twitter @EricZorn

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