US-Mexico-Canada trade deal agreed

NAFTA is out, and a replacement North American trade deal USMCA (United States-Mexico-Canada Agreement) has just been agreed to.

Financial Post: Revamped NAFTA deal, renamed USMCA, will ‘rebalance’ North America trade after Canada reaches 11th hour agreement

Canada and the U.S. ended weeks of intense bargaining Sunday with a last-minute trade deal that gives American farmers major new access to the dairy market here, but preserves a dispute-resolution system the United States wanted killed.

The deal capped a frantic weekend of negotiations and includes several provisions to “rebalance” the North American trading relationship, a Trump administration official said in a conference call shortly before midnight.

It is to be renamed USMCA – United States Mexico Canada Agreement – after President Donald Trump said the name NAFTA had “bad connotations.”

“This is going to be one of the most important trade agreements we’ve ever had,” said another American official on the background-briefing call. “We think this is a fantastic agreement for the United States, but also for Mexico and for Canada.”

The officials highlighted in particular that the U.S. had won a “substantial” increase in access to the Canadian dairy market, and that Canada had agreed to end the “class-seven” milk program that undercut American sales of a special dried-milk product.

That concession is a “big win for American farmers,” one official said. “We’ve got a great result for dairy farmers, which was one of the president’s key objectives in these negotiations.”

But Canada appeared to score a significant victory, as well, with the U.S. agreeing to keep intact the chapter-19 mechanism for resolving disputes over anti-dumping and anti-subsidy duties, which American negotiators felt undermined the autonomy of their courts.

The U.S. has also agreed to provide an “accommodation” to protect Canada’s auto industry in case the States decides to impose tariffs on auto imports, while Canada consented to extend the patent protection for an important class of prescription drugs – called biologics – from eight to 10 years, the officials said.

Reuters Factbox: Details of the new North America free trade deal

A number of the things negotiated sound similar to what was included in and disputed in the  Trans-Pacific Partnership that Trump pulled the US out of.

 

 

Peters: Commonwealth leaders excited about trade agreement

Winston Peters has said that Commonwealth leaders are excited about a putting a 53 trade agreement together, and want to start before the United Kingdom leaves the European Union next year – but I don’t think the UK can start trade deals until they are out of the EU.

RNZ: Excitement over Commonwealth-wide free trade agreement

Foreign Affairs Minister Winston Peters is talking up the prospect of a free trade agreement between all 53 commonwealth nations after discussions in London over the weekend.

New Zealand is already working on trade agreements with Britain and the European Union as Brexit looms, but Foreign Affairs Minister Winston Peters said there was a lot of excitement at CHOGM about a possible free trade agreement between all the commonwealth nations.

He said leaders want to get started on the deal before the UK leaves the EU next March.

“There’s a whole lot of excitement about that and how we might begin to put some flesh to an idea, which was levelled two years ago, but since 23 June 2016 it’s become real and so that was very exciting.

“A whole lot of countries – without saying too much about it – realise there’s something very exciting and new about this,” he said.

That’s an odd statement – he thinks they are all excited without saying much?

It would be a big task putting a deal together with so many countries. It would need to be quite general and could be relatively limited. Otherwise there could be a lot of inter-country details to work out.

Prime Minister Jacinda Ardern said there was potential in the deal, but New Zealand’s main focus was on the EU and UK Free Trade Agreements – which represent $15 billion and $5bn in trade.

“That’s where we’re focused, but at the same time we do see there being benefit to us continuing to nudge along the fact that where we have these platforms – as we have with the East Asia summit and the Pacific Alliance – that actually the platforms provide a good starting point for a discussion around trade.”

Ardern is one leader who doesn’t seem as excited as Peters suggests, but maybe she could get absolutely excited at nudging it along.

The UK and EU agreements are expected to take years to work out, and if the main focus is on them then a Commonwealth wide agreement could take a long time – quite possibly longer than Peters is a Minister.

National Party trade spokesperson Todd McClay said he was hopeful of Commonwealth discussions, but was wary of so many players being involved.

“India hasn’t done a high-quality free trade deal with any country of the world yet, it would be really good if they would do one with New Zealand.

“I’m just a bit cautious around how much progress could be made Commonwealth-wide, because the more parties you put around a table the greater the challenges. We saw that with TPP,” he said.

Mr McClay also said any notion that a Commonwealth deal could be struck before Brexit took place was impossible.

“That’s just not going to happen – TPP with just 12 countries took nine years to negotiate, the countries were similar, the Commonwealth are very different types of economies and very different parts of the world.

“It is worth us being part of that conversation and helping to move it forward, but it can’t go before our desire for a free trade agreement with the UK and with the European Union,” he said.

It may be difficult for Peters to sustain his excitement.

Ardern meets Merkel

Prime Minister Jacinda Ardern has moved on from France to Germany to meet chancellor Angela Merkel.

RNZ: Merkel, Ardern discuss threats to world order

Prime Minister Jacinda Ardern has concluded “warm and engaging” talks with German chancellor Angela Merkel as she seeks to strengthen ties with one of the most powerful and experienced leaders in Europe.

The two leaders discussed a wide range of issues in their first meeting at the Federal Chancellery in Berlin, including the various pressures threatening the world order.

At a joint conference after the meeting, Ms Merkel said they’d discussed Brexit, the ongoing tensions with Russia and the recent military action in Syria.

“We are very grateful New Zealand has taken a very clear stance on all these issues,” she said.

Ms Ardern appeared to slightly strengthen her language on the US-led air strikes on Syria in response to a suspected chemical attack, saying she “utterly” accepted the need to respond to “a blatant breach of international law”.

“Whilst we absolutely maintain the need to – first and foremost – seek resolution through the likes of the United Nations, when that is not possible, we utterly accept the use of alternative means to address what has to be challenged.”

Ms Ardern described the German chancellor as “extremely thoughtful” and thanked her for her strong support for beginning negotiations for an EU-NZ trade deal.

In January last year, Dr Merkel pledged to push the EU to work towards a quick trade accord after meeting then-Prime Minister Bill English.

Germany’s support is important for negotiating an NZ -EU trade deal, and President Macron has also just indicated French support.

Dr Merkel was asked how the meeting had gone – to which Ms Ardern quipped, “they want to know if you found me likeable”.

Really? Cringe.

The German chancellor said the time had flown and the conversation had been fun.

“You can be proud of your Prime Minister. If you want to write this down for the New Zealand press. This will be the headline in the morning papers I trust.”

It didn’t make the RNZ headline but it waste some space in the article.

US-UK trade deal “very very quickly”

Donald Trump said that a very very big trade deal with the UK will be done very very quickly, but others are very very dubious.

“There is no country that could possibly be closer than our countries. We have been working on a trade deal which will be a very, very big deal – a very powerful deal, great for both countries – and I think we will have that done very, very quickly.”

“Prime Minister May and I have developed a very special relationship and I think trade will be a very big factor between our two countries.”

That sounds very very Trump but Theresa May was less certain.

May said she would not be sceptical about the Trump offer but remained “optimistic”.

Others were more sceptical. Thomas Bernes, who has dealt with the US in a major trade negotiation and is now a fellow at the Centre for International Governance Innovation:

“I was involved in the Canada-US trade agreement and it was extremely complicated. No one will be interested in a trade deal until you know where the UK is vis-a-vis the European Union and until that point is reached you can have plenty of goodwill but it is nothing more than that.”

“I think it is political puffery. There will be no fast US-UK trade agreement.”

The Guardian Trump expects trade deal with UK to be completed ‘very, very quickly’:

Trump’s comments are unlikely to signal any confirmed trade deal being announced soon. The US president has consistently pledged to put American interests before those of any ally countries and a UK-US deal remains a long way from being agreed.

A senior Downing street official said no date was being announced for a visit by Trump, but added: “The invitation has been extended and will be set out in due course.” They suggested there were no plans for an imminent visit.

The official described a “very good atmosphere” in a 50-minute meeting, in which a “significant proportion” was dedicated to the trading relationship.

“They agreed to prioritise work so a deal will be ready as soon as possible after Britain leaves the EU. They pledged to examine areas now where the two countries can deepen their trade relations. The president made clear he believed the UK would thrive outside the EU,” he said.

The conversation did not go into any specific detail of what a trade agreement might look like, he added, but “was talking in broad terms about the determination to get a good deal for both countries”.

Maybe Trump will just very very quickly build a trade deal and insist that the UK pay for it.

 

English meets Merkel

Bill English has met with German Chancellor Angela Merkel in the last engagement on his European trip.

NZ Herald: PM homeward bound after crucial Merkel meeting

English’s first trip as Prime Minister saw him undertake a precarious balancing act of trying to keeping onside with both the EU and the UK – without taking sides to ensure New Zealand was not trampled underfoot by either in the ensuing melee of Brexit.

English had described Germany as the “de facto leader of Europe” and Merkel’s influence is such that her say so will be critical if the New Zealand free trade agreement is to be signed in anything even close to the 2-3 year timeframe European Commission president Jean-Claude Juncker has estimated.

As with most trade deals New Zealand is unlikely to be a priority for much bigger partners.

Merkel has a lot to deal with in Germany, including an election this year, and also the very contentious immigration issues Europe and Germany are having to deal with.

The other big issue English was interested in talking to Merkel about was the migration issues in Europe – including coping with refugees which Merkel is now facing criticism over, including from US President-elect Donald Trump.

That could see Merkel seeking more help in dealing with the Syrian refugees from English – although English has previously said New Zealand was doing enough.

Although English diligently avoided criticising either the UK or the EU over Brexit, he did make it clear that the free trade deal with the EU was the priority for New Zealand’s interests – not only because it is likely to happen sooner but also because it is much larger.

English said New Zealand’s decision to follow the EU’s lead on Russia was paying off in terms of the agreement with the EU.

“If we can get a trade deal, get up and going with it and get it done in the kind of time that the Europeans are talking about, I think that would be partly because of the relationship we have built up and some of the common stance we have taken around issues like dealing with Russia.”

This illustrates what a balancing act international relations can be. New Zealand wants trade deals with all of the European Union, the UK and Russia but also needs to walk a fine line supporting or opposing other issues between the three.

I presume this trip had been arranged while John Key was still in charge, but English has dived into the deep end on his first big international trip as Prime Minister.

NZ wants post-Brexit trade deal

On his visit to Europe Prime Minister Bill English has met with his UK counterpart and says that New Zealand will seek a free trade deal with the UK as soon as possible ‘after Brexit’ (presumably after the UK has severed it’s ties with the European Union). And the UK is willing as soon as it is able to.

English is also working towards an EU trade deal.

RNZ: NZ to pursue post-Brexit trade deal

Britain is not able to sign trade deals with third countries while it remains a member of the European Union, but the British government has said it is keen to start preparatory work so agreements can be reached quickly after it leaves.

Mr English met with Mrs May in London overnight.

“We are ready to negotiate a high-quality free trade agreement with the UK when it is in a position to do so,” Mr English said at a news conference.

“We already have a strong and diversified trading relationship with the UK and a free trade agreement will build on that.”

English also met European Commission President Jean-Claude Juncker and has talked about a trade deal there.

European Commission President Jean-Claude Juncker said talks with New Zealand could be wrapped up far more quickly than is normal, perhaps in just two to three years.

At a separate briefing with reporters later on Friday, Mr English said he expected the New Zealand-EU deal to be completed before a New Zealand-Britain agreement.

That’s because there’s uncertainty about when the UK will exit the EU and how that will work out in Britain.

“It is difficult to formulate what kind of agreement we would have until it is clear what position the UK is in at the end of Brexit,” he said.

Mrs May said that while Britain remained in the EU, it would work to support an EU-New Zealand trade deal, while also making preparations for a future “bold new” bilateral agreement.

The formal process to leave the EU is scheduled to begin at the end of March but not much detail is known yet.

As Missy posted “Theresa May is expected to give a speech to outline the plan for Brexit in the next week or so”.

It didn’t just happen

A misleading Martyn Bradbury headline: That thing Key promised was unlikely to happen with the TPPA just happened

Beyond the spin that NZers would have a say about the TPPA, beyond the lies of how much money it will make us, beyond the fact it’s an American geopolitical strategy to counter China in the pacific – is the terrifying reality that the TPPA opens NZ up to foreign corporations suing us if domestic law costs them money.

Key say’s it’s unlikely to happen – it just did.

Except that it didn’t just happen under the TPPA.

The thing that is happening between Canada and the US is under the North American Free Trade Agreement and has nothing to do with the Trans Pacific Partnership Agreement, which hasn’t yet been signed or ratified and hasn’t come into effect yet.

Bradbury goes on to sort of acknowledge this…

…by signing the TPPA and having it ratified by the necessary members John Key is signing away our ability to pass domestic law without costing us millions in legal fees and opening us up to potentially massive damage claims from unscrupulous corporates.

But as we know Bradbury’s frantic ranting is hard to take seriously. He is in the ‘trade deal bad’ and ‘corporation bad’ club.

I wonder how many members of the unions who support The Daily Blog (presumably financially) owe their employment to corporations?

And I wonder how many of them owe their employment to trade deals?

I suspect the jobs of some members of the Rail and Maritime Transport Union are at least partly reliant on imports and exports that happen because of trade deals.