TPM World News

SINGAPORE (AP) — President Donald Trump plans to depart early from his unprecedented summit with Kim Jong Un, the White House said Monday, declaring that nuclear talks with North Korea have moved “more quickly than expected.”

Trump had been scheduled to fly back to Washington on Wednesday morning after spending Tuesday with the North Korean leader in Singapore. But on the eve of the summit, he altered his schedule, opting to return at about 8 p.m. on Tuesday after a full day of meetings with Kim — almost 15 hours earlier than previously anticipated.

“The discussions between the United States and North Korea are ongoing and have moved more quickly than expected,” the White House said in a statement.

It wasn’t immediately clear what specific progress, if any, had been made in preliminary discussions between U.S. and North Korean officials in the run-up to the Tuesday summit. In fact, only hours before the White House announcement, U.S. Secretary of State Mike Pompeo had seemed to lower expectations for the meeting, which Trump had earlier predicted could potentially yield an on-the-spot deal to end the Korean War.

“We are hopeful this summit will have set the conditions for future successful talks,” Pompeo said on Monday evening.

The summit — the first ever between a sitting American president and North Korea’s leader — was to kick off at 9 a.m., the White House said. After greeting each other, the two leaders planned to sit for a one on one meeting that a U.S. official said could last up to two hours, with only translators joining them. The official wasn’t authorized to discuss the plans and insisted on anonymity.

The White House said the daylong summit would also include a working lunch and a larger meeting involving aides to both leaders. On the U.S. side, Trump was to be joined by Pompeo, chief of staff John Kelly, national security adviser John Bolton and U.S. Ambassador to the Philippines Sung Kim, along with a few others.

Before flying home, Trump planned to speak to reporters in Singapore after concluding the summit, the White House said.

The last-minute change of schedule came as both sides finalized preparations for the meeting. Trump on Monday forecast a “nice” outcome, while Kim spent the day out of view.

Read More →

WASHINGTON (AP) — President Donald Trump took more swipes at Canada and its prime minister over trade issues as he settled in for a summit with North Korea in Singapore, contending that “Fair Trade is now to be called Fool Trade if it is not Reciprocal.”

Trump roiled the weekend Group of Seven meeting in Canada by agreeing to a group statement on trade only to withdraw from it while flying to Asia. He complained that he had been blindsided by Canadian Prime Minister Justin Trudeau’s criticism of his tariff threats at a summit-ending news conference. In tweets, Trump insulted Trudeau as “dishonest” and “weak.”

The attack on a longtime ally and its leader drew sharp criticism. German Chancellor Angela Merkel, who also attended the summit, told German public television that she found Trump’s tweet disavowing the G-7 statement “sobering” and “a little depressing.” She also said the European Union would “act” against the U.S. trade measures.

Unbowed, Trump tweeted anew Monday morning from Singapore, repeating his criticism of U.S. trade policies with Canada — he also took aim at Germany — in a multi-tweet rant that went beyond 200 words all told. At one point he wrote, “Justin acts hurt when called out!”

“Why should I, as President of the United States, allow countries to continue to make Massive Trade Surpluses, as they have for decades, while our Farmers, Workers & Taxpayers have such a big and unfair price to pay?” he tweeted.

Trump advisers had taken up the attack in appearances on Sunday’s news shows, leveling more withering and unprecedented criticism against Trudeau, branding him a back-stabber unworthy of Trump’s time.

“There’s a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door,” Trump trade adviser Peter Navarro said on “Fox News Sunday.”

Navarro said Trump “did the courtesy to Justin Trudeau to travel up to Quebec for that summit. He had other things, bigger things, on his plate in Singapore. … He did him a favor and he was even willing to sign that socialist communique. And what did Trudeau do as soon as the plane took off from Canadian airspace? Trudeau stuck our president in the back. That will not stand.”

Trump’s top economic adviser, Larry Kudlow, suggested Trump saw Trudeau as trying to weaken his hand before the summit with North Korea’s Kim Jong Un, saying the president won’t “let a Canadian prime minister push him around. … Kim must not see American weakness.” Trudeau pulled a “sophomoric political stunt for domestic consumption” that amounted to “a betrayal,” said Kudlow, who appeared on CNN’s “State of the Union” and CBS’ “Face the Nation.”

In response to the initial tweets critical of her country and prime minister, Canada’s foreign minister, Chrystia Freeland, said her nation “does not conduct its diplomacy through ad hominem attacks.”

Trudeau, who had said at the news conference that Canada would retaliate for new U.S. tariffs, didn’t respond to questions about Trump when the prime minister arrived at a Quebec City hotel Sunday for meetings with other world leaders. Freeland later told reporters that “we don’t think that’s a useful or productive way to do business.”

A Trudeau spokesman, Cameron Ahmad, said Saturday night that Trudeau “said nothing he hasn’t said before — both in public and in private conversations” with Trump.

And Roland Paris, a former foreign policy adviser to Trudeau, jabbed at Trump on Twitter: “Big tough guy once he’s back on his airplane. Can’t do it in person. … He’s a pathetic little man-child.”

Trudeau said he had reiterated to Trump, who left the G-7 meeting before it ended, that tariffs would harm industries and workers on both sides of the U.S.-Canada border. Trudeau told reporters that imposing retaliatory measures “is not something I relish doing” but that he wouldn’t hesitate to do so because “I will always protect Canadian workers and Canadian interests.”

The Americans’ criticism of Trudeau left a former Canadian prime minister, Stephen Harper, stumped. “I don’t understand the obsession with trade relations with Canada,” he said on Fox’s “Sunday Morning Futures,” given that Canada is the biggest single buyer of American goods and services in the world. From promoting democracy and to fighting terrorism, “we’re on the same page. We’re the closest partners in the world and you don’t want to see a dispute over one particular issue poison everything.”

Trudeau had said Canadians “are polite, we’re reasonable, but also we will not be pushed around.” He described all seven leaders coming together to sign the joint declaration despite having “some strong, firm conversations on trade, and specifically on American tariffs.”

In the air by then, Trump tweeted: “Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!”

He followed up by tweeting: “PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, “US Tariffs were kind of insulting” and he “will not be pushed around.” Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!”

Read More →

SINGAPORE (AP) — President Donald Trump cast his Tuesday summit with North Korea’s Kim Jong Un as a “one-time shot” for the autocratic leader to ditch his nuclear weapons and enter the community of nations, saying he would know within moments if Kim is serious about the talks.

Trump said Saturday he was embarking on a “mission of peace,” as he departed the Group of Seven meeting in Canada to fly to the summit site in Singapore. Saying he has a “clear objective in mind” to convince Kim to abandon his nuclear program in exchange for unspecified “protections” from the U.S., Trump acknowledged that the direction of the high-stakes meeting is unpredictable, adding it “will always be spur of the moment.”

“It’s unknown territory in the truest sense, but I really feel confident,” he told reporters. “I feel that Kim Jong Un wants to do something great for his people and he has that opportunity and he won’t have that opportunity again.”

“It’s a one-time shot and I think it’s going to work out very well,” he said.

The meeting will be the first between a sitting U.S. president and a North Korean leader. Unlike traditional summits between heads of state, where most of the work is completed in advance of a photo-op, U.S. officials say the only thing certain ahead of these talks will be their unpredictability.

Raising expectations in advance of the meeting, Trump said the outcome will rely heavily on his own instincts. The U.S. president, who prides himself on his deal-making prowess, said he will know “within the first minute” of meeting Kim whether the North Korean leader is serious about the nuclear negotiations.

“I think I’ll know pretty quickly whether or not, in my opinion, something positive will happen. And if I think it won’t happen, I’m not going to waste my time. I don’t want to waste his time,” Trump said.

“This is a leader who really is an unknown personality,” Trump added of Kim. “People don’t know much about him. I think that he’s going to surprise on the upside, very much on the upside.”

The Kim sit-down comes as Trump’s international negotiating skills have faced their toughest tests to date with mixed results. Tensions flared at the G-7 summit between Trump and U.S. allies over his protectionist economic policies and decisions to exit the Iran nuclear deal and Paris climate accord.

Trump rated his relationships with U.S. partners as “a 10,” though erstwhile allies spent much of the weekend directly challenging Trump’s policy positions.

As he looks to the Kim meeting, Trump is taking a high-stakes risk in hopes of containing the increasingly challenging national security threats from North Korea’s advanced nuclear and ballistic missile programs. Seeing Nobel Peace Prize laurels and eyeing potential to show up his critics at home and abroad, Trump is granting Kim the international legitimacy he’s long sought in hopes of securing a legacy-defining accord.

“He could take that nation with those great people and truly make it great,” Trump said. “That’s why I feel positive, because it makes so much sense.”

Trump also praised the North Koreans, saying they have been “really working very well with us” during preparations for the summit, even though Trump had canceled the summit last month following a recent period of what he called “tremendous anger and open hostility” from the North Korean government. But then Trump did a quick pivot, signaling almost immediately after scrapping the meeting that he was open to going ahead with it after all.

Delegations from both countries then launched into a frenetic period of negotiations that are expected to culminate with Tuesday’s meeting.

“So far, so good. We’re going to have to see what happens. I very much look forward to it,” Trump said.

Still, questions remain about what a deal on the North’s nuclear weapons could look like.

Trump has said he believes Kim would agree to denuclearization — and Secretary of State Mike Pompeo said Thursday he had received Kim’s personal assurances to that effect — but the two countries have offered differing visions of what that would entail. Despite Kim’s apparent eagerness for a summit with Trump, there are doubts that he would fully relinquish his nuclear arsenal, which he may see as his guarantee of survival.

U.S. defense and intelligence officials have assessed the North to be on the threshold of having the capability to strike anywhere in the continental U.S. with a nuclear-tipped missile — a capacity that Trump and other U.S. officials have said they would not tolerate.

Trump reiterated his promise Saturday that the U.S. “will watch over and we’ll protect” Kim and his government in return for him giving up the nuclear program. He also indicated that South Korea, China and Japan would be prepared to invest in the North to boost its besieged economy.

___

Lucey reported from La Malbaie, Quebec. Associated Press writer Darlene Superville in Washington contributed to this report.

Read More →

LA MALBAIE, Quebec (AP) — President Donald Trump delivered a stern warning on trade to foreign countries at the Group of Seven summit on Saturday, advising trading partners not to retaliate against U.S. tariffs on the imports of steel and aluminum. “If they retaliate, they’re making a mistake,” Trump declared.

Trump told reporters he pressed for “fair and reciprocal” trade practices at the G-7 meeting in Canada, urging his foreign counterparts to eliminate all tariffs, trade barriers and subsidies in their trading practices. The president has been at odds with key allies over the new tariffs, which dominated his talks with the leaders of major industrialized nations in the Canadian resort town. In addition to the U.S. and Canada, the group includes Britain, Italy, France, Germany and Japan.

The president said the U.S. was “pretty close” to reaching an agreement on the North American Free Trade Agreement with Canada and Mexico and had discussed two types of sunset provisions in which any of the countries could leave the deal. Trump said the final outcome would lead either to a better agreement on NAFTA or separate trade deals with both Canada and Mexico.

Shortly before his arrival at the two-day summit, Trump injected additional controversy by suggesting that the G-7 offer a seat at the table to Russia, which was ousted from the group after it annexed Crimea in 2014. The president said Saturday that re-admitting Russia to the elite club would be “an asset,” telling reporters, “we’re looking for peace in the world.” Trump said he had not spoken with Russian President Vladimir Putin in a while.

Trump was departing the Canadian summit several hours early, heading to Singapore for his summit with North Korea’s Kim Jong Un on what he called a “mission of peace.”

Read More →

VATICAN CITY (AP) — Pope Francis told world oil executives Saturday that the transition to less-polluting energy sources “is a challenge of epochal proportions,” and warned that the satisfying the globe’s energy needs “must not destroy civilization.”The Vatican says the two-day conference with oil executives was meant as a follow-up to the pope’s encyclical three years ago calling on people to save the planet from the ravages of climate change and other environmental ills.

Participants included the CEOs of Italian oil giant ENI, British Petroleum, ExxonMobil and Norway’s Statoil as well as scientists and managers of major investment funds. Their remarks on the first day of the closed-door conference were not released by the Vatican.

While Francis lauded the oil executives for embedding an assessment of climate change risks into their planning strategies, he also put them on notice for their “continued search for fossil fuel reserves,” 2½ years after the Paris climate accord “clearly urged keeping most fossil fuels underground.”

“Civilization requires energy, but energy must not destroy civilization,” he implored.

Energy experts and those who advocate fighting climate change expressed doubts before the conference that it would amount to anything other than a PR opportunity for the companies to burnish their image without making meaningful changes.

In his remarks, the pope said he hoped the meeting gave participants the chance to “re-examine old assumptions and gain new perspectives.”

Francis said that modern society with its “massive movement of information, persons and things requires an immense supply of energy.” And still, he said, as many as one billion people still lack electricity.

The pope said meeting the energy needs of everyone on the planet must be done in ways “that avoid creating environmental imbalances, resulting in deterioration and pollution that is gravely harmful to our human family, both now and in the future.”

Frances also recalled his own appeal in the “Laudato Si” encyclical for an energy policy “aimed at averting disastrous climate changes that could compromise the well-being and future of the human family, and our common home.” That includes transitioning to efficient, clean energy sources.

“This is a challenge of epochal proportions,” he said Saturday. “At the same time it is an immense opportunity to encourage efforts to ensure fuller access to energy by less developed countries … as well as diversifying energy sources and promoting the sustainable development of renewable forms of energy.”

The pope called for a “long-term global strategy to provide energy security,” along with “precise commitments” to tackle the challenge of climate change.

He said it was “disturbing and a cause for real concern” that the levels of carbon dioxide emissions and the concentrations of greenhouse gases remain high despite commitments taken in the 2015 Paris accord to fight global warming.

He urged participants to use their “demonstrated aptitude for innovation” to address “two of the great needs in today’s world: the care of the poor and the environment.” He noted that the poor pay the highest price for climate change, often being forced to migrate due to water insecurity, severe weather and an accompanying collapse in agriculture.

“The transition to accessible and clean energy is a duty that we owe toward millions of our brothers and sisters around the world, poor countries and generations yet to come,” the pope said.

Read More →

WASHINGTON (AP) — The United States has pulled two more of its workers out of Cuba and are testing them for possible brain injury, three U.S. officials told The Associated Press on Friday, amid concerns they may have been affected by the mysterious health incidents harming U.S. diplomats in Cuba and China.

The two individuals are considered “potentially new cases” but have not yet been “medically confirmed,” a State Department official said. Two other officials said the individuals have been brought for testing to the University of Pennsylvania, where doctors have been evaluating, treating and studying Americans affected in Cuba last year as well as new potential cases from a U.S. consulate in China.

The officials were not authorized to comment publicly on the matter and spoke on condition of anonymity.

So far there are 24 confirmed patients affected by the bizarre incidents, first disclosed last year, that have been deemed “specific attacks” by the U.S. government. The United States has said it doesn’t know who is behind it, but has argued Cuba is responsible for protecting all diplomats on its soil.

Until Friday, the most recent suspicious incidents disclosed by the U.S. had been in August 2017, leading many to suspect they had stopped.

The two new individuals removed from Cuba were medically evaluated in just the past few weeks, two officials said.

The confirmed Cuba patients have been found to have a range of symptoms and diagnoses including mild traumatic brain injury, also known as concussions. Unexplained sounds and vibrations that accompanied the symptoms initially led investigators to suspect a sonic weapon, although an interim FBI report in January said no evidence had been uncovered that sound waves could have damaged the Americans’ health, The Associated Press reported.

The potential new cases come as the U.S. has being issuing health alerts to Americans in China after a worker at the U.S. Consulate in Guangzhou reported symptoms and strange sounds and was flown to the U.S. That worker was then medically confirmed to have “suffered a medical incident consistent with what other U.S. government personnel experienced in Havana, Cuba,” the State Department has said.

The department has sent a medical team to Guangzhou to offer medical screenings to all American government workers and family members who want them. The team arrived late last week and has started evaluating Americans.

Of the roughly 170 American consulate staffers and family members in Guangzhou, about 150 sought the offered preliminary medical examinations, according to officials familiar with the process. The officials stressed that some of them may not have experienced any symptoms and were having the tests done protectively. Although the vast majority of them were cleared, eight people were referred to the University of Pennsylvania for additional testing, the officials said.

The U.S. diplomatic presence in China is large with representatives from 33 different federal agencies employed at the embassy in Beijing and the five consulates on the mainland: Chengdu, Guangzhou, Shanghai, Shenyang and Wuhan. As of May 2017, when the State Department inspector general’s office conducted its last inspection of the missions in China, almost 900 Americans worked at them, including 168 who were hired locally.

Read More →

WASHINGTON (AP) — The United States and China have reached a deal that allows the Chinese telecommunications giant ZTE Corp. to stay in business in exchange for paying an additional $1 billion in fines and agreeing to let U.S. regulators monitor its operations.

The fine announced Thursday comes on top of $892 million ZTE has already paid for breaking U.S. sanctions by selling equipment to North Korea and Iran. The Commerce Department said that ZTE must also put $400 million in escrow — a sum that it would forfeit if it violated Thursday’s agreement.

In addition, a compliance team chosen by the United States will be embedded at ZTE and the Chinese company must change its board and executive team.

President Donald Trump has drawn fire from Congress for intervening in the case to rescue a Chinese company that had violated U.S. sanctions against two rogue nations that have been pursuing nuclear weapons programs.

“ZTE is essentially on probation,” said Amanda DeBusk, chair of the international trade and government regulation practice at Dechert LLP and a former Commerce official. “It’s unprecedented to have U.S. agents as monitors … It’s certainly a good precedent for this situation. ZTE is a repeat offender.”

In April, the Commerce Department barred ZTE from importing American components for seven years, having concluded that it deceived U.S. regulators after it settled charges last year of sanctions violations: Instead of disciplining all employees involved, Commerce said, ZTE had paid some of them full bonuses and then lied about it.

The decision amounted to a death sentence to ZTE, which relies on U.S. parts and which announced that it was halting operations. The ban also hurt American companies that supply ZTE.

Trump barged into the ZTE case last month by tweeting that he was working with President Xi Jinping to put ZTE “back in business, fast” and save tens of thousands of Chinese jobs. He later tweeted that the ZTE talks were “part of a larger trade deal” being negotiated with China.

Trump has drawn criticism from members of Congress for going easy on the Chinese company. Democratic Sen. Chuck Schumer of New York immediately responded to Thursday’s announcement: “Despite his tough talk, this deal with ZTE proves the president just shoots blanks.”

Still, the resolution of the ZTE case may clear the way for the United States to make progress in its trade talks with China. The two countries have threatened to impose tariffs on up to $200 billion worth of each other’s products in a dispute over China’s tactics to supplant U.S. technological supremacy, including demands that U.S. companies hand over trade secrets in exchange for access to the Chinese market.

Thursday’s agreement was “a prerequisite for making broader progress,” DeBusk said. “The ZTE case was a thorn in the side for China … For the U.S. to shut down one of China’s largest companies is a very dramatic type of move. It certainly got their attention.”

Read More →

WASHINGTON (AP) — The United States has evacuated several more government workers out of the southern Chinese city of Guangzhou after medical testing revealed they might have been affected by unexplained health incidents that have already hurt U.S. personnel in Cuba, the State Department said Wednesday.

State Department spokeswoman Heather Nauert said “a number of individuals” have been brought to the U.S. They are in addition to a U.S. worker in Guangzhou who was evacuated earlier, as the Trump administration had already disclosed.

The new evacuations come after the U.S. sent a medical team to Guangzhou to screen American government workers. The team arrived earlier this week, and Nauert said the medical screenings were ongoing. She said they are being offered to “any personnel who have noted concerning symptoms or wanted baseline screening.”

A U.S. official said the evacuated Americans are being brought for testing to the University of Pennsylvania. That’s where doctors have been treating and studying patients evacuated from the U.S. Embassy in Havana.

The official wasn’t authorized to discuss the situation publicly and requested anonymity.

It wasn’t clear whether the incidents occurred in the consulate or at the homes of diplomats and other employees, many of them located in luxury high rises.

The China incidents have raised fears the unexplained incidents that started in Cuba in 2016 have expanded. The U.S. government has deemed those incidents “specific attacks” on American workers but hasn’t publicly identified a cause or culprit. Most of the incidents were accompanied by bizarre, unexplained sounds that initially led U.S. investigators to suspect a sonic attack.

The American government worker who was removed from China earlier reported “subtle and vague, but abnormal, sensations of sound and pressure.” China said last month that it had found no explanation.

In testimony before the Senate Foreign Relations Committee last month, U.S. Secretary of State Mike Pompeo said China had “said all the right things and have demonstrated their willingness to help us identify the vector which led to this medical incident.”

The China incidents affect one of the most important of the seven U.S. diplomatic outposts in the country. The Guangzhou consulate opened months after the establishment of diplomatic relations between Beijing and Washington in 1979 and moved to its new purpose-built facility in 2013.

It serves four southern provinces with a combined population of more than 204 million and processes more than 1 million visa applications of all types annually. It is also the only U.S. diplomatic installation in China authorized to process immigrant visas and handle adoptions.

Read More →

WASHINGTON (AP) — President Donald Trump and North Korean leader Kim Jong Un will meet at a luxury resort on Sentosa Island for nuclear talks next week in Singapore, the White House said Tuesday.

The historic meeting will be held at the Capella Hotel, press secretary Sarah Huckabee Sanders tweeted.

“We thank our great Singaporean hosts for their hospitality,” Sanders said.

Trump and Kim’s highly anticipated meeting is scheduled for 9 a.m. local time June 12 at — or 9 p.m. June 11 on the East Coast of the U.S. — after a flurry of on-again-off-again action.

Trump hopes to secure a nuclear deal with the North Koreans, seeking for Kim to give up his nuclear program, though he stressed last week that the process would likely take longer than a single meeting.

Located a quarter-mile off the coast of the city-state, Sentosa Island is known for its high-end beach hotels, golf courses and amusement parks. A U.S. advance team was spotted at the Capella Hotel last week meeting with North Korean officials in preparation for the summit.

The hotel is known for luxury amenities, impeccable service and, above all, privacy for business and leisure. Two of the hotel’s buildings were built in the 1880s for British officers based on the island.

On Tuesday evening, workers were painting a fresh coat on the façade, extra security was in place and red carpets were being rolled out at the hotel’s two entrances.

Officials had also considered the Shangri-La Hotel, which hosts an annual international security summit and was the venue for a 2015 meeting between Chinese President Xi Jinping and Taiwanese President Ma Ying-jeou.

Trump is expected to stay at that hotel, which is near a major shopping district and less secluded than the island facility chosen for his meeting with Kim.

Read More →

WASHINGTON (AP) — President Donald Trump couldn’t get what he wanted from months of three-way trade talks with Canada and Mexico.

So now his administration wants to pursue separate negotiations with the two U.S. neighbors to try to overhaul the 24-year-old North American Free Trade Agreement, which Trump has condemned as a job-killing disaster.

Trump’s top economic adviser, Larry Kudlow, went on “Fox & Friends” on Tuesday to convey the president’s preference for dealing separately with Canada and Mexico. Kudlow said Trump doesn’t plan to abandon NAFTA — something the president has threatened since taking office — but “is just going to try a different approach.”

Yet it’s far from clear that separate discussions by the United States with Mexico and Canada could leave the three-nation NAFTA deal altered but intact.

“It’s impossible to make sense of (Kudlow’s) statements,” said Michael Camunez, president of Monarch Global Strategies consultancy and a former U.S. Commerce Department official.

By saying there is no plan to leave NAFTA, “he’s probably trying to keep the markets calm … while we negotiate separate bilateral agreements.”

Trade analysts said they were skeptical that Canada and Mexico, angry that the U.S. has slapped tariffs on their steel and aluminum, would be drawn into one-on-one negotiations to appease Washington.

“This divide-and-conquer strategy is not entirely unexpected, especially now that the three-way negotiating process seems to have hit a wall,” said Mary Lovely, an economist at Syracuse University.

Trump has frequently expressed his preference for reaching agreements with other countries one at a time, rather than multilateral agreements like NAFTA or a 12-country Asia-Pacific deal he abandoned upon taking office last year. Earlier this year, he nudged South Korea into making concessions and accepting changes to a six-year-old trade pact between the two countries.

“He’s believed that bilaterals have always been better,” Kudlow said, adding: “He hates large treaties… When you have to compromise with a whole bunch of countries, you get the worst of the deals. Why not try to get the best of the deals for the American people, the American workforce, the American economy and presumably for their economies as well?”

Most economists say broader trade deals typically work more effectively than one-on-one pacts between countries. A hodgepodge of two-country trade deals tends to distort corporate decision-making. Companies will then typically target countries with the lowest tariffs instead of trying to sell to the markets that make the most economic sense.

It “replaces market signals with tariffs and quotas,” Lovely said.

What’s more, Washington’s new strategy could prove a hard sell in Ottawa and Mexico City, with the Canadians and Mexicans still furious over Trump’s decision last week to impose tariffs on their steel and aluminum shipments. The administration has argued that a reliance on imported metals poses a threat to America’s national security.

“The atmosphere is utterly toxic right now,” said Edward Alden, senior fellow at the Council on Foreign Relations. “There will be enormous pressures on Canada and Mexico not to talk to President Trump.”

On Tuesday, in fact, Mexico announced retaliatory tariffs on a range of U.S. products, including pork, cheese, apples, cranberries, whiskey and motorboats. Canada earlier announced plans to slap tariffs on $12.8 billion worth of U.S. products, ranging from steel to yogurt.

Rod Hunter, a trade lawyer with Baker & McKenzie, said the Trump administration seems to reckon that America’s economic clout is potent enough to win concessions from smaller trading partners.

“But everybody has politics,” said Hunter, a former economic official with the U.S. National Security Council. “If you put economic interests up against political interests, politics usually wins.”

Analysts note that Mexico is expected to elect a new president — the left-leaning Andrews Manuel Lopez Obrador — who would likely take a harder line in talks with the United States.

NAFTA lifted down most trade barriers between the U.S., Canada and Mexico. Trade surged within the NAFTA bloc, benefiting American farmers who export corn and other products.

But many U.S. manufacturers moved production south of the border to capitalize on Mexico’s low labor costs, then shipped goods back to the United States. The influx of imports swelled America’s trade deficit with Mexico, which came to $69 billion last year. (The United States posted a nearly $3 billion trade surplus with Canada in 2017).

Trump campaigned on a promise to negotiate a better NAFTA — or withdraw from the deal altogether.

The three countries started talks last August. But little progress has been made. The U.S. wants changes to the deal would shift more auto production back to the United States. It also wants to end the deal every five years if the countries didn’t vote to keep it. Canada has called that “sunset clause” a deal-killer.

Still, Lovely said it’s possible that the United States can craft a separate agreement with Canada. The Trump administration says it wants a big chunk of auto manufacturing to be produced by workers earning around $15 an hour. That’s not a problem for Canada, but is a big one Mexico, where factory workers usually earn less than $5 an hour.

Read More →

LiveWire