Five years ago, Trump touted his "big, beautiful" replacement for NAFTA, the "free trade agreement" between the US, Mexico and Canada. Trump's NAFTA-2 was called the USMCA (US-Mexico-Canada Agreement) and it was pretty similar to NAFTA, to be honest.
That tells you a couple things: first, NAFTA was, broadly speaking a good thing for Trump and the ultra-wealthy donors who backed him (and got far richer as a result). That's why he kept it intact. NAFTA and USMCA are, at root, a way to make rich people richer by making poorer people poorer. Trump's base hated NAFTA because they (correctly) believed that it was being used to erode wages by chasing cheaper labor and more lax environmental controls in other countries. Neither NAFTA nor USMCA have any stipulations requiring exported goods to be manufactured by unionized workers, or in factories with robust environmental and workplace safety rules.
The point of NAFTA/USMCA is to goose profits by despoiling the environment, maiming workers, stealing their wages, paying them less, all while poisoning the Earth. Trump's "new" NAFTA was just the old NAFTA with some largely cosmetic changes so that Trump's base could be (temporarily) fooled into thinking Trump was righting the historic wrong of NAFTA.
However, there was one part of USMCA that marked a huge departure from NAFTA: the "IP" chapter. USMCA bound Canada and Mexico to implementing brutal new IP laws. For example, Mexico was forced to pass an anti-circumvention law that makes it a crime to tamper with "digital locks." This means that Mexican mechanics can't bypass the locks US car companies use to lock-out third party repair. Mexican farmers can't fix their own tractors. And, of course, Mexican software developers can't make alternative app stores for games consoles and mobile devices – they must sell their software through US Big Tech companies that take 30% of every sale...
Shamefully, Canada had already capitulated to most of these demands. Two Canadian Conservative Party politicians, Tony Clement and James Moore, had sold the country out in 2012, throwing away 6,138 negative responses to a consultation on a new DRM law (on the grounds that they were "babyish" views of "radical extremists"), siding instead with the 54 cranks and industry shills who supported their proposal...
When Canadian politicians are pressed on why these anti-interoperability policies are good for Canada, they'll say that it's a condition of free trade, and the benefits of being able to export Canadian goods to the US without tariffs outweigh the costs of having to pay rents to American companies for consumables (like car parts or printer ink), repair, and software sales.
Sure, when Canadian software authors sell iPhone apps to Canadian customers, the payments take a round trip through Cupertino, California and return 30% short. But Canadian consumers get to buy iPhones without paying tariffs on them, and the oil, timber, and minerals we rip out of the ground can be sent to America without tariffs, either (oh, also, a few things that are still manufactured in Canada can do this, too).
Enter Trump, carrying a 25% tariff on all Canadian goods, which he has vowed to impose on his first day in office. Obviously, this demands a policy response. What should Canada do when Trump tears up his "big, beautiful" trade deal and whacks Canadian exporters? (more...)
Canada shouldn't retaliate with US tariffs
No comments:
Post a Comment