Radio Sputnik has discussed the new trilateral trade deal between the United States, Mexico and Canada with Brenda Estefan, a foreign policy analyst and former security attaché at the Mexican Embassy in Washington.
Sputnik: It took a long time and it's been finalized now; what do we know about the terms of this new trilateral trade deal?
There are a number of things that changed, but they don't have a significant impact in terms of trade in North America. One of them is the percentage of components that a car or truck has to have to be considered a duty-free item. Up to now it used to be 62.5%, in the new trade agreement it's going to be 75%. Another thing that has changed is that a certain percentage of the wages that have to be paid towards the accomplishment of doing a new car or truck had to be up over $16 an hour.
The pharmaceutical patents were listed up to ten years which is something that is quite a gain for the US administration, for the Trump administration, which was very concerned of protecting IP for medicines but it's not necessarily very good for a country like Mexico which is a developing country and of course that would raise costs of medicines in Mexico.
Sputnik: How would you assess this deal regarding the terms of improving US-Mexico relations?
Brenda Estefan: NAFTA was a trade agreement that had been in place for over 20 years so of course there were things that needed to be updated and brought up-to-date. To give you just an example, the Internet was not part of the original agreement, intellectual property was not part of the original agreement. So there are a number of things that were encoded in this new trade agreement.
Sputnik: How much of a role does Donald Trump's son-in-law, Jared Kushner, have to play here?
Brenda Estefan: That's an interesting question because Jared Kushner has been sort of back-channeling most of the Mexico-US agenda. He has a personal relationship with the Mexican Foreign Affairs Minister Luis Videgaray. They have been having a strong communication since the first day not only of the inauguration of Donald Trump but also since the campaign. There clearly has been back-channeling that goes from Jared Kushner to Luis Videgaray that has connected the White House with the presidential house in Mexico, Los Pinos.
This is clearly not an exception. The trade agreement has also been touched by this personal relationship. One is hoping that starting with the new administration in Mexico which is coming the next first of December when we'll have a new President in Mexico, that relationship will go to the official channels and we'll have a more stable way of doing things and reaching new agreements.
Sputnik: What was there about the previous NAFTA deal that US President Donald Trump was so unhappy with? We know that he called it one of the worst trade deals in history; what was it?
The reality is that Mexico is the main market of over half of the states in the US. We buy more from the US than the five strongest economies in Europe altogether or the BRICS countries combined. That gives you an idea of how important the Mexican market is for the US. And of course Donald Trump faced a lot of pressure during the time of negotiations particularly from farmers that were saying that were going to lose part of the market share in Mexico if NAFTA were to disappear.
At the end of the day he managed to rebrand the agreement and get some more gains for the US and his political days that he's clearly going to present as a big win.
The views expressed in this article are solely those of Brenda Estefan and do not necessarily reflect the official position of Sputnik.
The views and opinions expressed in the article do not necessarily reflect those of Sputnik.