21:46 GMT +321 October 2018
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    Donald Trump Jr. (R) watches along with his brother in law Jared Kushner (L) and Trump Jr's wife Vanessa (C) as his father Donald Trump (2nd L) celebrates after accepting the Republican presidential nomination at the 2016 Republican National Convention in Cleveland, Ohio U.S. July 21, 2016.

    Jared Kushner Back-Channeling Most of Mexico-US Agenda – Ex-Diplomat

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    The US president has said that a new trade deal replacing the old NAFTA agreement is the most important ever agreed upon by the US. According to Trump, the new agreement is “truly historic” and the “biggest trade deal in US history.” Last week the United States, Mexico and Canada agreed to the terms for a new trilateral trade deal called USMCA.

    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?

    Brenda Estefan: The leaders of the three countries have been hailing the new trade agreement as a big win for the three countries. But, to be honest, when one looks into the small print, the terms of this new trade agreement are not very different from what had been negotiated for the TPP, part of which the US, Canada and Mexico were at a certain moment before Trump went into the White House and decided to withdraw.

    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.

    READ MORE: Trump Says Canada, Mexico Will Be 'Wonderful Partners in Trade' in Future

    That, obviously, was aimed to address the Mexican labor market which tends to be a lot lower than the Canadian and the American ones. Lastly, I would say that something important for the US is that they got access to part of the dairy market in Canada. Canada was a bit flexible on their dairy protection so that the US can actually enter the Canadian dairy market with more ease.

    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.

    READ MORE: ‘Great Call': Trump Praises Call With Mexican President-Elect Lopez Obrador

    But at the same time, as I said before, there's not a huge change in terms of the impact on the current trade structure of the region. Mexico and Canada had to react in a defensive way because that was the position they were placed by the Trump administration. Trump wanted to have better conditions for the US so Canada and Mexico had to defend their positions. They had to try to protect as much as they could of the good things that NAFTA has brought to the region.

    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.

    READ MORE: Trump Delivers Speech on New Trade Deal With Mexico, Canada

    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?

    Brenda Estefan: Immigration and the trade were the signature topics of Donald Trump during his campaign. He mentioned that he said once and again that NAFTA was the worst trade agreement ever negotiated by the US. He believed that it was very poorly negotiated and he always argued that it was not protective of US workers and manufacturers. He actually promised during his campaign and along these months of his administration that he would re-negotiate the agreement in order for it to be more protective of US workers and US manufacturers.

    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.

    READ MORE: US, Mexico, Canada Reach New Trade Deal to Replace NAFTA

    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.


    Related:

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