I really am not sure where to begin with this latest farce, Trump’s announcement yesterday of a supposed US-Mexico Free Trade Agreement. Of course there was the farce of him trying to make the announcement with a live phone call between him and outgoing Mexican President Pena-Nieto (to be replaced on Dec. 1 by leftist populist Obrador), which took awhile to get going. There is the problem that some details appear to be unresolved, but most importantly that Pena-Nieto insisted four times that Canada needed to be part of the deal for it to be accepted in Mexico, including with his last words to Trump, while Trump seems fine with just having a tow-nation deal leaving Canada in the dust, or perhaps hoping that Canada will simply be forced to sign onto this deal as is, which it might. But for Congress to approve it prior to Obrador coing into office, given Congress’s 90-day waiting period on such legislation, Trump has four (now only three) days to get Canada to sign on. Prospects for that and Mexico also passing it before Dec. 1 do not look too good, maybe not much better than the prospects of actually getting North Korea to denuclearize.
So what is in this deal? Most of the publicity has been about its automobile section, which some in the US hope will increase automobile production in the US, although that is not definitely the case. The two main parts are to increase the portion of parts made in North America from 62.5% to 75% in order to avoid facing tariffs. This apparently would affect Toyota, Nissan, and Mazda most severely, but hardly any other non-North American producer. Maybe some of those companies might shift some production to North America, maybe at least production of parts, but there is no reason to believe any such increase will go to the US rather than to Mexico, although probably some would.