Replacing NAFTA with USMCA A rose by another name

While the country has been obsessing about Bret Kavanaugh, President Trump brokered a trade deal with Mexico and Canada. While Trump claims the deal is new, many are reluctant to put much stock in that claim – that is, many economists see the deal as just the North American Free Trade agreement under a new name.

Trump made sure to call the deal something different than NAFTA – which he has claimed to be the worst trade deal in history.

[Trump quote]

Rebranding, not keen economic sense, is the secret to Trump’s successes. Many a financially struggling property has found renewed success once it adorned the Trump moniker, which is an amazing marketing accomplishment of Trump’s. For example, 17 properties in Manhattan adorn the Trump name, while Trump only actually owns five of them. Marketing, not economics, is Trump’s genius.

[Rebranding change]

Trump’s favorite news station was quick to tout the deal as a success and emphasize the newness of the agreement.

But one Fox News correspondent did point out that the deal is just a rose under another name.

[In name only clip]

However, it should be noted that there are a few key provisions that are designed to benefit certain American industries. The biggest one involves the auto industry. Under the new deal, 75 percent of auto parts must be made in the United States, Mexico or Canada. This is up from the previous 62 percent threshold. Also, 30 percent of the automobiles must be manufactured by workers who make at least $16 an hour.

This is the largest change from the previous NAFTA, but the economic impact is yet to be determined. Many feel that this may result in higher consumer prices and may make North American autos less competitive in world markets.

One concession that Trump was able to barter with Canada is the lessoning of restrictions within the dairy industry. This will help to open up markets for US dairy farmers.

A few other changes include;

better environmental and labor union rights

provisions for intellectual property rights

and less trade restrictions in the pharmaceutical industry

But according to Trump, he has moved North American trade pacts from the “worst deal” to the greatest of deals. But this claim is almost nearly pure marketing and rebranding.

So perhaps the art of the deal is not necessarily always that you end up with a better deal, but that you end up selling your deal as the greatest of deals, even if the deal is nearly the same deal that you had before.