Executive Pay: The Curious Case of Carlos Ghosn’s Arrest
February 12, 2025
Globalization of Supply Chains and its Implications We have discussed how the globalization of the world economy has made the globe more integrated and interconnected. While this has both positive and negative effects on the way global trade and commerce takes place, there is one critical aspect that needs our attention. That is to do […]
The Voice of Customer is not a tool that is used in Six Sigma process. It is the underlying philosophy of the Six Sigma process which makes it ensures that the entire process improvement exercise is based on the need of the stakeholder group that matter most i.e. the customer. The Voice of Customer is […]
Privatization of airports is not a new idea. Many politicians have implemented it as an important economic policy. Margaret Thatcher was one of the first politicians to use privatization as an important policy measure. Her government privatized essential entities like the British Airways as well as the Heathrow airport in the 1970’s. Donald Trump has […]
In previous articles, we looked at the humungous benefits that the BPO phenomenon brings to the economies of the host and the target nations. Mainly, we focused on how cost savings for the companies outsourcing their back office work and increased revenues for the companies doing the outsourced work have been actualized leading to a […]
How Facebook can be used to Influence and Interfere in Elections Worldwide It is a known fact that social media, while easing communications and connecting Billions of people worldwide, can also be used by political parties, unscrupulous and malevolent actors, and even businesses and corporate entities to manipulate public opinion and to influence the outcomes […]
Canada and Mexico are the second and third biggest trade allies for the United States. Historically these nations have had a healthy relationship with very few trade disputes. This is the reason why the North American Free Trade Agreement, i.e. the NAFTA was said to be successful. However, President Trump has been extremely critical of NAFTA ever since he was a candidate. He firmly believes that other countries like Mexico and Canada were getting an unfair advantage because of NAFTA.
This is the reason why he pressurized Canada and Mexico to renegotiate the terms of the trade. As a result, a new agreement was formed in spectacular fashion. Delegates from the three countries came to a conclusion hours before the self-imposed deadline was breached. Under the threat of tariffs from the United States, Canada and Mexico have agreed to some revisions in the old agreement. However, if Donald Trump is to be believed the new agreement is entirely new, i.e. it is not a modification over the old agreement. President Trump wanted to make sure that the world understood that this was a different agreement which is why he has renamed it the United States-Canada-Mexico- Agreement (USCMA). In this article, we will have a closer look at some of the important changes that have been made in this agreement.
Automobile Sector: Analysts tracking the Trump presidency know that he is more emotional about certain industries than he is about others. Consider the case of aluminum and steel industry which Trump believes are the backbone of the economy even though there are no facts available to back this claim. Similarly, Trump is also very emotional about the automobile industry. He was extremely critical of the NAFTA agreement because he believed that NAFTA was single-handedly responsible for the drastic fall in the number of manufacturing jobs in the United States. Some of the provisions introduced in the USCMA agreement are as follows:
Wine and Cheese Sector: Another major grievance that Donald Trump had was with the Canadian dairy sector. According to Trump, Canada was being hypocritical. On the one hand, they insisted that Americans implemented free trade policies while on the other hand, they were protectionist about their dairy sector.
As per the new agreement, Canada has agreed not to be protectionist anymore. The dairy market in Canada will now be open to all the companies in North America. Donald Trump believes that this will positively impact the American dairy farmers.
Donald Trump has also negotiated to change regulation in the Canadian province of British Columbia. As per the current law, only wines manufactured in British Columbia were allowed to be stocked in a particular shelf in the stores. Now, with the advent of USCMA, American wines will also be stocked alongside the Canadian wines. This is likely to boost America’s wine exports as well.
Other Sectors: Donald Trump has scored some quick wins on other subjects as well. For instance, under this agreement, he has secured the rights for American financial services companies to join the Mexican markets. Since Mexico is still a developing market, this access is very valuable for these financial service firms.
He has also negotiated for the rights of American pharmaceutical companies. The patents of some of these companies were about to expire. As a result, Canadian companies would have produced the generic equivalent of these drugs and taken the market share away from Americans. Now, the period of the patent will be increased. Obviously, this will increase the profitability of American companies.
To sum it up, under the United States Canada Mexico Agreement, the United States has used its muscle power to intimidate its allies into a deal. According to many analysts, this may end up creating a disaster in the long run.
Your email address will not be published. Required fields are marked *