>>> WELCOME BACK. YOU’RE WATCHING "VELSHI &
RUHLE."
RUHLE." THE UNITED STATES AND CANADA
REACHED A LAST-MINUTE DEAL LATE
LAST NIGHT TO SALVAGE THE NORTH
AMERICAN FREE TRADE AGREEMENT.
YOU KNOW IT AS NAFTA.
PRESIDENT TRUMP TOOK TO THE
PODIUM EARLIER TODAY IN THE ROSE
GARDEN TO SHARE FURTHER DETAILS.
>> THROUGHOUT THE CAMPAIGN I
PROMISED TO RENEGOTIATE NAFTA
AND TODAY WE HAVE KEPT THAT
PROMISE.
PROMISE. THE AGREEMENT WILL GOVERN NEARLY
$1.2 TRILLION IN TRADE WHICH
MAKES IT THE BIGGEST TRADE DEAL
IN THE UNITED STATES HISTORY.
ONCE APPROVED THIS WILL BE A NEW
DAWN FOR THE AMERICAN AUTO
INDUSTRY AND FOR THE AMERICAN
AUTO WORKER.
AUTO WORKER. THEY WILL SEE.
THEY UNDERSTAND.
THEY UNDERSTAND. BY THE WAY, WITHOUT TARIFFS WE
WOULD PTD BE TALKING ABOUT A
DEAL.
DEAL. JUST FOR THOSE BABIES OUT THERE
THAT KEEP TALKING ABOUT TARIFFS.
THAT INCLUDES CONGRESS.
OH, PLEASE DON’T CHARGE TARIFFS.
>> ALL RIGHT.
THIS NEW NAFTA WILL BE KNOWN AS
A U.S.-MEXICO-CANADA AGREEMENT
OR USMCA.
OR USMCA. IT SETS NEW RULES ON FINANCIAL
SERVICES, DIGITAL BUSINESSES AND
THE AUTO SECTOR.
A CAR OR TRUCK MUST HAVE 75% OF
ITS COMPONENTS MANUFACTURED
WITHIN THE THREE COUNTRIES TO
QUALIFY FOR ZERO TARIFFS, THAT
IS UP FROM 62.5%.
IN ADDITION, AT LEAST 30% OF THE
LABOR ON A CAR OR TRUCK MUST BE
DONE BY WORKERS EARNING AT LEAST
$16 AN HOUR.
THAT INCREASES TO 40% BY 2023.
$16 AN HOUR IS THREE TIMES WHAT
THE TYPICAL MEXICAN AUTO WORKER
MAKES AND SOME SMALL CAR
PRODUCTION MAY MOVE OUT OF NORTH
AMERICA BECAUSE OF ADDED
EXPENSE.
EXPENSE. CANADA MADE SOME CONCESSIONS ON
THE DAIRY MARKET, A HOT BUTTON
ISSUE FOR PRESIDENT TRUMP.
THE NEW DEAL GIVES AMERICAN
PRODUCERS ACCESS TO AN EXPANDED
3.6% SHARE OF CANADA’S DOMESTIC
MARKET AND ELIMINATES OTHER
BARRIERS.
BARRIERS. IN EXCHANGE, SETTLEMENT TERMS
KNOWN AS CHAPTER 19 INTACT.
A BIG CONCESSION FROM THE TRUMP
ADMINISTRATION.
ADMINISTRATION. THIS MEANS AN INTERNATIONAL
PANEL WILL CONTINUE TO SETTLE
TRADE DISPUTES BETWEEN THE THREE
COUNTRIES.
COUNTRIES. NOT U.S. COURTS.
MEANWHILE, NO AGREEMENT HAS BEEN
REACHED ON STEEL AND ALUMINUM
TARIFF EXEMPTIONS.
TARIFF EXEMPTIONS. U.S. OFFICIALS ARE LOOKING TO
KEEP THOSE DISCUSSIONS ON A
COMPLETELY SEPARATE TRACK.
CANADA EXPORTED ABOUT 24 BILLION
IN STEEL AND ALUMINUM TO THE
UNITED STATES LAST YEAR.
A FORMAL VOTE IN CONGRESS WILL
NOT BE HELD UNTIL 2019 AND IT IS
STILL UNCLEAR IF LAWMAKERS WILL
SUPPORT THE DEAL.
TRADE PROMOTION AUTHORITY
GRANTED TO THE PRESIDENT GIVES
CONGRESS THE POWER TO APPROVE OR
SQUASH ANY DEAL UP AND DOWN THE
VOTE WITHOUT ANY AMENDMENTS.
JOINING ME IS EDITOR AT LARGE MY
FRIEND JOHN HARWOOD.
OKAY, JOHN, THIS IS BASICALLY A
DEAL FOR FREER TRADE WHICH IS
NOT SOMETHING PRESIDENT TRUMP OR
PETER NAVARRO TALKED ABOUT ON
THE CAMPAIGN TRAIL BUT SOMETHING
AMERICANS AND THE MARKET LIKE
TODAY.
TODAY. DO YOU TAKE THIS DEAL AS A
POSITIVE?
POSITIVE? >> YES.
>> YES. I THINK IT’S POSITIVE AS
COMPARED TO THE ALTERNATIVE
WHICH IS TO HAVE THE OLD NAFTA
FALL APART.
FALL APART. IT IS MOSTLY --
>> WHAT ABOUT THE OLD NAFTA STAY
INTACT?
INTACT? >> YES.
>> YES. IT HAS IMPROVEMENTS FOR THE
DIGITAL ECONOMY MOST OF WHICH
HAD BEEN NEGOTIATED BY PRESIDENT
OBAMA AND HIS COUNTERPARTS
BEFORE HE LEFT OFFICE AS PART OF
THE TRANSPACIFIC PARTNERSHIP.
THIS IS MOSTLY FREER TRADE.
THERE ARE SOME ELEMENTS OF
MANAGED TRADE IN IT LESS FREE.
THAT IS TO SAY, THE PROVISIONS
FOR THE AUTO INDUSTRY THAT
REQUIRE A HIGHER PERCENTAGE OF
NORTH AMERICAN CONTENT IN CARS
THAT ARE EXEMPT FROM IMPORT
TAXES AND SECONDLY REQUIRES A
PERCENTAGE OF PEOPLE BEING PAID
A CERTAIN PAGE, THAT’S DESIGNED
TO LIFT WAGES IN MEXICO,
DECREASE DOWNWARD PRESSURE ON
U.S. WAGES F. THE PROVISIONS
WORK IT MEANS OUR CARS WILL GET
MORE EXPENSIVE FOR U.S.
CONSUMERS BUT THERE’S ALSO A
CHANCE THAT THEIR COMPLICATED
ENOUGH THAT THEY WON’T BE WORTH
IT FOR AUTOMAKERS TO COMPLY
WHICH MEANS THAT THE PRESIDENT’S
STATEMENT ABOUT A NEW DAWN FOR
THE AUTO INDUSTRY, THAT IS
ALMOST CERTAINLY NOT CORRECT.
>> WELL, THE ONE THING THE
PRESIDENT IS GOOD AT IS BRANDING
AND MARKETING AND NOT GOING TO
KNOW IF THE DETAILS WILL FLY FOR
ANOTHER COUPLE OF YEARS SO IN
THE SHORT TERM, ESPECIALLY SINCE
WE’RE 36 DAYS AWAY FROM THE
MIDTERMS AND THINGS LIKE AUTO
WORKERS AND DAIRY FARMERS MATTER
TO THE PRESIDENT, IS THIS A
WINNING DEAL?
WINNING DEAL? DOES IT WIN HIM SUPPORT AND
VOTES?
VOTES? BECAUSE THE TAX CUTS HAVE NOT
TRICKLED DOWN.
TRICKLED DOWN. >> NOT MANY.
THIS IS NOT SOMETHING THAT MOST
AMERICANS ARE GOING TO FOCUS IN
ON.
ON. IT WILL HAVE NO IMMEDIATE
AFFECTS.
AFFECTS. TRADE DEALS ARE VERY OBSCURE TO
MOST PEOPLE AND AS YOU SAID
EARLIER, THIS IS ESSENTIALLY
SLAPPING A NEW LABEL ON AN OLD
TRADE DEAL AND WORKERS GENERALLY
SPEAKING ARE GOING TO UNDERSTAND
THAT.
THAT. THE POSITIVE FOR THE PRESIDENT
IS IT REMOVES THE SOURCE OF
CONFLICT AND NERVOUSNESS IN
MARKETS AND ANY TIME A PRESIDENT
COMES OUT AND SAYS LOOK AT THIS
INTERNATIONAL AGREEMENT I JUST
MADE, THAT IS A SOFT POSITIVE