During 2018, America was renegotiating international trade agreements with the world. Some countries seemed fine but a number were in the crosshairs—namely Mexico and China. Add in a third group for postmodern nations like Canada and we have something to talk about. This article comes from August of that year. There’s a big difference between all three.
Europe and Canada
Let’s start with the small stuff. After WWII, European countries were handled with care. They were essentially treated as developing nations because their continent had been decimated. Today’s negotiations are simply bringing Europe up to par. It’s time they were fully incorporated into the First World with all its responsibilities and that’s exactly what’s happening. Portions of older agreements are being updated (including payments to NATO) and the whole thing is a coming of time—no big deal. It’s simply an adjustment, just like seeing a chiropractor.
Canada is different. Our liberal government is filled with left-leaning theorists not well-versed in the mechanics of business. Their passion is to promote a progressive agenda, which includes telling others how to live. And, believe it or not, it’s a valid position. The world needs those who push. But it’s probably best to separate us from our double-southern neighbours because Mexico may not be in a position to absorb all this progressiveness (i.e., more human rights only work when everyone is well fed, and there is an order in which you implement these sorts of changes).
Mexico
Though definitely moving upward, Mexico still has many problems. Too many poor people (which leads to illegal immigration), too small a welfare state (which is hard to compete against), and too big a drug industry. All problems which affect the United States. There’s no reason why Mexico can’t be like Poland. And it’s silly for the US to be exporting so many jobs overseas when they could have the very same arrangements next door.
The deal with Mexico has to be different than that with Canada. So much of Mexican life affects cultural America and they’re the gateway to stabilizing Central and South America. So if Mexico succeeds, so can 20 more.
China
China and the US have an interesting past. When Churchill and Roosevelt developed the UN, each selected one nation to join them on the five-member security council (along with Russia, with veto powers). For historic reasons, Winston chose France. FDR picked China. Four years later, Mao turned his country towards communism. A year after, they sent 260,000 troops to war against America in North Korea. (Nice!)
During the 1950s, China was an economic mess. Mao’s policies basically led people into starvation but once he died, reforms began to emerge and China introduced their own form of capitalism. One that employed a lot of help from the US. Remember, prosperity doesn’t come from dust. All that know-how and customer support came from somewhere. Needless to say, China became the poster child of globalization. But today, it no longer wishes to play by those rules.
The basic components to any economy is hands, minds, and money. And the rules of globalization say it demands capitalism and democracy in return for assistance. Well, China is feeling good about its system and are in no hurry to make change. They’ve come to a point where they have loads of dough and lots of confidence. All that’s missing is ol’ ingenuity but they’ve come up with a solution for that—just steal it. And herein lies the problem. China is saying no to full first-world conversion while continuing to enjoy the benefits of receiving globalization. And now they’re building a military.
In their defense, China still has way too many peasants to even consider democracy, regardless of what Hong Kong thinks. America says, “Fine, but conduct your business like a modern nation. No more special treatment with low currency and stuff.”
China’s GDP is $14 trillion while India’s is only 4. But India is an English-speaking democracy, shouldn’t those figures be reversed? Truth be told, India’s democracy has hampered their progress. Private property rights have been an issue and their court system is a nightmare. So while India struggles doing things the right way, China puts its foot on the accelerator. Perhaps the tactic will be for American corporations to shift alliances to India or Pakistan. Hasbro has already announced it’s moving its manufacturing elsewhere. Lots of places have hands.
Summary
International trade is complicated because so many countries are at different levels. It’s easy when everyone’s the same and that’s the position Canada would like to take. But while you can discuss 18-week paid maternity leave with places like Europe, it’s naïve with somewhere like Mexico. And though the US is happy to listen, they’re busy right now.
Roosevelt knew something when he cuddled up to China in 1945, for it was the Chinese who built much of America’s railway. Back then, architects were amazed by how these people could work. Their hands moved like windmills as they outperformed anything America could muster by 30% (including every type of immigrant). It became well known that if these people ever got themselves organized, they’d be a real force. And now they have money.
Everyone knows the photo of Trump pointing his finger at Justin Trudeau. It’s become iconic. But there’s a better one where he’s shaking hands with President Xi. It says “game on.” So are we witnessing the economic dismantling of China? Or is this just a spat between number two and number one? I don’t know but it should be a good fight. Casual observers may think America has the advantage but they’re not taking into account culture. China is a get-to-work, obedient state. America is no longer anything like that. So at best, it’s 50/50.
Trump is definitely a controversial figure but believe me, he didn’t run to showboat his time with Daniels. This negotiation is the bailiwick of his candidacy and will certainly be the hallmark of his time as president. And like it or not, corporate America is right behind him. And though many of us find our entertainment in the political pages, you have to flip to the business section to follow this one.
Note: Watch the documentary, American Factory, produced by the Obamas.