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TheLastRefuge @TheLastRefuge2
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1. The economics will be in the details. But the big issue was always a problem. Canada no longer manufactures much. They have no heavy industry left, and generally only assemble stuff now. They are a narrow and weak economy by design @manny_ottawa
2. As a consequence it was impossible for Canada to join a U.S-Mexico manufacturing trade bloc, when Canada no longer possesses the manufacturing base, the actual economic capability, to join the agreement.
3. Canada has conceded their industrial base (and energy development base) to Canadian environmentalists and progressives. It wasn't a matter of Canada being unwilling to join a U.S-Mexico trade bloc; under current policy they don't have the *ability* to join. @manny_ottawa
4. So USTR Lighthizer and Jared Kushner had to devise a plan to allow Canada to join, but overcome the real world economic hurdle of their physical plant inability to agree to the terms (ie. Rules of Origin etc.) @manny_ottawa
5. By initial appearances it looks like Lighthizer/Kusher did this by constructing a series of sector by sector "side letters". These side letters empower the U.S. to put limits on the amount of product, by sector, allowed into the U.S. Market from Canada. @manny_ottawa
6. This process allows Canada to keep their dependent process of bringing in component parts from Asia and China, for assembly and shipment into the U.S.; but simultaneously limits the amount of the end product shipped. @manny_ottawa
7. Without this approach, Canada would have been economically *devastated*, like tumbleweeds-in-a-wasteland devastated. And without any industrial manufacturing base to support their own production needs, they would be entirely shut out of U.S. Market access. @manny_ottawa
8. In the new agreement, President @realDonaldTrump starts with near-current-level quotas on Canadian goods; and slowly, over time, begins lowering the number of products allowed into the U.S. market. This forces gradual increases in domestic Canadian production. @manny_ottawa
9. The new agreement puts a system into place to progressively ratchet-up the amount of North American part content produced by Canada; in order to retain their access to the U.S. Market.
10. The ("side letters") approach forces Canada to make a decision, if they want to expand their exports they need to make the product in Canada. If they don't make it in Canada it will not get into the U.S. market without a tariff (level determined by Trump). @manny_ottawa
11. Additionally, this approach is a tactic for “pacing” the Rate-of-Ratchet to match the Rate-of-Rebuilding for our North American auto parts industry; which has been heavily outsourced to China/Asia; and the time-allowed will prevent critical parts shortages. @manny_ottawa
12. As the original problem was evident - Canada is far too reliant on an assembly economy, using cheap subsidized Chinese parts to assemble and sell into the USA. @manny_ottawa
13. That flaw in the Canadian economy happened over time, and it can’t be changed overnight. Canada needs time to transition. Transition they will. Side letters will be signed, but progress we must see.
14. In the end, this *can be* a good deal for the Canadian middle class. Skilled manufacturing jobs are worth more than assembly jobs. Cowboy up Canada; get rid of the political infection that has narrowed your economy. It's time to start making stuff again, eh? @manny_ottawa
15. President @realDonaldTrump has just destroyed NAFTA, which was only an internal agreement amid ourselves; and he has created an actual North American trade bloc with internal and external reciprocal trade rules far more powerful than the European Union. @manny_ottawa
16. The world is indeed watching as President @realDonaldTrump resets the entire global manufacturing base and supply chain. No more "service-driven" economic nonsense that only benefits the professional political class.

17. The U.S. Mexico and Canada Agreement "USMCA" will be extraordinarily excellent for Mexico and the U.S., and *can be* for Canada also, if they make the cultural/political decision to start being independent again. Break free from subservient economic dependency to China/Asia.
18. /END
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