Thread by @TheLastRefuge2

1) Big Day. Transparently missing amid resistance media.

Want to know more about importance of this date? Here's the explainer thread.

https://twitter.com/TheLastRefuge2/status/1278450905600401410

2) First it is important to understand the difference in trade agreements, and what NAFTA/USMCA never was.

The issue, always purposefully hidden by media and economic pundits, is that NAFTA was never a North American “Trade Bloc”.

3) Those who exploited NAFTA, always needed a big foundational lie to hide the scheme.

Most people mistakenly equate NAFTA with other multi-nation trade partnerships like the EU (European Union). The NAFTA partnership is nothing like the EU trade bloc; it is not even close.

4) Within the EU example, each nation is committed to only trade with outside nations on terms of agreement within the trade bloc. All trade parameters must meet and comply with the terms within the EU trade agreements.

5) The terms of trade inside the EU group are connected to the same terms outside the group.

The EU trade agreement is an agreement between themselves *and* their commerce toward all other external nations. Thus it is a "bloc".

6) However, in NAFTA (now USMCA), the Canadian and Mexican trade ministers can negotiate freely with outside nations. There were no restrictive parameters on their independent decisions.

7) NAFTA was more similar to an **access agreement** with *only* terms of internal trade and commerce between the U.S., Canada and Mexico subject to the agreement.

NAFTA was only an agreement between the U.S., Canada and Mexico and did not extend to external nations.

8) If France wanted to negotiate trade with China on a specific product -or sector- they have to comply with, and go through, the EU trade group. China would have to apply the same terms to France as all other nations within the trade bloc.

9) However, if Mexico wanted to negotiate with China on a specific product, they did not need to check with the U.S., they could cut any deal they wanted.

This was the basic issue underlining the NAFTA ‘fatal flaw’.

NAFTA was never a 'trade bloc' agreement.

10) As a consequence of NAFTA never being a trade-bloc, it was exploited exclusively for access to the U.S. market.

This was the main issue USTR Lighthizer was going to tackle head-on. That's why Canada and Mexico went bananas.

11) Over the past 30 years Canada & Mexico structured their manufacturing economy (a misnomer) based on unlimited access to the U.S. market.

Mexico & Canada assembled foreign products shipped to them as parts, then sent the finished products into the U.S. market.

12) This exploitative approach, a backdoor to the U.S. market, was the primary reason for massive foreign investment in Canada and Mexico; it was also the primary reason why candidate Trump, now President Trump, wanted to shut down that loophole and renegotiate NAFTA.

13) By shipping parts to Mexico and/or Canada; and by deploying satellite manufacturing and assembly facilities in Canada and/or Mexico; China, Asia and to a lesser extent EU corporations exploited this loophole.

14) Through a process of building, assembling or manufacturing their products in Mexico/Canada those foreign corporations could skirt U.S. trade tariffs and direct U.S. trade agreements.  The finished foreign products entered the U.S. under NAFTA rules.

15) Why deal with the U.S. when BMW could just deal with Mexico; pay a few bribes to keep costs low; and use NAFTA rules to ship their product(s) directly into the U.S. market?

See the problem?

That's what Trump stopped.

16) Corporations, including U.S. companies, within the Auto-Sector could enhance profits by building in Mexico or Canada using parts imported from Asia/China.  The labor factor was not as big a part of the overall cost consideration as cheaper parts and imported raw materials.

17) Now, take away the market access, initiate rules of origin, and suddenly the ability for Mexico and Canada to broker themselves (as assembly points) for economic benefit is lost.

Both nations lose hundreds of billions in economic activity.

18) This is the big shift with USMCA. The U.S. market is the crown jewel for manufacturers. Now, in order to reach the U.S. market, the source material must come from North America. The component stuff must be built here.

19) The USMCA pulls the component manufacturing; think about the value of all that component manufacturing; into North America from EU, China and Southeast Asia.

Hundreds of billions in value and tens of thousands of jobs.

20) That's why this is such a big day.

The USMCA is official in effect starting today. For corporations that want access to the U.S. market, the best location for future investment is in North America.

Today ends the era of offshoring U.S. jobs.

21) Say that again, with a smile on your face.

Today, July 1st 2020, officially ends the era of offshoring U.S. Manufacturing Jobs.

The media won't talk about it.... because President Trump delivered this outcome.

22) Today is a very good day.

/END