Kansas officials expressed cautious optimism Monday about a proposed new trade agreement between the United States, Canada and Mexico, saying it appears to offer Kansas farmers and manufacturers greater access to international markets, although details of the agreement still need further study.
When international trade negotiations drag on past one deadline after another, trade negotiators are fond of saying “substance should drive timing.” They mean that talks should continue until a mutually agreeable outcome is reached. This adage presumes that style—the way in which one negotiating country treats another — facilitates the outcome.
Canadian Prime Minister Justin Trudeau said Wednesday that it’s possible a new NAFTA deal could be dealt with by Friday. A trade expert says that’s an important date.
A main point in the trade agreement announced this week between the United States and Mexico has to do with auto manufacturing.
“The current rule of origin would rise by 12.5 percentage points from 62.5 to 75 percent,” said Raj Bhala, the Brennesein Distinguished Professor at the University of Kansas Law School, and a Senior Advisor at Dentons. “75 percent of the value of a car or a truck would have to come from within the U.S. or Mexico or both to qualify for duty-free treatment between the U.S. and Mexico.”
Modern international history furnishes no more fascinating contrast than that between India and China, the ancient civilisations that have become the world’s two most populous nations, 71 and 69 years old, respectively. On August 15, 1947, the horizontal tricolour— saffron, white, and green, with the 24-spoke blue wheel — was hoisted over Delhi’s Red Fort. On October 1, 1949, the bright red field—with a big, gold star bordered by an arch of four small gold stars — was hoisted over Beijing’s Tiananmen Square.
Speaking in Kansas City last week, President Trump asked for patience for trade policies that have resulted in new tariffs on American goods. No question that trade wars are now underway, most notably with China. Outrage has greeted his approach, but is the president wrong in his reasoning? In the early stages of what may be a long trade war, we explore that reasoning and look at the impact tariffs are having on workers and businesses in Kansas and Missouri.
In escalating tariffs, Donald Trump is treading a dangerous and high-stakes path. Tariffs lock out foreign competition, but they also punish consumers with higher prices, disrupt global supply chains, infuriate allies, and impair economic growth. To Trump, though, these are mere bumps in the road to the free-trade ideal that he outlined last month in Canada.
One of the big immediate risks of the U.S.-China trade war for India and a number of other countries may be “trade diversion”.
That means products and merchandise, hit with retaliatory or counter-retaliatory tariffs by the U.S. and China respectively, will get diverted or even dumped on markets like India, Raj Bhala, Professor at the University of Kansas told BloombergQuint in an interview. “So the likes of India and Canada have already started to consider the trade defence instruments they might use against this prospect,” he added.
A trade law expert notes that the Trump administration has laid out a strong case for the positions it is attempting to defend in its trade war with China.
The trade war has begun. KU Law professor Baj Bhala, former Indian Commerce Secretary Ajay Dua and Bloomberg's Mike McKee discussed whether or not India will be caught in the crossfire as part of a Primetime Debate for BloombergQuint.
"The likes of India, and already Canada and other countries, have started to consider what trade defense instruments they might use against a prospective third country trade diversion," Bhala said.