Trump's North American Trade Triumph

For those on the left and right who were certain that President Donald Trump's presidency meant the end of global free trade ... think again. Though Trump's critics have dismissed the significance of the new Mexico and Canada trade deal, it's hard to deny that it is a welcome advance for the economy of the entire continent.

The pact will extend for years a (mostly) tariff-free North American trade zone. This was Ronald Reagan's vision nearly four decades ago -- and that legacy can now live on for hopefully many years to come.

Here's just one example of the importance of this agreement. In the area of energy production, the integration of our economies and the freer flow of energy investment capital across our southern and northern borders means more pipelines, more LNG terminals, more oil refineries and more exploration. North America is poised to be the new Middle East for energy production for the next 50 years, with all the related economic advantages that confers on our region.

One of the most favorable outcomes of the new trade pact is the provision that locks in 10 years of patent protections for new pharmaceutical drugs and vaccines. While some critics are portraying this as a sell-out to the big drug companies, the opposite is true. Patent protections for drugs invented in America reduce costs for American consumers by forcing foreign countries to help pay for the research costs (about $1 billion for each new drug brought to market) and stop free riding on our innovation.

As University of Chicago professor Tomas J. Philipson puts it in a 2018 study on the drug industry: "There is no free lunch. If neither Americans nor foreigners pay for the R&D to develop new drugs, then soon nobody will receive new treatments."

One research team that found that price controls and inadequate patent protections will prevent the development of six new blockbuster drugs each year by 2020 and more than a dozen a year by 2050. No one can benefit from a drug to cure cancer, MS, Alzheimer's or epilepsy at any price if it hasn't been invented.

The U.S.-Mexico-Canada Agreement will both save lives by accelerating medical research and reduce drug prices at home by ensuring that foreigners no longer enjoy medical innovation without paying their fair share.

Despite these virtues, Democrats in Congress are threatening to vote as a bloc to prevent passage of the trade pact. These are the same people who just a few months ago were complaining that Trump's "reckless and dangerous" trade policies were harming the economy and alienating our allies. Now he has a deal that helps the economy and unifies our neighbors -- and they are against it. They have exposed themselves as free trade hypocrites.

Opponents of the new trade agreement on the left and right have nit-picked about certain hard-to-defend features of the plan -- such as foolish wage requirements for Mexican autoworkers. But this misses the bigger point. USCMA means that free trade is alive and well across the borders of North America.

Congratulations to Donald Trump and his trade team for delivering an agreement that will promote prosperity across all three nations.

If I were brainwashed, I wouldn’t have asked the question.

Free Trade, for the last 30 years, was anything but. Full agreement.

Mercantilism? Absolutely, but on a scale even more pernicious - China sends their kids to US universities, then goes home, and with stolen US tech violates patents, copies products, and destroys companies.

The more classic example is the US selling scrap steel to China, and China selling it back to us as pots, pans, etc. Still, full agreement.

If you allow unfettered illegal immigration into the US, I agree that we cannot compete with other countries on that basis. I, however, disagree that if we decided to compete on a labor basis with other countries WITHOUT unfettered illegal immigration, that we’d lose.

I’m already seeing it in the electronics industry. Everything you can imagine is becoming a sensor platform, and people handling boards on a manufacturing line isn’t going to work any more, for example. Too many quality issues, and the traces and spaces on these boards are dropping into the microns.

You need people to load part reels onto pick and place machines, restock solderpaste, CAD/CAM, etc. You can’t have them picking up finished boards and walking them over to some manual test station.

As an example.

Even our most advanced electronics manufacturing lines are woefully backward. Horrible. Tons of room to improve, and more importantly the circuit boards are versioning now every QUARTER.

The folks making new sensors (here in the US, Germany, France, Poland, Romania) are coming up with brand new toys every week.

There are new, small, automotive OEMs cranking up every quarter now. Little companies of 40 people making new transmission control systems, and then selling out to guys like Chrysler, Valeo, Ford, Aptiv, etc.

China has worn out its welcome. I’m seeing it in electronics and automotive especially. To the extent they unfairly protect their market and expect unfettered access to everybody else’s, they are starting to feel the burn.

I think they’ll either collapse soon, Soviet Union style, or they will give up and start acting like their actual economic condition, which is extremely precarious.

I’m comparing notes, based on what I’m seeing. Bill Clinton, talking to those ship building people in Maine about how their jobs were going away, and not coming back - he’ll burn in hell for it. And those people ate it up.

However, there are people in Poland and Romania who are smart and resourceful. They build fine products, and they have good new ideas.

We should buy that stuff. At least that’s my opinion.

If Russia had an economy that had SOMETHING other than petroleum associated with it, the world would be a lot safer.

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