Trump to notify Congress in ‘near future’ he will terminate NAFTA

Mexico’s President Enrique Pena Nieto (L) US President Donald Trump (C) and Canadian Prime Minister Justin Trudeau, sign a new free trade agreement in Buenos Aires, on November 30, 2018, on the sidelines of the G20 Leaders’ Summit. (AFP)
Updated 02 December 2018

Trump to notify Congress in ‘near future’ he will terminate NAFTA

  • Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto signed a new trade agreement on Friday known as the United States-Mexico-Canada Agreement (USMCA)
  • Trump’s decision to set in motion a possible end to largely free trade in North America comes amid some skepticism from Democrats about the new trade deal

ABOARD AIR FORCE ONE: US President Donald Trump said on Saturday he will give formal notice to the US Congress in the near future to terminate the North American Free Trade Agreement (NAFTA), giving six months for lawmakers to approve a new trade deal signed on Friday.
“I will be formally terminating NAFTA shortly,” Trump told reporters aboard Air Force One on his way home from Argentina.
“Just so you understand, when I do that — if for any reason we’re unable to make a deal because of Congress then Congress will have a choice” of the new deal or returning to trade rules from before 1994 when NAFTA took effect, he said.
Trump said the trade rules before NAFTA “work very well.”
Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto signed a new trade agreement on Friday known as the United States-Mexico-Canada Agreement (USMCA).
Trump’s decision to set in motion a possible end to largely free trade in North America comes amid some skepticism from Democrats about the new trade deal.
The US landscape will shift significantly in January when Democrats take control of the House of Representatives, after winning mid-term elections in November.
Presumptive incoming Speaker of the House Nancy Pelosi described the deal as a “work in progress” that lacks worker and environment protections.
“This is not something where we have a piece of paper we can say yes or no to,” she said at a news conference on Friday, noting that Mexico had yet to pass a law on wages and working conditions.
Other Democrats, backed by unions that oppose the pact, have called for stronger enforcement provisions for new labor and environmental standards, arguing that USMCA’s state-to-state dispute settlement mechanism is too weak.
The leaders of the three countries agreed on a deal in principle to replace NAFTA, which governs more than $1.2 trillion of mutual trade, after acrimonious negotiations concluded on Sept. 30.
Trump had vowed to revamp NAFTA during his 2016 presidential election campaign. He threatened to tear it up and withdraw the United States completely at times during the negotiation, which would have left trade between the three neighbors in disarray.
The three were still bickering over the finer points of the deal just hours before officials were due to sit down and sign it.
Legislators in Canada and Mexico must still approve the pact.
Trump had forced Canada and Mexico to renegotiate the 24-year-old agreement because he said it encouraged US companies to move jobs to low-wage Mexico.
US objections to Canada’s protected internal market for dairy products was a major challenge facing negotiators during the talks, and Trump repeatedly demanded concessions and accused Canada of hurting US farmers.


Gulf economies to take coronavirus exports hit says S&P

Updated 17 February 2020

Gulf economies to take coronavirus exports hit says S&P

  • S&P expects oil prices to remain at $60 per barrel in 2020 and decline to $55 from 2021
  • The ratings agency expects the impact on the banking sector to be low, with little direct exposure to Chinese companies

LONDON: Gulf states already hurt by a weak oil price could reap further economic pain from the impact of the coronavirus on their exports, S&P Global Ratings warned on Monday.

The ratings agency believes there is a risk that the economic impact of the virus could increase unpredictably with implications for overall economic growth, the oil price and the creditworthiness of some companies. Still, its base case scenario anticipates a limited impact for now.

“Given the importance of the Chinese economy to global economic activity, S&P Global Ratings expects recent developments could weigh on growth prospects in the GCC, already affected by low oil prices and geopolitical uncertainty,” it said in a report.

Although the rate of spread and timing of the peak of the new coronavirus is still uncertain, S&P said that modeling by epidemiologists indicated a likely range for the peak of between late-February and June.

Notwithstanding the spread of the virus, S&P expects oil prices to remain at $60 per barrel in 2020 and decline to $55 from 2021.

It sees the biggest potential impact on regional economies to be felt in terms of export volumes. S&P estimates that GCC countries send between 4 percent and 45 percent of their exported goods to China, with Oman being the most exposed (45.1 percent) and the UAE the least exposed (4.2 percent).

Beyond the trade of goods, the Gulf’s hospitality sector could also feel the effect of reduced tourist arrivals with hotels and shopping malls likely to suffer. The impact could be further amplified because of the high-spending nature of Chinese tourists.

On-location spending by Chinese tourists is the fourth largest in the world at $3,064 per person, according to Nielsen data. About 1.4 million Chinese tourists visited the GCC in 2018 with expectations of that figure rising to 2.2 million in 2023, and with the UAE as the main destination.

Chinese passengers also accounted for 3.9 percent of passengers passing through Dubai International Airport in 2018.

S&P said that if the effect of the new coronavirus is felt beyond March, the number of visitors to Expo 2020 in Dubai could be lower than expected.

The ratings agency expects the impact on the banking sector to be low, with little direct exposure to Chinese companies.