 Okay, we're back real live, and that is Carlos Suarez right there, and he's at the University of America, the Americas Puebla, which is 20 miles southeast of Mexico City, am I right? Okay. Well, if you're walking, if you're walking, it's a big difference. Yeah. They're calling this show NAFTA 2.0, Renegotiating Free Trade, Trump Style, uh-oh. So can you tell our listeners exactly what the North American Free Trade Agreement is, and who it used to involve, and what it used to say before he pulled the plug on it? Let me unpack some of that with you, see that's a lot of information, Carlos. So just for me. So we had a trade agreement between the U.S., and Canada, and Mexico that was in place a long time. And it's still in place. This is that Trump has been attacking it, is that right? Did he effectively terminate the agreement? No. So his remarks have only been a statement of intention, and in fact the earlier agreement day-to-day still exists, is still there, is still binding on the parties. Okay, the other thing is, you've been following this year into international law, and in fact you're the director of the International Diplomacy School at the university in Puebla. You know, I, in my youth, and I'm still very young, in my youth I had never heard that the president would go out and negotiate or make threats to terminate or reorganize trade agreements, and that there was a whole, you know, group of agencies in the United States and in most countries that went and did this. The president himself would not do this, but, and I'm thinking, and I'd like you to just tell me yes or no, I'm thinking this is quite remarkable where Trump as president all of a sudden, without the benefit of those agencies, decides he wants to change it all, terminate it, modify it, whatnot. Is that usually the president's role, or have I just not been following it? Well, in a nutshell, at least in the United States, foreign economic policy, trade policy is divided, so the president does negotiate, and he is the lead, he's the head of state, so he can initiate a process of negotiating this treaty. It does not become law until the U.S. Senate ratifies it, so the Senate has the powers and the needs to ratify the treaty, and that's why, again, this is going to sometime well into the year where there will be a negotiation in the Congress to decide whether they accept the terms of this treaty or whether they want to be a work in progress, although the parliamentary system there, the prime minister does control the majority of the parliament, and so, you know, he can get it through easier. In our case, the president's going to have to negotiate. We will see what happens with the Senate. The House will have a say, but they do not actually ratify it. They can articulate their interest. Okay, the other thing that I thought I heard say was that the deal with Mexico was, at least for a time, going to be a separate deal, and the deal with Canada was going to be a separate deal, and it was not going to be like the NAFTA of the old time was going to be U.S., Mexico, and then another one for U.S., Canada. Where are we now on that? Are we back together in a three-party deal? The provisions, well, over the last five to six months, the U.S. has put the Canadians in the U.S. Each of them have their own different interests in a way that didn't exist 25 years ago, protection over pharmaceuticals and patents and digital, in some ways, just upgraded it to the moderate. It's not remarkably different than it was when he came into office, though, huh? A car can be assembled here in Mexico. So what about Canada versus Mexico? I mean, is the deal, say, on cars, on cars that's being made now that Trump is making with Mexico the same, the 60 percent rule, as a deal with Canada? Or is it different? Yeah, yeah. Also, Canadian workers, is it now a higher percentage, something like 40 to 45 percent of the cars assembled by workers who earn $16 an hour or more? And what that really means is that, you know, might be given some incentive to manufacture more. And here again, it's not an alternative to pay a two and a half percent tariff if you have, let's say, more workers from Mexico and fewer workers. They could do, for example, Mexico really is one of the main manufacturers to be redirected to Asia or Europe and simply go to a different market. Or some of them may choose that manufacturer in the U.S. or in Mexico. There's here in Pueblo. There's an Audi factory. I'm going to direct some of their... Yeah, I just wonder, I mean, what's the reason for insisting on a $16 an hour wage? Is that supposed to help Mexico? Is it because he wants to help Mexico? The workforce comes from the U.S. It's not clear that's going to translate to more in the U.S., because the U.S. itself is becoming a more robot-oriented manufacturing, more to support the workers in the U.S. and vehicles. So if it's being made more in the U.S. or Canada, the cost is going to go on the consumer. So again, who wins? Weapon, those costs to the consumers, and so it kind of washes out. Yeah, you know, before we take this break, Carlos, I just want to offer a thought I've had and see what you think about it. So, you know, Trump has been embroiled in the Kavanaugh confirmation, in fact, a country, if not the world. I'm sure people in Mexico watch the hearings just the way we do. And so the United States government is all distracted into this Kavanaugh confirmation. And all of a sudden, in the middle of that, we get the good news about NAFTA. And my reaction, my reaction is, well, this is a distraction from the distraction. In other words, this is only so he can say that he did something and get people's attention off this failing nomination. What do you think? What are the people around you think? The Greek or the president. Now, mind you, the way we got there was a pretty nasty one. So while the outcome at the end is okay, look back at the 13 months in which there was this nastiness towards the very strong partner to the considerable credibility of the U.S. The way we can't forget it was a pretty ugly process. Yeah, it leaves a scar somehow. And I guess I take it from what you say is that, you know, and you're into international diplomacy, international relations, and this kind of negotiation. The United States could have, let's assume this is a good result, and we'll evaluate that some more after the break, but let's assume this is a good result. We, the United States, could have gotten to this result without any acrimony. It would have evolved by itself with gentlemen sitting at a table, am I right? And that's what traditionally happens. Absolutely. Yeah. Absolutely. And again, because in many ways, even the way the U.S. came into this at the beginning, they were demanding some very just, you know, non-starters, some unrealistic, for example, wanted a punch, and you need certainty, you need predictability, and so I didn't see about these things. So that was just one example where the U.S. was very unrealistic. The other, and we can talk more about this after the break, is, you know, for example, the dairy industry in Canada, the president was obsessed with all this, I think, as a way of making it sound like he was going to somehow break open this massive market. It's a small piece of the big trade that occurs. In the right context, what are we really talking about for the U.S. and Canada? So yeah, we'll talk about that. I also want to talk about the relationship, if any, between the negotiations around NAFTA and immigration and the wall, whether that played any role at all. We'll be right back with Carlos Suarez in Mexico right after this break. This is Think Tech Hawaii, raising public awareness. It's choose to treat it with the help of a physical therapist. Treat pain through movement and exercise. No warning labels required, and you get to actively participate in your care. Choose to improve your health without the risks of opioids. Choose physical therapy. To talk story with John Wahee every other Monday here at Think Tech Hawaii, and we have special guests like Professor Colin Moore from the University of Hawaii who joins us from time to time, who talk about the political happenings in this state. Please join us every other Monday. Aloha. Okay, we're back with Carlos Suarez, and he is in the University of, let's see, of Pueblo in Mexico. Of the America. Of the America. Of the America. Yes. And I will come down to say hi. Many of us really enjoy these conversations, and he runs the International Diplomacy School, International Relations School at that university. So he's in a perfect position to look at this objectively from Mexico. Yeah, so let me go with my question first, and we can go with what you were talking about over dairy and other specific terms that came out of it in a tripartite agreement. What about, you know, I mean, Trump came into office on the wall and being up on Mexican immigrants. So where was that, if this was such a reflection of Mexican-American relations I didn't hear anything about inclusion of the terms related to immigration of the wall or estranged children, you know, in connection with NAFTA. What happened? Yeah. Well, in effect they were delinked. They were not really part of the negotiation over this trade agreement. And maybe it's a good way of contrasting NAFTA with what you might see in the case of the European Union, which is a deeper level of integration. It is a trade agreement, a customs union, but it's also integrating social, political, foreign policy. You know, trying to create a, you know, immigration policy. Mexico, the United Canada do not have that. So this is really a focused trade agreement on trade and good. So much about these others. And, you know, Mexico will remind in efforts to address, and not just Mexicans, but Central Americans that come through Mexico. Again, they have been delinked. They are not part of this. The decision of the agreement is labor and some issues related to environment in ways that it didn't not sufficient or not. But it is important that we have to at least note that there was some. The question earlier I talked about the percentage that has to be, you know, assembled by workers that make $22 an hour. The way of trying to stimulate maybe some more production in the U.S. whether that'll happen is another question. But immigration off the table, the wall, stupid idea that the U.S. has is silly. Yeah, looking at the dark side of the negotiation, suppose no deal had been reached. Suppose we were left with an angry Trump. Well, I suppose he's angry all the time anyway. But, you know, and no deal. And so he would go to Congress and or the Senate. He would say, I want to pull it. I want to terminate the whole thing. I don't want to nafta. I don't want to nafta with Mexico. And I don't like Canada either. No agreement. What would happen? And you can tell me about all three countries, but make sure to tell me about what would happen to the U.S. And I mean, there are just too many powerful interests, too many who benefit from this relationship, whether they are importers of vested interests, too powerful. And here, you know, a very complex set of issues. And, you know, for Trump and maybe those who see the world in this very simplistic black-and-white view, you want a simple answer to everything. You know, they're ripping us off. And so we have to, let me just show quickly one chart. I have the second one, which is a look at the, you know, pros and cons of free trade. Obviously trade affects different groups differently. There are winners and losers. In society, we tend to win from trade, but there are always losers. And they tend to be weaker. They tend to be marginalized, et cetera. And finally, the third graph I have here is a map that illustrates the trade itself that happens between these three countries. You know, a trillion plus a year. And in general, again, the short answer is that Canada sells more to the U.S. than Mexico. I'm sorry, than Mexico, of course it does. The trade from Canada to the U.S. is 20 billion a year. And from the U.S. to Canada, 280. So there is a slight deficit. Canada does sell us more than we, you know, U.S. sells them. With Mexico, it's also the case. Mexico will sell 300 plus billion to the U.S., and the U.S. will sell 250. So what we've heard a lot from Trump is that these deficits are just bad and simple because those deficits also mean that as consumers in the U.S., you can go to Costco and buy a refrigerator or a television or, you know, some nice vegetables at a price that would be doubled if you had to assemble that in the U.S. So consumers get benefits from it, obviously, and others who then begin to import it. I mean, even Costco has benefited from this trade in ways that are quite dramatic both ways. Costco in Mexico, Costco in the U.S., whatever. The manufacturing industry, they've all benefited substantially from it. It has shifted trade, no doubt, and there are jobs that have come south. But that's the nature of the global economy. The markets go where the trade will push them. Do you like this deal, Carlos? Yeah. Do you like this deal? I'm sorry, what? Do you like this deal? I mean, if you had been, let me anoint you president of the United States for a minute. Would you have done it this way? In substance, in terms? Or would you have done it another way? Do you like it? That's maybe some, you know, with Trump we've seen just a very different style that is both not just the changing of the norm. The United States in this partnership is clearly the U.S. has tended to kind of bully us. For example, one of the provisions that the U.S. wanted, which it did not get, it had to give up, was there is a dispute settlement mechanism in NAFTA. Whenever one of the countries feels they're being cheated or, you know, dumped a tribunal and basically challenged it, the U.S. wanted to get away with that completely, and that is the bigger bully partner. So, NAFTA was able to maintain this in the new agreement. They did not get rid of it despite what the U.S. was trying. And this gives Canada and Mexico still a remarkable way in which the Trump administration treated Canada in the last few days. We don't like that trade negotiator. The foreign minister of Canada, Christian Freeland, you know, just saying we don't like her as a person. I mean, they're very personal attacks in a way that you just, you know, it doesn't win you brownie points. It may with your base sour taste. Carlos, does this bring the negotiators for Mexico and Canada closer together? In other words, do they share ideas, do they share notes and share strategies against the U.S.? Oh, absolutely. And when, for example, when Canada was not included in, you know, six weeks ago, Mexico was very much saying, well, we want them, and every chance he could get, you may recall there was a strange press conference about them, you know, normally you don't do that, but again, everything is, not forget about Canada, and you know, this is a, and so they do partner and they help support each other. They have different interests, but in general they are very good relations. Yeah, and congenial, yeah. So one last thing is where are we going from here? You mentioned early on that not all the terms had been agreed and certainly none of it has been ratified by the United States Senate. So where are we going from here? Are there going to be hiccups going forward, even in settling this down? You know, he said, well, he made a deal, but maybe the deal isn't really made yet and maybe there'll be problems in completing it, am I right? Yeah, absolutely. I mean, each of the three respective countries have, because of the parliamentary system, it tends to be a little bit easier. The majority controls the parliament, the prime minister is a member of the parliament, so he will put it through. Now it won't be without its own turmoil and discussion, and it is an election year for the next year too. With the U.S. Congress, again, the Senate, we don't know today what the outcome will be after the midterm, but today it's a very closely divided, you know, camp. The Senate must ratify it and that means there will be a discussion, a debate, a dialogue, and you know, there will be strongest because there's a very powerful support for it in general. And the same in Mexico. And Mexico has its own dynamic. December 1, so far he has been in terms of the agreement itself, but people will have interest in maybe wanting to fine tune aspects of it. So all three countries are likely to want to tinker with it a little bit, perhaps trying to keep the overall framework, but there will be a continued dialogue, continued negotiations. So suppose I represent, I'm a lobbyist, I represent an American company which doesn't feel it got a good shake in what Trump negotiated, say, with Mexico. I can go to my favorite senator now after whatever he negotiated is delivered to the Senate for approval. I can go to my favorite senator and try to change that and say, my favorite senator, don't approve that. Change that. I still want what I wanted before. And you can override Trump on that. This is possible, right? Yes, absolutely. Of course. So there will be, again, and like everything, it always comes down to a few key people, the sort of the swing vote that might be in the electoral districts, the cultural interests that want more. But I think my sense is that overall the agreement that has been, you know, outlined now, and we're just looking at the fine details, but overall it is not the, when Trump was announcing, we're going to do away with it, close it, you know, revoke it. That hasn't happened. And so that's why I go back to, really, this is a NAFTA 2.0. It may have a new name, but that's just changing the color of your tie. It remains a trade agreement between these three countries that simply fine-tuned parts of it on the margins. And it does add some new importance to McGottas there. So we might like the outcome. We have to be wary of how we got there. Yeah. And it sounds to me, we're out of time here, but it sounds to me like, that is the upshot of this, that the relations between the United States and Mexico, for that matter, Canada, have been damaged in the process. That's what we have at the end of this long-term and acrimonious negotiation. Well, thank you, Carlos. You know, I would just say, interestingly, with Mexico, it wasn't quite as acrimonious in some ways. It represents actually a cooperation, because looking before this, the U.S.-Mexico relationship has been very nasty and ugly. So a very different outcome. But with Canada, where the real naff team has occurred. Thank you, Carlos Juarez. The University of the Americas in Puebla, which is 60 miles southeast of Mexico City. Are you going to write? Straight East. Straight East. Straight East. I'm making a map. Thank you so much, Carlos. We'll see you in two weeks. Thank you. Aloha. Aloha.