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REPLY TO THREAD
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Subject
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HUGE! Canadian Economy Halts – GDP Growth Drops to 0.1 Percent - Trump closed NAFTA loophole
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Original Message
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[link to theconservativetreehouse.com (secure)]
"Within the new USMCA the critically important NAFTA loophole was closed.
Over the past three decades both Canada and Mexico structured key parts of their independent trade agreements to take advantage of their unique access to the U.S. market. Under the existing NAFTA, Mexico and Canada generate billions in economic activity through exploiting the NAFTA loophole.
China, Asia (writ large), and the EU enter into trade agreements with Mexico and Canada as back-doors into the U.S. market. So long as corporations can avoid U.S. tariffs (and rules of origin that pertain to those tariffs), by going through Canada and Mexico they would continue to exploit this approach.
By shipping parts to Mexico and/or Canada; and by deploying satellite assembly facilities in Canada and/or Mexico; China, Asia and to a lesser extent EU corporations exploited a NAFTA loophole for rules of origin on finished goods.
Through a process of building, assembling or partially 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.
Why deal with the U.S. when you can just deal with Mexico, and use NAFTA rules to ship your product directly into the U.S. market?
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 Donald Trump, now President Donald Trump, wanted to shut down that loophole and renegotiate NAFTA."
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