The amendment to the North American Free Trade Agreement is being heralded by President Donald Trump as an achievement that overrides the previous trilateral pact that governs $1 trillion of trade between the United States, Mexico and Canada. However, the latest development leaves a number of issues unaddressed, notwithstanding America's trade deficit. The deal may have far reaching reverberations for the global economy and trade relations.
The “preliminary” agreement between Mexico and the US announced late on Monday implements changes to the 24-year-old Nafta with respect to cars, intellectual property, labour, digital trade and manufacturing. There is also an understanding that the new agreement will be reviewed every six years as opposed to a sunset clause that would have terminated the accord after five years.
The revised deal increases the regional vehicle production threshold from the US and Mexico to 75 per cent from 62.5 per cent originally prescribed in the 1994 Nafta agreement. The bilateral understanding also stipulates that as much as 45 per cent of car parts be made by workers earning at least $16 an hour, according to a statement from the US Trade Representative.
“There are some areas where the deal stands to be updated, notably on rules of origin, labour rights, wage minimums, intellectual property protection and digital trade,” said Cailin Birch, a senior commodities analyst with the Economist Intelligence Unit.
“While some revisions in these areas could actually help to modernise the deal, the US’s unilateral approach to this negotiation reflects a broader trend – that the US is gradually drawing back from multilateral co-operation, when it perceives this as not being on its own terms,” she said.
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Read more:
Details emerge of US and Mexico Nafta 2 deal, putting squeeze on Canada
US stocks hit record highs as Nafta replacement deal unveiled
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Markets and currencies reacted favourably to the news with the S&P 500 closing under 2,900 and the Nasdaq surging above 8,000, while Mexican peso and Canadian dollar rallied. However, the implications beyond the short-term don't bode well for global trade relations.
"This news looks rather like one of the few sunny days during the hurricane season," foreign exchange broker FxPro said. "It is increasingly likely that we will see a renewed pressure on Canada. In addition, having tasted the sense of victory in trade disputes, the Americans are unlikely to soften their rhetoric with Europe and China."
Mr Trump wasted no time in heralding the accord as a "big day for trade", however, trade unions held back from giving a full endorsement. Canada is yet to sign on and showed little enthusiasm that it is willing to acquiesce to US pressure.
“Global trade tensions have undoubtedly been the most significant source of risk in 2018,” said Hussein Sayed, chief market strategist at FXTM.
“Although investors finally see the light at the end of the dark tunnel, when it comes to China the tunnel may prove to be too long with lots of bumps along the way. However, it’s Canada what investors will be watching next,” he said.
The US and China have levied tariffs on each other this month. The $16 billion worth of duty on Chinese imports is minuscule next to Mr Trump's threat to raise tariffs on $200bn of Chinese goods, which he maintains will narrow the trade deficit with the world's second largest economy. Low inflation, a fast growing economy and a strong dollar have helped little in narrowing the gap.
The US trade deficit expanded in June for the first time in four months as imports rose and the value of exports dropped amid the escalating dispute with its trade partners.
Mr Trump has persistently used the trade deficit argument as an excuse to levy tariffs and renegotiate trade agreements.
“The US administration has a strong ideological desire to reduce the trade deficit which it believes results from unfair trade practices,” said Gregory Daco, head of US economics at Oxford Economics. “However, a renegotiated Nafta will not do much to the trade deficit as it is primarily driven by net domestic savings in the US which are likely to continue falling.”
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The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
Mohammed bin Zayed Majlis
The Vines - In Miracle Land
Two stars
Results:
Men's 100m T34: 1. Walid Ktila (TUN) 15 sec; 2. Rheed McCracken (AUS) 15.40; 3. Mohammed Al Hammadi (UAE) 15.75. Men's 400m T34: 1. Walid Ktila (TUN) 50.56; 2. Mohammed Al Hammadi (UAE) 50.94; 3. Henry Manni (FIN) 52.24.
Teams
Punjabi Legends Owners: Inzamam-ul-Haq and Intizar-ul-Haq; Key player: Misbah-ul-Haq
Pakhtoons Owners: Habib Khan and Tajuddin Khan; Key player: Shahid Afridi
Maratha Arabians Owners: Sohail Khan, Ali Tumbi, Parvez Khan; Key player: Virender Sehwag
Bangla Tigers Owners: Shirajuddin Alam, Yasin Choudhary, Neelesh Bhatnager, Anis and Rizwan Sajan; Key player: TBC
Colombo Lions Owners: Sri Lanka Cricket; Key player: TBC
Kerala Kings Owners: Hussain Adam Ali and Shafi Ul Mulk; Key player: Eoin Morgan
Venue Sharjah Cricket Stadium
Format 10 overs per side, matches last for 90 minutes
Timeline October 25: Around 120 players to be entered into a draft, to be held in Dubai; December 21: Matches start; December 24: Finals
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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Company profile
Name: Dukkantek
Started: January 2021
Founders: Sanad Yaghi, Ali Al Sayegh and Shadi Joulani
Based: UAE
Number of employees: 140
Sector: B2B Vertical SaaS(software as a service)
Investment: $5.2 million
Funding stage: Seed round
Investors: Global Founders Capital, Colle Capital Partners, Wamda Capital, Plug and Play, Comma Capital, Nowais Capital, Annex Investments and AMK Investment Office
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
Sunday's fixtures
- Bournemouth v Southampton, 5.30pm
- Manchester City v West Ham United, 8pm
More from Neighbourhood Watch:
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
