THE HINDU Editorial Vocabulary - October 3, 2018 - The new deals — on U.S.-Mexico-Canada pact

The new deals — on U.S.-Mexico-Canada pact

After more than a year of intense negotiation, the U.S., Canada and Mexico managed to arrive at a revised trade agreement on Sunday to replace the quarter-century-old North American Free Trade Agreement (NAFTA). Even though the deal does not do anything new to promote the cause of free trade among the North American nations, it achieves the objective of averting any significant damage to the international trade system. Sadly, this is the best anyone could possibly hope for in the midst of the global trade war that began this year. 

When it comes to the finer details, the U.S.-Mexico-Canada Agreement (USMCA) makes several changes to NAFTA, which U.S. President Donald Trump had promised to scrap. The most prominent changes are the tweaks to production quotas applied to Canada’s dairy industry, which were intended to help protect it by restricting supply. Under the new deal, Canada will have to allow American dairy producers to compete against locals, a move that will favour Canadian consumers. The U.S. agreed to retain Chapter 19 and Chapter 20 dispute-settlement mechanisms as a compromise. This will help Canada and Mexico deal with protectionist duties imposed by the U.S., often under the influence of domestic business lobbies, against their exports.

Not all the amendments, however, are congenial to the prospects of free trade. Many are simply hard compromises that Canada and Mexico may have made just to defuse trade tensions with the U.S. And not unlike other free trade deals entered into by governments, the present one attempts to micromanage trade in a way that benefits specific interest groups at the cost of the overall economy. The new labour regulations and rules of origin will add to the cost of production of goods such as cars, thus making them uncompetitive in the global market. The USMCA mandates a minimum wage that is above the market wage on labour employed in Mexico, yet another move that will make North America a tough place to do business. Foreign investors may now have fewer protections from unfriendly local laws as the accord does away with resolutions through multilateral dispute panels for certain sectors. But it is its potential to end up as a double-edged sword for the U.S.’s major trading partners that Indian policymakers may find instructive. Announcing the USMCA, Mr. Trump signalled he would now extend his ‘all or nothing’ approach to resetting trade ties with the European Union, China, Japan and India. Terming India “the tariff king”, he said it had sought to start negotiations immediately, a move he reckoned as a bow to the power of tariffs that a protectionist U.S. could wield. In dealing with an emboldened Trump administration, India’s trade negotiators will now have their task cut out if they want to protect exporters’ access to one of the country’s largest markets for its services and merchandise.

Vocabulary

Intense: extreme force, degree, or strength.

Example: The job demands intense concentration

Synonyms: extreme, great, acute, fierce, severe, high, exceptional, extraordinary

Avert: turn away one's eyes or thoughts

Example: She averted her eyes during the more violent scenes

Synonyms: turn aside, turn away

Significant: sufficiently great or important to be worthy of attention; noteworthy.

Example: A significant increase in sales

Synonyms: notable, noteworthy, worthy of attention, remarkable

Scrap: a small piece or amount of something, especially one that is left over after the greater part has been used.

Example: I scribbled her address on a scrap of paper

Synonyms: fragment, piece, bit, snippet, shred, offcut, oddment, remnant

Influence: the capacity to have an effect on the character, development, or behavior of someone or something, or the effect itself.

Example: The influence of television violence

Synonyms: effect, impact, control, sway, hold, power, authority, mastery, domination

Defuse: remove the fuse from an explosive device in order to prevent it from exploding.

Example: Explosives specialists tried to defuse the grenade

Synonyms: deactivate, disarm, disable, make safe

Mandate: an official order or commission to do something.

Example: A mandate to seek the release of political prisoners

Synonyms: instruction, directive, decree, command, order, injunction

Instructive: useful and informative.

Example: It is instructive to compare the two projects

Synonyms: informative, instructional, informational, illuminating, enlightening

Reckoned: establish by counting or calculation; calculate.

Example: His debts were reckoned at $300,000

Synonyms: calculate, compute, peg, work out, put a figure on, figure

Merchandise: goods to be bought and sold.

Example: Stores that offered an astonishing range of merchandise

Synonyms: goods, wares, stock, commodities, lines, produce, products