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So NAFTA is safe and the Mexican economy is not The US has a provision for guest workers under
going to be disrupted byTrump. H2A. In 2016 US imported 134,000 guest workers.
The request for H2A visa have steadily increased
India’s trade with the region should increase in from 55000 in 2011. Even Trump's son Eric has
2017 from the 30 billion dollars in 2016, given applied for 29 visas for workers for his vineyard.
the rise in commodity prices and the expected
increase of global imports by the region. It is It is, therefore, not surprising that Trump barks
encouraging to note that India’s exports to Mexico less these days at Mexico under pressure from
had increased by over 20% in 2016. Vehicles have the farm lobby. He is just trying to tweak NAFTA
become the largest exports of India to the region a little for face saving rather than rip off theTreaty
at 3.4 billion dollars. The vehicle exports have as he threatened during campaign. He had earlier
been increasing significantly in recent years. claimed that NAFTA was the worst ever deal
signed by US. He has now realised that most of
Indian investment in the region is coming down. the Mexican factories which export to US using
Some companies such as Havells and Aegis NAFTA belong to his own American buddies who
have sold off their Latin Americans assets and have set up assembly and manufacturing units
operations. One of the sugar mills of Renuka in in Mexico to cut costs. In fact, Mexico has helped
Brazil is being auctioned by the court in the first US companies to reduce their over dependence
week of September. Renuka, which had invested on China for manufacturing and diversify. Today
about 500 million dollars in Brazil, has already Mexico has become more competitive than China
declared bankruptcy. However, UPL, the largest in the production of cars and appliances thanks to
Indian agrochemical company, is planning more the Chinese wage rise.Trump can only bully those
acquisitions in Latin America. Its Brazilian turnover American companies who want to set up new
has overtaken its business in India. plants in Mexico but not those who are already
established there. IfTrump stops the ongoing flow
The Indian business should get inspiration from of Mexican-made products into US, the American
China’s trade of 215 billion dollars with Latin industry will suffer more since they cannot quickly
America in 2016 and its investment of 110 billion shut their Mexican shops and restart in US.
dollars and credit of 141 billion dollars to the
region. The Latin Americans want to reduce their Mexico has also hinted that it can play its trump
over dependence on China and seek diversification card. They have announced that they will reduce/
and reach out to new markets such as India. There stop import of corn and some other food products
is tremendous potential for Indian business in from US and source them from Argentina and
the large and growing market of Latin America Brazil. This has alarmed the US exporters of such
with a combined GDP of five trillion dollars and a products who are now putting pressure on Trump
population of 620 million. administration.
NAFTA is safe and Trump has become less If Trump wants to reduce trade deficit he should
dangerous to Mexico go after China with whom the US trade deficit is
a massive 366 billion dollars while it is just 66 bn
According to Economist (27 July) seventy percent with Mexico in 2016.
of farmworkers in US are Mexicans. In California it
is even higher at 90%.The farm industry, especially So NAFTA is safe andTrump is no longer a serious
the fruits and vegetable part, faces serious threat but just a minor nuisance to Mexico.
problems of shortage of workers, after Trump's
persecution of Mexicans. The American farmers According to a Pew research centre study, more
had to plough under vegetables and fruits since Mexicans have left US than arrived in the period
they did not have enough pickers.The wages have 2005-14 even before the apparition ofTrump.
gone upto 19 dollars per hour in some places.This
means that US has to increase imports of fruits The Trump Wall seems to have become like a
and vegetables. Magical Realism..Trump, the Caudillo, is set for
'one hundred years of solitude'.
5 August-September-2017
