Larry Kudlow (CNBC, NAFTA)
May 19, 2017|
Larry Kudlow (CNBC, NAFTA) by The Financial Exchange
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
The topic of NAFTA. Is coming to the forefront. And you've got some very qualified people in the name of Wilbur Ross that are going to be instrumental in negotiating it. We're joined now by Larry Kudlow from CNBC to talk to us about NAFTA Tyler Perry you. I what was your thought on the initial design NAFTA is what 23 years old lady who initially what was your thought on the NAFTA agreement. I spoke pretty good you know not a free trader and I think you have been north American free trade zone. And the flow of goods. And services. And I summit that labor although that's gonna be. We fit but nonetheless I think it generated. A pretty good economic growth that says they're not gigantic. But when it comes to that site are those. Anything to do it energy. Farming. You really break and at three countries together now that includes Mexico all right I think recently. But in the massive government trial opened up their energy sector to private investment including American. Investment would they desperately need their. And not have been much on gas that the way it ships up to what he noted good deal it that may be updated so question. Act as it. Has any country benefited from NAFTA more than the another country like his is it more worried. Is it more or slanted towards Mexico or Canada the United States or is it pretty evenly balanced. Pretty easily bounce submit actually I think about the benefited board through. I mean the border security issue he can't stand in the way of that discussion so if you you know uprooted border security. You know from the lack of clarity. Illegal immigrants coming across here that's been a problem it's certainly for our borders states in the labor market you know I get that I think that is to be. Improve. Whether it's defense or all but but mostly I think you have to have a a a season deport you really have to have a you know if they come across. At the right back I really would happily that I'd you. And our you know automobile companies that benefit enormously. Because. There's no more time when you know that domestic contacted the US car. Is that a 100% there may be 70% got auto parts going back support other assembly line. Type features going back and forth in the US and Mexico and then regarding the Canadian side is Sam and energy. Now there are issues up there with the they have long time issues about. A provincial government subsidized woods for example. Soft soft lumber. So that that's that's gonna be worked out and you know he should take a look at their quite some odd years but basically I think it's work they've done a good job. What did you how would you leave if you're talking to Wilbur and in these to have your had a coffees it would what can we do. To increase trade. Increase you know wages in Mexico to improve GDP in the United States and to improve the economy of Canada what would how how do you do. That from nervous perspective. NAFTA better than it already if you like it now but give us peace one or two things he could do to make it better. Well what the issues with that is taxes. We always had it. When NAFTA was originally signed but not mistake it. Mexico's value added tax which is placed on all their domestic. Goods but also applies to imports. So America at that time I think it was 5%. And they claim. That would update there tyrant of the act and actually that was about this game. As our state and local taxes. Which attack imports. But you know and ensuing years. That tax that that tax has got to about ten or 11% now I think it's like you know 70%. And I think that's the big issue. Now my issue. They don't get in free it's not true that there imports command duty free because. We don't have it that for thankfully mine and it but our state and local tax burdens have gone up. Our average. Local tax the Battle Creek that happens that but your biggest states. The do's and most traded. You've got you know taxes 8910%. And so. You know we have a tax on imports and do wrong this day Mexico gets rewrite but. They kept raising their bad I really I don't know I have to look exactly. At the actions of that deal but I'm pretty sure Mexico out of backpacks around by respects and they promised not to rate and they broke their profits. So there is an unfair trading back there that's fit that's one gigantic issue the second point quickly as. Mexico needs to grow faster. You know devastated economy. As just obviously has always is the case they are being not delivered the goods. And they always tried to stop outside bet. Very protectionist. So you had a strong in Mexico has grown. 3456%. Which would be more in line with. In no way it developing country rather than one or 2% they'd be in better shape. There workers would stay home okay. We all benefit from the knock off effect of the stronger Mexican cop. So that you know they need to grow. They need to curb their bad acts. And we should have sound currency deal with that you know one of the crazy as the year Canada but Mexico. That debate so fluctuates wildly. And now you you can argue that the dollar has fluctuated wildly lasted two years and I would agree with that. But I think we need some kind of currency coordination which we've never really had. Very good Larry thank you very much for your time we appreciate our. Actually Larry Kudlow CNBC joining us today on the financial exchange and that value added taxes always been. The big bone of contention both Canada and Mexico have been exceedingly high bats and that makes our. Exports much less attractive.