What comes ‘AFTA’ NAFTA?

Back in the first round of North American Free Trade Agreement (NAFTA) negotiations, it was Prime Minister Brian Mulroney who caved in to the American negotiators. In this upcoming go-around, our Canadian negotiators have to show a great deal more backbone. We also have to have a game plan in place just in case Donald Trump’s negotiators take their ball and bat and go home.

Mind you, Donald Trump facing the combined fury of North American automobile manufactures would probably allow a grandfathering of that sector. We can assume that the older Auto Pact would survive.

But from there the future is less clear. Replacing as much as $400 billion in non-automotive, two-way trade with the United States would be a gut wrenching experience. A tariff war would be for losers and more serious than the Mexican wall.

The beneficiaries of no NAFTA would be China and Europe. China has already surpassed Canada to become the American’s number one trading partner. The only problem is that to channel U.S.-bound goods from Canada through China adds heavy shipping costs and serious price increases.

Just maybe, before things get too far off the rails, someone has to convince Donald Trump that he will be beggaring his own base if he loses NAFTA. There would have to be a transitional period to soften the economic blow but there seems no way Trump could win a second term at the White House in the face of such a stupid move.

His ‘show and tell’ for his base the other day when he was showing off a fire truck for the kids in all of us, missed making the point. This seems to be a foolish negotiation in which he has given away his objectives while the Canadians and Mexicans have been sitting back saying little. The opposition parties in Ottawa have been demanding that Trudeau and Company say what their objectives are—which would be stupid given the circumstances,

Of course, Canada will stand its ground on Trump’s demands on softwood lumber. We have already won that case more than once. And we are not about to give up an adjudication process that seems to work.

The Harper government was willing to turn on Quebec and weaken our supply management for the Europeans but we would be crazy to do it for the Americans. What would be the point of beggaring our dairy industry the same way the Americans are destroying theirs?

If it all ends up as the status quo, is that a win?


Copyright 2017 © Peter Lowry

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