Beating off the NAFTA bogeymen.

The North American Free Trade Agreement (NAFTA) might not make it to New Year’s. Who knows? Mr. Trump might just like to go out of this year with a clean slate. He has promised his ignorant and uncaring sycophants a pyrrhic victory and he might as well deliver the killing blow.

It looks like the only partner in the deal that understands the ramifications of killing NAFTA are the Canadians. The Mexicans are too angry at the racism represented by the wall. The people hurt the worst by the move will be the Americans. And the one thing we know for sure is that it will take more than six months to pull the deal apart. Like the Brits with Brexit, there are likely too many aspects of the North American trading situation that Mr. Trump does not understand.

You would like to think that Canadian Prime Minister Justin Trudeau knew what he was doing the other week in China. That might be opportunity lost for now but it can come back. Trudeau seemed to forget one of the cardinal rules in doing business with China. If you want to do business with China, you sell the relationship first, the product sales have to follow.

But on the positive side, Canada has deals on the offing now with Europe, the Trans-Pacific Partnership with the main player Japan and with China. That adds up to far more than just a replacement for the cross-border trade with the United States.

What it will mean in the long run will be that Canada can cherry-pick what it wants to trade with all four of the major world trading blocks. If the Americans stay with the Trump approach, that country will be heading downhill to recession and turmoil. They just will not be pulling Canada down Trump’s rabbit hole with them.

What many of us observers sitting here in the bleachers of Canada will be looking forward to will be the ramifications for the North American auto industry. There seems to be a growing body of confidence in Canada that we can live better without NAFTA. While we were originally willing to talk modifying the trade situation, there is no way we will make the concessions that Trump’s unskilled negotiators are demanding. These are Trump’s NAFTA bogeymen.


Copyright 2017 © Peter Lowry

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