Posts Tagged ‘NAFTA’

The Bully Pulpit of Donald Trump.

Tuesday, March 6th, 2018

President Theodore Roosevelt said, more than 100 years ago, that the White House is a bully pulpit. It means something very different to the bully in today’s White House. Roosevelt saw the bully pulpit as a position for good. Trump sees it as a position to abuse the less powerful. He is a bully in the full sense of the word.

Even Trump’s North American Free Trade Agreement (NAFTA) negotiators, meeting in Mexico City in the past week were caught off guard by the tariffs Trump proposed on aluminum and steel. He was so proud of this that he twitted his plan to bully his country’s neighbours. He is going to bring them back to the table cowering to accept his conditions for an American version of NAFTA. (Otherwise known as ‘beggar your neighbours.’)

Trump’s negotiators have repeated told him that there is little reason for Canada and Mexico to want to “Make America Great Again” the Trump way. A trade agreement such as NAFTA can be of great benefit to the economies of the participating countries but it requires goodwill and fair dealing.

The bully in Trump tells him that it should be the most powerful nation that makes the rules. While neither Canada nor Mexico are the largest producers of steel, there has been a brisk three-way business in steel between the three countries. It has meant lower prices, more variety, adequate supplies and a fair market between the three countries. Trump is sure as hell, he is going to fix that. His tariffs will greatly increase the costs for American construction and products made with steel. He is trying to put thousands of Canadian steelworkers out of work in Hamilton and Sault Ste. Marie but will jeopardize the jobs of even more in Pittsburgh and Gary, Indiana.

Trump’ followers will likely pay the higher cost for their aluminum beer cans. Canada’ aluminum smelters are located in the middle of an area of the cheapest hydro power production in North America and will carry on regardless.

Trump is waiting for Canadians to retaliate to the repeated tariff challenges for soft-wood lumber, dairy products and now aluminum and steel. He wants a trade war. He needs Canadian retaliation to get approval in his country for his trade war. It would be the end of NAFTA. That is why Canada is carefully counting to ten each time the bully makes a move.

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Copyright 2018 © Peter Lowry

Complaints, comments, criticisms and compliments can be sent to  peter@lowry.me

The bravado of President Trump.

Saturday, March 3rd, 2018

Every time we have needed a warming thought in these blah days of winter, we have pictured President Trump running into a school to rescue children from a mentally ill person with a gun. It is similar to the bravado of a 12-year old suggesting that teachers be armed: ludicrous. There are times when that man would do himself good to shut up.

But Canada’s main concern should be the current North American Free Trade Agreement (NAFTA) negotiations in Mexico City. All reports are that this session will go nowhere and the recommendation is likely to be that the discussions recess until 2019. This will enable the Mexicans to get their presidential elections out of the way and the Americans their mid-term elections for congress.

The wild card in this game is President Trump. If he reacts to the delays, as any 12-year old would, he will give six months notice of the cancellation of NAFTA. He will think that will scare hell out of the Mexicans and bring those uppity Canadians back to the table.

But the problem is that his advisers tell him that he would lose American jobs as well as Canadian and Mexican jobs. So instead, he has been attacking specific industries. Trump has actually been complaining lately that those Canadians are a bunch of con artists who have been taking gullible Americans to the cleaners for years. This is why he continues attacking Canada on an industry by industry basis: first softwood lumber and dairy and now steel and aluminum. His attacks are not only driving up costs for Americans but are jeopardizing relations between the two countries.

What Trump does not seem to understand is that Canada has been America’s best customer for many years. His problem is that Canadians will have to rely on Americans to keep the NAFTA discussions going in that country. Canadian business has to launch major sales efforts in Europe, Asia and South America to see how much American trade we can replace. We will still have trade with the United States but new tariff barriers on both sides can be expected.

The Canadian government will also be forced to impose tariffs to try to balance increased deficits in trade with the U.S. That is a no-win game but necessary. It was what we tried to get rid of with NAFTA.

The good news is that in the long run, a new American president would bring the U.S. to its senses and a better NAFTA can be written. The only difference will be that Canada will never again want its trade so tightly linked and dominated by the United States.

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Copyright 2018 © Peter Lowry

Complaints, comments, criticisms and compliments can be sent to  peter@lowry.me

The Walls of NAFTA.

Sunday, January 21st, 2018

There is more than one wall to consider when the North American Free Trade Agreement (NAFTA) negotiators meet in Montreal this week. The wall that the negotiations is creating between Canada and the United States of America is just as serious as the wall of ignorance President Trump wants to build against Mexico. The difference is that Trump thinks he is manipulating Canada and all he is doing is creating a lasting ill will between countries long known for their friendship.

In a situation as serious as NAFTA, we started with denial. We launched into the negotiations with a Pollyanna perspective. We thought that the wannabe President in Washington would talk tough but negotiate. He seems to have no intention of that. He is threatening to take his ball and his bat home and the game is over.

The clauses we felt could be improved in the agreement where brought up. We thought it would show our willingness to negotiate. We were pointedly ignored. Instead, clauses were proposed by the Trump minions that gave America the clear edge and all the power. They included a ridiculous leverage on a high percentage of automobile assembly and an automatic five-year cancellation—unless stayed. This is not negotiation, this is demanding.

The feeling is that the U.S. negotiators might not make it through a winter week in Montreal. For that matter, the Mexicans would not really want the experience either. We could have a situation where the Americans might beat the Mexicans out the door. In as much as it is Canada’s meeting, it would be awkward for us to walk out first.

But the anger Canadians have been feeling is as cold as that Arctic Vortex we have felt this winter. When that bastard Trump is not belittling Canadians and our participation in NAFTA, he is patronizing us.

Trump has been told by now to stop pushing the Canadians. He might think he can jerk the Mexicans around but they obviously need NAFTA more than the Canadians. When Trudeau did not show up in that meeting in the Philippines recently to sign off on an Asia-Pacific pact, it was obvious that he wanted it held until the NAFTA meetings either folded or were clearer.

Trudeau’s problem is that he will have lost the respect of his own people if he caves in to Trump. He is working on Plan B.

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Copyright 2018 © Peter Lowry

Complaints, comments, criticisms and compliments can be sent to  peter@lowry.me

Isn’t it supposed to get easier?

Friday, December 29th, 2017

With two years in office behind him, you would expect Justin Trudeau to be getting more adept at his job. He is not. This has been a year for criticisms, errors, lectures, let-downs and too many apologies. Were he with us, Justin’s father would not be pleased with his son’s performance. He would likely agree with us that the arrogance and elitism, his son has been exhibiting is hurting his performance.

If the fiasco with visiting the Aga Khan’s island last Christmas was limited to accepting a ride in the host’s helicopter, we could have laughed it off. It was Conflict Commissioner Mary Dawson who pointed out that Justin Trudeau had last seen the Ismaili Leader at his father’s funeral and their friendship had only become rekindled when the Aga Khan had a project in Canada that needed another $15 million in support that could be provided by the government. That had a bad smell.

What is also serious is Trudeau letting his finance minister take the opposition heat for his attempts at tax reform. If this is important enough to do, then you do it properly. Trudeau either had to fire Morneau or defend him. He did neither. He pushed him aside.

This writer has yet to forgive the prime minister for his support for pipelines that are proposed to transport diluted bitumen from the Athabasca and Cold Lake tar sands exploitation. That is in direct conflict to all his claims to protecting the world environment. He cannot have it both ways.

Our prime minister might think he is invulnerable but he cannot say he is standing up for Canada around the world and then abstain from the U.N. vote condemning the U.S. president’s promise to move the American embassy to Jerusalem. He just blew any chance of Canada taking its rightful seat on the United Nations Security Council in the next few years.

Trudeau’s excuse is probably that he did not want to annoy Donald Trump. Why not? That bastard does not respect people who will not stand up to him. We already know how Trump is trying to destroy any vestige of fair trade between our countries. Look what he did to Bombardier and our soft-wood lumber exports. You hardly use diplomatic language with a bully who does not use it himself.

To be fair to the prime minister, there are some programs of his government that have my approval. I’ll try to mention them sometime.

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Copyright 2017 © Peter Lowry

Complaints, comments, criticisms and compliments can be sent to  peter@lowry.me

Beating off the NAFTA bogeymen.

Wednesday, December 13th, 2017

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.

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Copyright 2017 © Peter Lowry

Complaints, comments, criticisms and compliments can be sent to  peter@lowry.me

Writing Off NAFTA.

Tuesday, November 21st, 2017

The North American Free Trade Agreement (NAFTA) is still on the operating table. While it appears that the gurus at Canada’s banks are giving poor odds, that seems to be what banks always do. They do appear to like spreading doom and gloom. Despite their predictions, nobody is willing to announce time of death at this stage.

If any party is about to walk out on the negotiations, it is the Mexicans. They have suffered the most insults and the most scurrilous pressure. They are also the country that cannot afford to lose NAFTA. It has become a critical factor in the country’s economy.

Mexico also has the growing concern that Canada might just be a fair-weather friend. There is just too much talk to be heard about Canada and the United States going back to the NAFTA that existed before Mexico was brought on board. And then Trump really would need that wall to keep angry Mexicans seeking redress from coming to Washington to visit him.

Mexico needs those automotive plants and the easy access to American markets for their farm products. Tourism in ‘olde’ Mexico does not cut it.

The next round of the negotiations takes place in Mexico starting this week. All the signals at this time are that the American negotiators are passed the negotiating stage. They are expected to get tough.

Canada’s quest for labor law equalization and environmental concerns have fallen on deaf ears. Neither the Americans nor Mexicans are interested. It seems nobody has any conditions to trade to make the deal.

The essential ingredients of any trade negotiation seem to be missing from this series of trade talks. Those ingredients are good will and an eagerness for success by all parties. With the good will down the tubes as signalled beforehand by Donald Trump, the resentment of the Mexicans and the obvious preparation for failure by the Canadians, we hardly want to be the odds maker in this situation.

But the key question is whether the American President can unilaterally cancel or change NAFTA without the concurrence of Congress? (And do not bet on help from the U.S. Supreme Court.) The Canadians have been working the system hard across the U.S. with governors, representatives and senators, seeking support for NAFTA. It takes six months to cancel NAFTA and Canada might just have to find out how many American legislators really are friends.

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Copyright 2017 © Peter Lowry

Complaints, comments, criticisms and compliments can be sent to  peter@lowry.me

Chuckles’ Canned Conservatism.

Tuesday, November 14th, 2017

In discussing the ebbing strength of the democracy of Canada’s Conservative parties yesterday, we never got to the major problem faced by the federal Conservatives. Their problem is one of leadership. If there ever was a good example of the mediocrity produced by preferential voting, the Conservative party faces that problem today in its leadership.

Andrew ‘Chuckles’ Scheer’s leadership of the Conservative Party of Canada should have come in a can—marked ‘Open in an emergency only.’ The former Speaker in the only majority Conservative Parliament under Stephen Harper, Scheer was the leadership candidate with the least to offer the party. He was simply the second, third or fourth choice of too many Conservative members.

A social conservative from Saskatchewan, Scheer has the perpetually surprised look of a deer caught in the headlights. You just know that he will stay there awaiting the impact.

But he got lucky lately. While the Trudeau Liberals are on a death watch for the North American Free Trade Agreement (NAFTA), the Tories found their bonanza in Provence. And Bill Morneau’s French villa was only part of his problems. While the rest of the cabinet was distracted, Trudeau’s finance minister found himself engulfed in charges of conflict of interest and being rich. And the charge of being rich became incendiary.

It seems that neither Morneau nor the Parliamentary Ethics Commissioner had the political smarts to realize she had hung the finance minister out as a target for the opposition parties. At this late stage the ethics commissioner has had to open an investigation into the possible conflict of interest between the minister’s business interests, that deal in pension programs, and his changes in tax positions of pension funds.

Few voters will have the understanding of what any investigation will find. Guilt or innocence will be irrelevant.

When ‘Chuckles’ and his pack in the House of Commons first started baying after the finance minister, we carefully explained that the finance minister was in the position of Caesar’s wife. It was not a question of guilt or innocence. It was the very inference of wrong-doing. Bill Morneau should have been asked for his resignation then.

And do you not bet that the Conservatives, with a target in their sights, are sorry now that they opened the can labelled ‘Scheer.’

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Copyright 2017 © Peter Lowry

Complaints, comments, criticisms and compliments can be sent to  peter@lowry.me

A travesty of travellers.

Friday, November 10th, 2017

The dynamic duo of Trump and Trudeau are meeting in south-east Asia this weekend. Neither has the other on their agenda. And neither has a similar agenda. They have different needs and different objectives.

U.S. President Donald Trump has the shortest list to match his short memory. His top-of-mind concern is North Korea. He is looking for answers and he is seeking support. He has already pressed the critical players such as the Chinese, Japanese and South Koreans. At the Asia-Pacific Economic Co-operation (APEC) summit in Da Nang, he will have all the side players including Vladimir Putin of Russia.

Trump will use his heavy-handed approach to try to get the lesser players in the Asia-Pacific area to strengthen their resolve to sanction North Korea. We will hope he gets more co-operation there than he seems to have gotten from China’s Xi Jinping. If we got one impression from the footage sent back from the meetings between the two leaders in China, we would say that Mr. Xi’s expression was not inscrutable: it bordered on boredom. If we have noted one thing about the Chinese leader over the years, it is that he does not suffer fools. Putting up with Trump is a lot to ask of a guy.

And since President Trump has already given APEC the finger in rejecting the Trans-Pacific Partnership (TPP), it is not on his agenda. That is despite the TPP having the possible geopolitical effect of drawing the signatories away from China’s influence and into the American sphere,

Nor is TPP seemingly on Prime Minister Trudeau’s agenda. He is stalling. Trudeau is trying to influence a more environmentally friendly and human rights based agreement. He will sign fast enough if and when Trump dumps the North American Free Trade Agreement (NAFTA) but until then Trudeau can play to the bleachers.

Just where the East Asia Summit in the Philippines fits into everyone’s agenda is not clear. Philippine President Rodrigo Duterte will have a special request for President Trump to return of the Balangiga Bells to the Catholic church in the Philippines. And if you want to know what the heck that is about, you can look it up on the Internet. (And if you believe what you read, remember that history is written by the victors.)

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Copyright 2017 © Peter Lowry

Complaints, comments, criticisms and compliments can be sent to  peter@lowry.me

The Hair harasses NAFTA hopefuls.

Monday, November 6th, 2017

The North American Free Trade Agreement (NAFTA) is still on life support. The end of his first year in office and President Donald Trump has not yet ended the more than US$ one trillion in trade between the three countries. Maybe he was waiting for some help from critics of the Canadian Prime Minister to help him make his case for canceling.

The ally, he must have been waiting for was The Hair: Former Canadian Prime Minister Stephen Harper.

Not that we would recommend the Hair for successful trade negotiations. His help in these circumstances is to pour oil on an already tense situation. The Americans are making outrageous demands on our negotiators and Harper tells clients of his consulting firm that the Trudeau Liberals are too quick to reject some of the demands. It should be noted that Harper never completed a successful free trade agreement—he kept claiming the European Community Agreement was completed but it was only finalized after the Liberals took over in Ottawa.

The Hair actually complains that Canada is aligning itself too closely to Mexico to the consternation of the Americans. (Maybe he has never heard the old adage about divide and conquer.)

And true to his extremist right-wing principles, Harper claims that Canada is wrong to put labour rights on the table along with such subjects as gender equality and Indigenous rights and concerns for environmental protection. Obviously, he seems to consider these unimportant matters.

A commentator such as myself is expected to take pot shots at those negotiating NAFTA for us but it is considered very bad manners for a previous Prime Minister. And when you consider that Trudeau even hired former Prime Minister Brian Mulroney to help out with the negotiations, it gives you an idea of the seriousness with which the situation is being handled.

Mind you, it is obvious that nobody thought of calling on Harper to help with the current negotiations. This is the guy who bickered with President Obama over the Keystone XL pipeline through the United States. As soon as Trump was in office, he put out an executive order telling TransCanada to build its Keystone pipeline. Mind you, it is likely that it will never be completed under today’s oil economics.

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Copyright 2017 © Peter Lowry

Complaints, comments, criticisms and compliments can be sent to  peter@lowry.me

Does Donald Trump even like America?

Thursday, November 2nd, 2017

If President Donald Trump takes any pride in the United States of America, he has a funny way of showing it. Did he run for the presidency as a joke or to get even? Maybe he was tired of being considered a joke? In his ignorance, Trump is giving the bird (as only a New Yorker can) to America’s two best customers and friends. You might think that is stupid. I might think it is stupid. What it can be is also a long-delayed reality for America’s friends.

Trump is trying to bully America’s two best customers over the North American Free Trade Agreement (NAFTA). The two countries combine to buy more than a third of America’s exports. If Trump thinks this is a bad deal, nobody has explained to him what it means in terms of the balance of payments. He is setting a phenomenal record as the first person in the world to gamble US$500 billion. And that is just the goods sold each year.

He insults the intelligence of Canadians. To Mexicans, he adds racial slurs. It will take a long time for Americans to repair the harm Trump is doing in race relations with many peoples.

Trump seems to be oblivious to the trade deal Canada has already arranged with the European Union, the ongoing relationship with the United Kingdom and the British Commonwealth and the ease with which Canada can make deals in Asia.

And if Trump starts to play fast and loose with the automotive sector, he will find himself in more trouble with the automobile companies and their unions than he has ever expected. It would be very interesting to know what those companies intend to do if they are faced with drawing back all manufacturing to the U.S. Would Americans stand back and be quiet as Trump bankrupts General Motors?

But for Canadians, this is not only a wake-up call but a new-found freedom. Up-front, Canada can save a billion dollars in not twinning that bridge at Detroit. Niagara Falls, Ontario can have its own outlet malls for price cutting on European and Canadian goods that Americans cannot resist. The best price winter holidays for Canadians will be in the south of France and Spain and for a little more, there are the Greek Islands.

While Canada could take a hit as hard as 2.5 per cent of gross domestic product in the first year without NAFTA, there would be a long line of American manufacturers wanting to bring some of their manufacturing plants back to Canada to take advantage of relations with markets in Asia and Europe. Trump can have his introverted Buy America, Canadians can sell to the world.

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Copyright 2017 © Peter Lowry

Complaints, comments, criticisms and compliments can be sent to  peter@lowry.me