Posts Tagged ‘NAFTA’

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

Curating the consensus of the crowd.

Saturday, October 28th, 2017

It is most unlikely that Maude Barlow and the membership of the Council of Canadians see Canada’s future as being a pastoral society. It just appears by the collective’s recent policy consensus that this is what they want. What it might be telling us is that Maude’s days as curator for the Council could be numbered. It needs more of the strength and determination she brought to the movement back in the 1980s and 90s.

It is hardly that I disagree with any of the priorities selected by the membership. The problem is that they have selected principles over actions. Of the five top priorities of the membership there was only one pro-active item. National Pharmacare is long overdue and we should have pushed it through in the 1960s when our national politicians were still listening to us.

But the rest are platitudes. The care of our lakes and rivers is automatic and motherhood. You can get that from the Green Party, and nothing much else. Deals such as the Nestlé water grab are a matter of some serious talk with the politicians. Pipelines for bitumen from the tar sands are anathema to anyone who gives a damn about the environment.

But then you have to clear the collective’s head on the North American Free Trade Agreement (NAFTA). To fix NAFTA, you have to know what clauses and how you are going to fix them. You cannot just say you are going to protect people’s jobs. Why would you do that? Free trade is designed to get around that old, out-dated attitude. The way to handle that problem is to save the other guy’s workers. You do not tell him to get rid of child workers, you make him send them to school. You make sure nobody is being exploited. You have to be assured that all workers’ rights are safe-guarded. Then you have a level ground for your trade agreement.

Think about it: who is President Trump really protecting when he talks about an unfair NAFTA? Is he speaking of protecting the hourly-wage worker or the profits of his corporate cronies?

In a business career working with computer companies, I never saw computer automation replace a human worker that did not open up two better, more challenging jobs. The attitude should always be: if your job can be done better by a machine, it should be.

But you hardly need to worry about automation and trade deals in a pastoral society. Our Council of Canadians need to get out and tend their sheep.

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Copyright 2017 © Peter Lowry

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

Trump stands steadfast, Justin.

Friday, October 13th, 2017

Prime Minister Trudeau dropped in to the White House to see President Trump the other day. It is likely that two minutes after Trudeau left the Oval Office, Donald Trump had forgotten what they had said. It is not just that the man has a short attention span but he has absolutely no interest in what the Canadian wants. He is stuck in the tangles of his own agenda.

It is like his wall. All he wants to do is build a wall across the southern border of the United States to keep out the Mexicans who, he thinks, want to take the jobs of loyal Americans. And he hardly wants to worry about who is going to pay for the wall at this stage. He wants to build the wall and figure out how to get the Mexicans to pay for it later.

Or take Obamacare. The poor guy cannot even negotiate a deal to get rid of Obamacare. He just cannot understand why these elected politicos in Congress are so reluctant to deprive millions of Americans of their only chance for medical programs?

And, not being a politician, Trump has no understanding of how to weasel out of political promises you cannot keep. Justin Trudeau could tell him how—he is getting some practice at that himself lately.

Trump said on the platform throughout that awful campaign of 2016 that he was going to end the North American Free Trade Agreement (NAFTA). The people who were supporting Trump were too ignorant to know that the trade deal benefitted America, lowered prices and created jobs. They saw it as a threat to jobs for Americans and moving them off-shore. So, Trump promised to Kill NAFTA for them and they roared their approval.

But Trump has no clear way to end NAFTA, Under the terms of the agreement, there is a six months clause to a cancellation but American law does not make it clear how this can be done. NAFTA was approved by Congress more than 25 years ago and Congress is not about to let Donald Trump usurp their authority. Whether Congress controls the agreement or the American President can unilaterally cancel it could end up being decided by the U.S. Supreme Court.

Justin Trudeau’s father once made some remarks in Washington about Canada-U.S. relations being similar to sleeping with an elephant. Donald Trump has turned out to be a nightmare.

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Copyright 2017 © Peter Lowry

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

How’s the kitchen coming Chrystia?

Friday, September 8th, 2017

Though not sure if the analogy of NAFTA negotiations being like renovating a kitchen comes from Canada’s foreign minister, by now she would disown the quote anyway. After meetings in Washington and in Mexico City, it is obvious that the discussions of North America’s trade agreements are going nowhere. By the time the three amigo countries get together in Ottawa there is likely to be a fist fight.

It seems that nobody is in a position to save this screw-up. History is going to have to remember Donald Trump as a master of disaster. He has sent American negotiators on an impossible task. They really cannot win agreement from people by constantly abusing them. The Mexicans are certainly mad as hell and are not going to take it anymore.

Canada is hardly going to allow our dairy farmers to be screwed the same way American dairy farmers are routinely bankrupted. And that fixed smirk on the face of Prime Minister Justin Trudeau when people mention Trump is starting to look like a death mask. The Mexicans are already pissed by Trump’s racist insults and his stupid wall.

But the Mexicans are also becoming annoyed with Canada. While the U.S. delegates simply scoff at Freeland’s environmental protection and balanced labour suggestions, the Mexican’s saw it as an attack on their labour-cost advantage. This is a three-way, two against one negotiation, when both Canada and Mexico could use an ally. Instead, they are all talking and nobody is listening.

There is no rule that says we have to resolve these questions this year or even three years from now. It would certainly be nice to find a faster solution to the softwood lumber dispute and Canada might have to apply some tit-for-tat tariffs if Trump thinks he can just ignore the existing treaties.

But an angry American Congress might have something to say if Trump tries to end NAFTA. Congress is confident that only it has the authority to accept or reject country to country treaties when the U.S. is one of the parties.

The one thing the three countries might agree on is that NAFTA needs some adjustments after a quarter century. It just cannot be as one-sided as Mr. Trump thinks it should be.

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Copyright 2017 © Peter Lowry

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

Justin Trudeau doesn’t have the chops.

Thursday, August 24th, 2017

It is often amusing when Canadian writers try to compare Prime Minister Trudeau with American President Trump. They seem to think that Justin Trudeau has been understudying for his current role all his life, while Donald Trump is an accidental politician and is only now learning that the job requires some serious time and attention.

What most observers do not see is that Trudeau is the dilettante. He is not as adept as Trump would be if the American ever exercised some discipline.

Trudeau is the bugle boy without the chops. Trump is the bully boy, angered at his own clumsiness. And it hardly helps that Trump is almost twice Trudeau’s age.

They are both products of their families. Trump honoured his father by taking over the family development business and carrying on in his sire’s tradition. Only at his father’s funeral did we realize that Justin had political ambitions. And only when we first saw him working political gatherings did we see the future of those ambitions.

There is no suggestion that Justin is like his father. He is not. He is definitely his mother’s son. Trump’s father must have been a mean son-of-a-bitch because his son so easily earns that sobriquet.

The Trudeau-Trump relationship is another matter. It is unlikely that either of them likes the other. Trudeau is probably very wary of Trump and inclined to stay away from him. Trump would see the Canadian as a pretty boy and an easy mark. If he had a building to sell, he would offer Trudeau an option.

But Trump’s assumptions about Trudeau and his government are wrong when it comes to the North American Free Trade Agreement (NAFTA). His bullying tactics hardly fit negotiations such as are required in international trade agreements. This is not a contest to see who can negotiate the best deal for their country. It is to see if they can negotiate a deal that can be sold to the citizens of the countries involved. Trade negotiations have to be win-win. Trump does not understand that.

And what Trump hardly understands is that he cannot threaten to dump NAFTA, like he did again the other evening in Phoenix, and then expect his negotiating team to do their job properly.

Trump shows his lack of self-confidence with his repeated campaign-type rallies. He just keeps on making Trudeau look good by comparison.

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Copyright 2017 © Peter Lowry

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

Plan B: Tell Trump to Get Stuffed.

Tuesday, May 2nd, 2017

Watching a Canadian cabinet minister being interviewed on the weekend was almost painful. Despite the goading of the interviewer, he refused to say exactly what he thought of the stance by American President Trump on North American trade. Like most Canadians, he would probably like to have the opportunity to tell the American President to get stuffed.

But we know he cannot do that. While it is obvious that Mr. Trump is mouthing off to hear himself sound important, it would be foolish to respond in kind. Countries deal with their international relations with diplomacy, the fact that Trump does not understand that not withstanding.

Nor is it the role of Canadian politicians to tell the American President the facts that he could get from his own trade officials. Trump’s knowledge of the facts of the North American Free Trade Agreement (NAFTA) seem deliberately limited. It might even surprise him to learn that Canadians are frustrated with some aspects of the trade deal. That is why dispute resolution takes up more than a few pages in the agreement.

And it is why the recently imposed softwood lumber tariffs are a just a form of harassment. This is the fourth time they have been imposed and they are just as likely to be dismissed again this time as they were previously. Lately China has been recognizing the opportunity to buy Canadian lumber and that looks like a more reliable market.

In all of the complaints we have heard from Trump’s White House, the lack of facts or understanding of the issues are apparent. He is playing to his audience of poor ignorant Americans who think he is doing this for them. He is not.

His threatening to end NAFTA immediately is about as dumb as the blokes in the United Kingdom who thought they could cut themselves off from the European Union overnight. Taking down NAFTA would take a lot longer than even the six months required in the agreement. It would take several years to sort out the earlier Auto Pact that became a key part of NAFTA—without bankrupting Ford and General Motors.

In his first 100 days, Donald Trump has proved he is ignorant, boorish and unsuited to be president of the most powerful nation on earth. His threat to unilaterally scrap NAFTA could cause the beginnings of a world-wide recession. That would be in nobody’s best interest.

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Copyright 2017 © Peter Lowry

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