Posted on 11/12/2016 1:22:37 PM PST by 2ndDivisionVet
So here we are just days after the United States chose its 45th president and far too many of us are in panic mode over what will befall us in Southwestern Ontario when The Donald tears up all existing trade deals. Words like catastrophic, disastrous, recession and depression are not helpful and nor are they likely to happen.
First let’s ruminate on NAFTA, the North American Free Trade Agreement, that some have inaccurately reported would be torn up if Donald Trump were to win the U.S. election. Not true. He never said he would tear it up, but he did say he would renegotiate it.
That should have come as no surprise to anyone given the fact that the rust belt manufacturing regions of the U.S. are where he garnered most of his support. In these regions many blue collar workers are not gainfully employed and they, more than any other demographic, were demanding change. More accurately they were demanding jobs.
Even if the new president is bent on destroying NAFTA, it would be no easy task to do so. First, there are two other countries as signatories — Canada and Mexico. Second, NAFTA is an act of Congress and it is Congress and not the president that has the power to withdraw from NAFTA. So it is unlikely to be torn up any time soon.
What may happen, and perhaps not a bad thing, is that all three parties sit down respectfully and renegotiate parts of NAFTA that are no longer in the best interest of any of the three countries given that NAFTA is almost 23 years old.
Furthermore, president-elect Trump has clearly stated he wants to create more jobs for Americans, so it’s almost a certainty his advisers will be quick to remind him that more than nine million American workers are employed directly as a result of NAFTA. So again it would be highly unlikely the deal will just be torn up.
Still, we can never be too sure or too confident about what the new president will or won’t do, so it’s incumbent on Canada’s political and business leaders to move fast and be resolute about our relationship with the United States. Kudos to Prime Minister Justin Trudeau for moving so quickly to re-establish those links and to offer early congratulations to Trump. Reciprocal invitations to visit each other’s capitals are always a good place to start.
Applause as well should go out to Canadian Chamber of Commerce boss Perrin Beatty for offering to do the same thing with our business and corporate counterparts in the U.S. The United States Chamber of Commerce is a very influential voice in America and our strong relationships with it will bode well in the weeks and months ahead.
For Canadian businesses, diplomats, and politicians our job is clear. We have to make a muscular case for trade to prove that NAFTA is in America’s interest. Since it came into effect, U.S. exports of goods to Canada are up 179 per cent and services are up a staggering 237 per cent. In 2015, Canada bought $48 billion of vehicles and $43 billion of machinery from the U.S., much of it manufactured in states like Michigan and Ohio, the industrial heartland that voted for Trump.
Killing NAFTA would harm both countries and put a lot of workers on both sides out of work. Surely Trump, a globally recognized man of the deal, knows unemployed workers don’t buy cars.
And just when we thought it was safe to go swimming in Asia, Canada will have to rethink its trade strategy there. Most experts are betting the Trans-Pacific-Partnership is dead. Down the road even Trump visualizes some form of Asian trade deal, but clearly it’s not going to look like the TPP.
In spite of this, Canada may have a chance to work out an early bilateral deal with Japan. Stay tuned on that one.
The big question is whether there will be trade wars and global recession, as some doomsday prognosticators are opining. Time will tell but it will depend to a great degree on a series of assumptions like: Will Trump proceed with anti-trade actions? Can he get Congress to agree on re-opening NAFTA? How far he is prepared to go in crushing the relationships of his two neighbouring countries?
My guess is that we are a long way off from having to get too concerned about either. Nevertheless, if ever there was a time for Canada to get busy on locking down other trade agreements around the world, this is it.
Canada’s business community is not naïve about the possibilities or consequences a Trump presidency may have on our economy, but if there is an early silver lining, the Republican Senate and House are almost certain to pass some tax cuts and will agree to Trump’s plan to spend on infrastructure. This will likely result in having some stimulative effect and boost the American economy. Typically, although there is never a guarantee, when the American economy is doing well so does Canada’s.
It’s too early to tell, but overall, we should hold onto an optimistic view about the resilience of the U.S. economy and thus our own.
In the meantime, let’s stay calm and trade on.
The only reason Canadians have to panic over Trump is all the leftist scum that said they would move there if he was elected. They were lying, as they always do, so the Canucks can relax.
Much easier to accuse Trump of being a racist than to defend NAFTA as good for America, because it’s not.
“Furthermore, president-elect Trump has clearly stated he wants to create more jobs for Americans, so it’s almost a certainty his advisers will be quick to remind him that more than nine million American workers are employed directly as a result of NAFTA.”
wow, a whole nine million huh?
This author is residing in Canadian fairyland.
Canada is not a problem when it comes to NAFTA.... Mexico is...
Because Canada is very close to the USA in sever key economic and social aspects.... Mexico is not, hence imbalance...
That ‘sucking sound’ you heard, was the jobs that went ‘South of the border, down Mexico way’. Very few came North. In fact, a number of Canadian jobs went the same place!
Just point to the US trade surplus with Canada and Mexico. Oops.
“It’s too early to tell, but overall, we should hold onto an optimistic view about the resilience of the U.S. economy and thus our own.”
Yeah, that’s always the way they think. “America will continue to be a chump so we can do well at their expense., I mean isn’t that’s what America is there for?”
Ending NAFTA is realy bad for Texas though if it matters.
https://www.texastribune.org/2016/08/09/nafta-poses-challenge-texas-republicans/
Also while I dislike illegal immigration, stopping it is bad for TX also no cheap labor especially in construction.
I think this is why W never did anything about either.
Shut up, Canada. You’ve been hiding behind the skirt of the USA for decades.
NAFTA is a complex set of anti-capitalist rent seeking favors. Its name is the only place where is “free trade”.
One of the special interests was the string of Dem Senators from WA-MT-ND-MN-WI-MI Canadian border. They made the US-CAN oil relations extremely inefficient. The intent was to stop all fossil fuel on both sides of the border.
That wacko position should be wiped out. Of course, Canada’s Justin is now the wacko to block it. But Alberta-Saskatchewan probably would like a re-negotiation.
NAFTA was proceeded by the CUSFTA (Canada-US Free Trade Agreement). That agreement (negotiated and signed by Ronald Regan, BTW) contained a provision (Chapter 9) that was very much in the interests of the USA — whereby the US was guaranteed access to Canada’s energy stocks, at the same price Canadians would pay for it. Those energy provisions were carried forward into NAFTA (Chapter 7).
That was a very, very contentious provision, here in Canada. The leftists here portrayed it as a massive sellout of vital Canadian resources. Indeed, it was the price tag that Reagan put on signing the agreement.
It could have made the USA completely independent of oil from the mid-east, or communist Venezuela. Could have — except that the Democrats (especially Obama) did everything they could to keep the “dirty tar sands oil” from entering the US. The Keystone XL pipeline debacle being the most obvious example of that.
The USA could have had access to all the energy its economy needed — without having to fight wars in the Mid-East to secure it — but you (or your leftists) turned down that deal of the century. It’s probably harder to point to clear benefits of NAFTA now — but, you only have yourselves (or at least your sinister, i.e. leftist, half) to blame for that.
Well, problem was Windsor Ontario grew leaps & bounds because of NAFTA. Lots of auto jobs were created in Windsor solely from this trade arrangement, jobs that should of been in Detroit.
Also while I dislike illegal immigration, stopping it is bad for TX also no cheap labor especially in construction.
The tribune is a Liberal rag.
Also, Texans DO NOT NEED illegal immigrants. Oilfield and construction jobs pay very well.
Even the 20+ Mexicans that work at the same company I do as Welders and Painters and service Techs for an oilfield service company.....voted for Trump and are against illegal entry. Illegals suppress the excellent wages that citizens receive.
Tear it up and then replace it with something American.
The rest of the world hasn’t seemed to accept our decision to crush globalism!
Spot On. IMO, trade treaties with nations of similar wage scales were never a problem. Most of these current trade treaties were only excuses for Corporate America to flee to low wage countries and still be able to sell to the U.S. consumers.
I believe Donald said he would renegotiate the Treaty to make it fair to The US. Today it is very favorable to Mexico and very unfavorable for the US. We are suckers and have been poor negotiators in the past - long and short term.
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