NAFTA negotiations continue this morning after the latest artificial deadline on Friday came and went. This would be mundane news except for the trolling of Canada by Donald Trump.
The U.S.-Mexico deal was set to be a springboard for a deal with Canada. There are some encouraging signs (more higher-wage auto production in Mexico) and discouraging signs (Mexico's willingness to eliminate Chapter 19 for anti-dumping disputes).
We saw the media coverage and the Conservatives toe the line of Canada needing to capitulate and quickly to meet the Donald Trump demands. Turns out waiting for a better deal was way better than no deal for the moment.
Canadian Prime Minister Justin Trudeau spoke of a new NAFTA as being a "win-win-win" for all 3 countries.
"We're not hearing about gains Canada might make in these trade negotiations, only what we might give up," said Conservative finance critic Pierre Poilievre on CBC Radio's The Current.
The Trudeau Government would justifiably argue that negotiating in public wouldn't be a proper strategy. The quick deal would take away Canada's right to fight back against the traditional bullying from the United States on trade disputes.
A consensus on softwood lumber that Canada likes would be a good-sized victory. The removal of the tariffs against Bombardier (vs. Boeing) would be helpful but not a victory since they never should have happened in the first place. A progressive deal to protect cultural industries, a key concern for Trudeau, would be a good sign.
Trump is obsessed with supply management for dairy (but not for eggs) forgetting, as the Biblical parable points out, the large plank (U.S. subsidies for its dairy industry) in its own eye instead of the sliver (supply management) in Canada's eye.
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Canada should absolutely make is increasing the de minimis on the value of goods shipped into Canada. Mexico raised its de minimis from $50 to $100 while Canada's rate rests at $20. The Canada rate is the lowest among industrialised countries; the U.S. mark is $800. Canada should get something to make that happen: like the recent Josh Donaldson trade by the Toronto Blue Jays, the more money Canada gives up, the better the prospect coming back. In this case, the exchange could be a better concession on softwood lumber.
We've already seen the 5-0 decision by the U.S. International Trade Commission against the tariff on Canadian newsprint that was actually hurting U.S. newspapers. These discussions need more of that common sense rhetoric.
Canada can gain some advantage in pushing the negotiations further since the new Mexican government will be more friendly come December and the U.S. midterms come in November. The empty threat of tariffs on cars coming from Canada isn't enough to cause Canada to capitulate to a bad deal.
NAFTA is too important to be led by a childish toddler. The adults in the room need to take better charge of the negotiations. Canada and Mexico can't be swayed by the harsh and extreme negotiating points by the United States. Stopping them might be seen as "victories" but they should be dismissed for what they are. Canada's success in NAFTA 2.0 has to be measured by true benefits for trade improvement.
photo credit: here
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