Canada-US Trade Relations

[Rifleman62]

Ashkan08, without boring everyone else here, please Google the results of all Trudeau's trade negotiations with other countries. Start with China and the TPP.

 

[Ashkan08]

Ashkan08, without boring everyone else here, please Google the results of all Trudeau's trade negotiations with other countries. Start with China and the TPP.

I meant for Canada to participate in more trade negotiations and agreements after this NAFTA dispute. The TPP was signed by Canada before Trump's election and thus before the NAFTA deal was revisited. The deal with China however is a whole different story. The Canada-China trade talks were stalled before the tariffs the U.S put on China came into effect. Now China seems more serious about having trade talks with Canada.
https://business.financialpost.com/news/economy/china-says-always-ready-to-restart-free-trade-talks-with-canada

 

[Rifleman62]

NAFTA is dead. A US/CA trade deal is somewhat possible, but NAFTA is dead.

 

[Colin Parkinson]

Even when/if we do come to a good deal with the U.S and Mexico, we should still learn not to rely too much on a single country as much as possible.

Canada's lumbers industry has gone from a 80% reliance on the US market in the 90's to 50% currently. If we can get a NG pipe to the coast, we can significantly cut the amount of NG flowing to the US as well. The biggest current danger for Canada is the auto sector, which Canada may take a significant hit on.

 

[Cloud Cover]

Seems to me that the bargaining power of Canada is much reduced with China without NAFTA to back up the economy. 10 years ago would have been a good time to make basic, no frills (ie none of the social engineering) trading arrangements.  As a country, our successive complacent governments have failed to take the necessary steps to insure the economy against this foreseeable peril.  At this point, if there is no deal with Canada in the next month or so, might the agreement with Mexico sail through Congress before the mid terms, removing risk the Democrats might scuttle it? Good time to be a lobbyist in DC, I suppose.

 

[daftandbarmy]

Canada's lumbers industry has gone from a 80% reliance on the US market in the 90's to 50% currently. If we can get a NG pipe to the coast, we can significantly cut the amount of NG flowing to the US as well. The biggest current danger for Canada is the auto sector, which Canada may take a significant hit on.

Luckily, the difficulties we've had over the Softwood Lumber Agreement with the US over the past years, has forced us to look elsewhere for markets.... successfully.

It's time we put on our 'big boy pants' and moved out of Mom's basement with respect to the rest of our economy too.

 

[Cloud Cover]

Just a clarification, the FTA does not "revert" in the event that NAFTA terminates unless the US Congress votes on that.  Nothing in either NAFTA or the FTA provides for reversion (article 2106 of the 1988 FTA provides for termination, not suspension but this is exactly what the US did anyway. Canada did nothing similar.)    There is some discussion of this in this link: https://business.financialpost.com/news/economy/if-nafta-dies-old-canada-u-s-fta-would-live-on-right-not-so-fast-canada

"The American suspension is laid out in Section 107 of the law implementing NAFTA in that country in 1994. The earlier deal negotiated by Brian Mulroney and Ronald Reagan was to be suspended, and, according to the law, it would remain suspended until such time as that suspension might be “terminated.”

It doesn’t define how you “terminate” a suspension. But a trade consultant who two decades ago advised Canada’s parliamentary committee on NAFTA implementation said it obviously requires someone to do something.

“It’s been suspended. Somebody has to un-suspend it,” Peter Clark said.

Also, in it's brilliance, our own Parliament repealed large sections of the FTA Implementation.

What is interesting in the current NAFTA agreement is this provision:

Article 2205: Withdrawal

A Party may withdraw from this Agreement six months after it provides written notice of withdrawal to the other Parties. If a Party withdraws, the Agreement shall remain in force for the remaining Parties.

Unless Canada and Mexico have already provided written notice to each other, both countries would remain parties to this particular NAFTA agreement. It could be (and is likely) that if there really is a bilateral agreement forthcoming between Mexico and the USA, Mexico may be required to provide written notice to Canada that it is also withdrawing from the 1994 NAFTA (agreement). 

 

[Jarnhamar]

LILLEY: Trudeau Liberals botched NAFTA negotiations

Justin Trudeau could have been a contender.

Now he has Canada sitting on the outside as the United States and Mexico finalize an agreement in principle on what used to be called NAFTA.

https://torontosun.com/opinion/columnists/lilley-trudeau-liberals-botched-nafta-negotiations?utm_campaign=Echobox&utm_medium=Social&utm_source=Twitter#Echobox=1535456269




Possible that Trudeau is going to campaign on opposing all things Trump related to get election points?

 

[Fishbone Jones]

One has to start wondering if he truly botched it or did he do it on purpose?

 

[daftandbarmy]

Just a clarification, the FTA does not "revert" in the event that NAFTA terminates unless the US Congress votes on that.  Nothing in either NAFTA or the FTA provides for reversion (article 2106 of the 1988 FTA provides for termination, not suspension but this is exactly what the US did anyway. Canada did nothing similar.)    There is some discussion of this in this link: https://business.financialpost.com/news/economy/if-nafta-dies-old-canada-u-s-fta-would-live-on-right-not-so-fast-canada

"The American suspension is laid out in Section 107 of the law implementing NAFTA in that country in 1994. The earlier deal negotiated by Brian Mulroney and Ronald Reagan was to be suspended, and, according to the law, it would remain suspended until such time as that suspension might be “terminated.”

It doesn’t define how you “terminate” a suspension. But a trade consultant who two decades ago advised Canada’s parliamentary committee on NAFTA implementation said it obviously requires someone to do something.

“It’s been suspended. Somebody has to un-suspend it,” Peter Clark said.

Also, in it's brilliance, our own Parliament repealed large sections of the FTA Implementation.

What is interesting in the current NAFTA agreement is this provision:

Article 2205: Withdrawal

A Party may withdraw from this Agreement six months after it provides written notice of withdrawal to the other Parties. If a Party withdraws, the Agreement shall remain in force for the remaining Parties.

Unless Canada and Mexico have already provided written notice to each other, both countries would remain parties to this particular NAFTA agreement. It could be (and is likely) that if there really is a bilateral agreement forthcoming between Mexico and the USA, Mexico may be required to provide written notice to Canada that it is also withdrawing from the 1994 NAFTA (agreement).

But if one of the parties is the largest economy in the world, by a wide margin, it can do whatever it wants without fear of repercussions.

 

[Remius]

https://torontosun.com/opinion/columnists/lilley-trudeau-liberals-botched-nafta-negotiations?utm_campaign=Echobox&utm_medium=Social&utm_source=Twitter#Echobox=1535456269




Possible that Trudeau is going to campaign on opposing all things Trump related to get election points?

Yes quite likely.

I'll leave this here  https://www.cbsnews.com/news/us-mexico-trade-agreement-is-hardly-a-done-deal/

I note that Mr. Lilley states that there is a sunset clause.  Sort of true/untrue.

lots of hurdles still for Mr. Trump to claim victory.

 

[daftandbarmy]

A good summary of the issues, IMHO:


Trudeau Has NAFTA Wiggle Room but Will Resist on One Big Issue

By Bloomberg

August 28, 2018 Updated: August 28, 2018 
  

The rush is on for Canada to get a NAFTA deal, though a key stumbling block remains.

As analysts began parsing summaries of a partial U.S.-Mexico deal announced Aug. 27, most details didn’t jump out as deal-breakers for the other partner in the 24-year-old continental trade pact. The problems instead lie in a series of NAFTA fights always seen as squarely between Canada and the U.S., chief among them the pact’s dispute resolution systems.

“It seems like a set of things that are very easy for Canada to come in on,” Brett House, deputy chief economist at Bank of Nova Scotia, said in an interview about what the U.S. and Mexico agreed to. “We’re really just back to where we always were.”

Markets appear unconcerned, with Canadian auto-parts makers Linamar Corp. and Magna International Inc. extending gains on Aug. 28—signaling a bet Canada will make the cut on a final deal and that the Mexico problems were the biggest ones that needed fixing. “I am not concerned right now for Canada’s position,” Bruce Heyman, a U.S. ambassador to Canada under Barack Obama, told BNN Bloomberg television.

But the clock is ticking on the North American Free Trade Agreement. Canadian Foreign Minister Chrystia Freeland arrived in Washington for talks Aug. 28, and U.S. Trade Representative Robert Lighthizer wants to notify Congress of a deal by Aug. 31. It would be a lot easier to do so with Canada since U.S. lawmakers might fight the Trump administration if it tries to push ahead with only Mexico.

https://www.theepochtimes.com/trudeau-has-nafta-wiggle-room-but-will-resist-on-one-big-issue_2635261.html

 

[PPCLI Guy]

And an interesting Opinion piece from the Wapo:

It’s not a deal, it’s not that big, and it’s not replacing NAFTA

By Jennifer Rubin
Opinion writer
August 28 at 10:30 AM
Give yourself a pat on the back if you thought President Trump’s staged telephone call on Monday with Mexican President Enrique Peña Nieto, and Trump’s vague announcement of a new agreement — the biggest ever! — was typical Trump hype, a desperate plea to yank attention back to himself. It didn’t work, especially after he reversed course and grudgingly lowered the White House flag to half-staff to honor Sen. John McCain, who died Saturday.

For starters the White House botched the TV gimmick. The Post reports:

President Trump invited reporters into the Oval Office on Monday to punctuate the moment in an unusual way: allowing them to sit in on a celebratory phone chat with Mexican President Enrique Peña Nieto.

But when he punched a button on a phone on the Resolute Desk, the line was dead.

“Enrique?” Trump said, with television cameras rolling. There was no response. “You can hook him up,” he called out to aides. “You tell me when. This is a big deal. A lot of people are waiting.”

The audience, including top White House advisers and Mexican diplomats, would have to wait a touch longer — “Hellooo,” the president tried again. “Do you want to put that on this phone please? Hellooo?” — before an aide finally took the receiver and patched Peña Nieto through.

Ah well, live by the reality TV mentality, die by shoddy production. The Post report continued: “The awkward, real-time sequence in the Oval Office offered another example of Trump’s willingness to discard protocol and conduct his presidency like a reality show playing out in real time, conscripting those around him in service of the spectacle.”

On a more substantive note, just about everything Trump said about the negotiations with Mexico was false, as the New York Times pointed out:

Mr. Trump announced on Monday that the United States and Mexico had reached a preliminary agreement to revise key portions of the North American Free Trade Agreement. That is not the same thing as signing a new bilateral deal.

Nor would a United States-Mexico trade agreement potentially rank as the “largest trade deal ever made.”

It is premature to consider the bilateral agreement a done deal. Canada, the third country that was a party to [NAFTA] in 1993, has not yet agreed to the changes. Participating in Monday’s announcement via conference call, Mr. Peña Nieto, the outgoing Mexican president, said he hoped Canada would rejoin the negotiations.

Congress would also need to approve the changes before the trade deal could go into effect.

Other than that, he was spot on, huh?

It’s impossible to know whether Trump’s deal will be “better” than NAFTA because there really is no deal, no Canada and no ratification. But if you’re hyping a preliminary step with one of two involved parties, you’re also signaling that you are desperate for a deal. So don’t count on Trump to make NAFTA 2.0 any better.

Moreover, let’s remember that NAFTA is not the calamity that the president and his low-information base think it is. In fact, it’s worked pretty well. Here’s a handy recap:

By easing trade between 450 million people in three countries, NAFTA more than quadrupled trade in 20 years. This boosted economic growth in all three countries. It also led to lower prices on groceries and oil in the United States.

Grocery prices went down because NAFTA lowers the cost of produce imported from Mexico and Canada. While this means less demand for American agricultural products, there is high demand for lower food prices because food is more expensive every year.

Oil prices went down because the United States could now import much of its oil from Mexico and Canada. The elimination of tariffs plus the lack of political tension makes this cheaper than importing from the Middle East.

As an added benefit (again Trump refuses to believe this) the tide of illegal immigration from Mexico has reversed. We are now seeing fewer Mexican-born people entering the country than we see returning to Mexico. Rather than build a wall, we built a free-trade zone that deterred illegal immigration.

The notion that NAFTA destroyed “millions” of jobs has been roundly debunked. As MarketWatch explains:

The reason trade deficits don’t reduce overall employment is that, in fact, trade deficits are not really deficits at all. Every cent that does not return to the U.S. as demand for American exports returns instead as investment in America. In economists’ lingo: the trade deficit (or, to be precise, the current-account deficit) is matched by a capital-account surplus of equal size.

The fact that we are at virtually full-employment while NAFTA remains in effect should, if one is logical, disprove Trump’s irrational fear of trade deficits. To the contrary, we see as Trump tries to install tariffs (taxes), jobs are put at risk.

In short, Trump has no deal to replace NAFTA. It’s not the biggest deal ever since it’s not even a deal. And if he simply renumbered the pages on the existing NAFTA deal he’d be able to claim he’s creating jobs, lowering prices for consumers and keeping out illegal immigrants. Of course, that’s what NAFTA has been doing for more than 20 years.

 

[Journeyman]

lots of hurdles still for Mr. Trump to claim victory.

When has actual success been required for a Trump claim of 'victory'? 

As merely one of many examples: 

@realDonaldTrump
….everybody can now feel much safer than the day I took office. There is no longer a Nuclear Threat from North Korea.

This self-congratulatory, and equally premature trade pronouncement is no different.


OK, the difference lay in the responses here;  the nuclear issue evoked bleating about a Nobel Peace Prize, whereas with trade, somehow Trudeau has magically transformed from one of the most inept politicians ever into some cunning puppet-master who orchestrated all of this for electoral gain.
      :stars:

 

[Rifleman62]

https://www.spencerfernando.com/2018/08/29/poll-canadas-confidence-in-trudeau-governments-handling-of-nafta-negotiations-collapses/

POLL: Canada’s Confidence In Trudeau Government’s Handling Of NAFTA Negotiations COLLAPSES - 29 Aug 18

Angus Reid survey shows just 17% of Canadians are “very confident” with the Trudeau government’s ability to represent Canada in trade negotiations.

As the U.S. and Mexico reach a deal on NAFTA without Canada, and after weeks of us being on the outside looking in, a new Angus Reid poll shows that Canadians’ confidence in the Trudeau government’s handling of the trade negotiations has collapsed. In June of 2018, 27% of Canadians said they were “very confident” in the government to handle the negotiations. 43% said they were “moderately confident.” 22% were “not that confident,” and 8% were “not at all confident.”

But in the last month, those numbers have changed dramatically. Now, just 17% say they are “very confident,” 34% say they are “moderately confident.” 26% are “not that confident,” and the number of people “not at all confident” has surged to 22%. Considering that “moderately confident” is a pretty weak statement, when you add that to those who aren’t confident or are not at all confident, a full 82% lack full confidence in the Trudeau government.

And these numbers are no surprise. For a long time, the Trudeau government and the media were selling the same message: Everything’s going great, Canada has tons of leverage, and we’re going to get a great deal. But now, that fiction can’t be maintained. Even much of the establishment media has been reporting on what is obvious to us all: Trudeau and Freeland got totally outplayed by Mexico, their virtue-signalling and lecturing backfired horribly, our leverage is gone, and our economy faces serious risk. Canadians can see that Trudeau and Freeland don’t have what it takes to represent our country, and the collapse in confidence was an inevitable result of that observation.


Related:1. It turns out that Donald Trump wanted to speak with Justin Trudeau BEFORE he made his announcement on the trade deal between the U.S. and Mexico. But Trudeau didn’t take the call.
            2. Freeland was late for the meeting yesterday.

 

[PPCLI Guy]

For those looking for a slightly less hysterical view of the negotiations and Canada's relative position, I offer this analysis:

https://www.washingtonpost.com/business/2018/08/30/friday-isnt-real-deadline-nafta/?utm_term=.685ad79dc16d

Friday isn’t the real deadline for ‘NAFTA 2.0’
Trump’s push to get a deal with Canada by Friday is a negotiating tactic and attempt to move something before the new Mexican president takes office.

August 30 at 10:18 AM
President Trump is telling Canadian officials they have until Friday to sign on to his major new North American trade deal, threatening to leave them behind, rip up the continent’s existing trade pact and even, possibly, hit Canada with draconian auto tariffs.

But according to Congress, foreign officials and even members of Trump’s own administration, Friday isn’t the drop-dead deadline for Canada that the president is suggesting.

On Friday, Trump plans to send a letter to Congress notifying it of an impending trade deal, which he’s terming a replacement for the North American Free Trade Agreement (new name to be determined). He wants to send a letter because it starts the clock on the 90-day notice that U.S. trade law requires Trump to give Congress before he can sign any agreement.

Getting that window started by Friday matters to Trump, because he wants to get a deal done by Dec. 1. That’s when Mexican President Enrique Peña Nieto will step down to make way for President-elect Andrés Manuel López Obrador. López Obrador has had representatives at the U.S.-Mexico trade talks, but Trump doesn’t want to risk the new Mexican administration balking at a deal his team brokered with the old one.

Trump already has what he needs from Mexico to give notice to Congress: The two countries Monday announced a “preliminary agreement in principle.” That is, essentially, a deal to make a final deal later. It’s not the full NAFTA renegotiation he promised, but it’s probably enough to satisfy Republican leaders in Congress and get the 90-day clock started.

Trump has until the end of September (technically, 30 days) to send Congress the full, detailed deal.

But many members of Congress are telling Trump they won’t back a new NAFTA deal unless all three North American countries are part of it. That puts pressure on the president to get Canada involved, and it’s why the administration is likely to cut Canada some slack if it’s not ready to sign by Friday.

Trade experts say the likely scenario is that Canada and the United States announce something comparable to the preliminary deal with Mexico — or at least to issue a statement of progress by the end of the week. From there, the two sides would have another month to finalize the details.

Although the Trump administration would love to have all three countries signed onto the Friday letter, U.S. Trade Representative Robert E. Lighthizer has already set up a contingency plan. The administration could send the letter with just a U.S.-Mexico deal and then add Canada in September — all without restarting the clock on the 90-day notice requirement.

Many trade lawyers say it’s not entirely legitimate for the administration to send Congress the letter Friday and try to tack Canada on later, saying it violates the terms of “fast-track” authority the president has for renegotiating NAFTA.

But veterans of trade negotiations say it is up to Congress to allow it or not. Lawmakers have pushed for Canada to be included, and lawmakers would prefer to see Trump strike a new trade deal rather than attempt to walk away from the old one without anything to replace it. So there’s reason to believe Republican leaders would let the administration get away with tacking Canada on after Friday.

“It really comes down to Congress,” said Jennifer Hillman, a former U.S. trade negotiator in the Clinton administration. “Trump is setting this up to blame Canada for failing to agree."

That sets up a more firm, more important deadline for Canada as Sept. 29, the date by which Trump owes Congress a finalized deal if he wants to get it done before Dec. 1.

“Canada needs an agreement with the United States, but it doesn’t need it by Friday,” said Doug Holtz-Eakin, an economic adviser to many Republicans and former head of the Congressional Budget Office.

With that in mind, Friday’s deadline is, for Canadian officials, more a bonus than a necessity. It might buy them some goodwill with the administration as they try to hammer out a final deal.

That goodwill could come in handy, as the United States and Canada remain at odds over major trade policies, especially over dairy products, Trump’s new metal tariffs and his threatened one on auto parts and the mediation process for resolving trade policy disputes.

Resolving those differences before the end of September, and getting Mexico to sign onto whatever the United States and Canada agree to, is no easy task. But if Trump’s team can get it done, it will go a long way toward the president’s goal of turning NAFTA into a deal of his own.

If Trump can get the deal signed, then the action moves to Congress. Although legislation typically requires Congress to pass a bill and then the president to sign it, trade agreements typically go in the opposite direction, where Congress votes on the deal after the president inks it alongside leaders of other countries.

Congress needs only a simple majority to approve it, but there is a lengthy review process that has to take place before the vote can happen, meaning lawmakers probably won’t vote on “NAFTA 2.0” until the summer of 2019 or beyond. It’s yet another reason the midterm elections could be critical for Trump, because Democrats could easily stall this process.

“The likelihood is that this will be dealt with by the new Congress, the next Congress after the midterm elections,” Commerce Secretary Wilbur Ross said Tuesday on Bloomberg.

So it appears that this side deal with Mexico is about American insider baseball more than it is about the larger trade discussion.  As aggravating as it may be for some, it is safe to assume that our own government is aware of all of this, and indeed has been all along.

 

[Infanteer]

López Obrador has had representatives at the U.S.-Mexico trade talks, but Trump doesn’t want to risk the new Mexican administration balking at a deal his team brokered with the old one.

Tough when the deal-breaking shoe is on the other foot....

 

[Remius]

For those looking for a slightly less hysterical view of the negotiations and Canada's relative position, I offer this analysis:

https://www.washingtonpost.com/business/2018/08/30/friday-isnt-real-deadline-nafta/?utm_term=.685ad79dc16d
So it appears that this side deal with Mexico is about American insider baseball more than it is about the larger trade discussion.  As aggravating as it may be for some, it is safe to assume that our own government is aware of all of this, and indeed has been all along.

Of course they’ve been aware of all of this.  But there are some people so enamoured with Trump diplomacy that they are salivating at the fantasy of having Trudeau fail and hope we get a bad deal that they refuse to even consider the points in the article you posted. 

 

[Bruce Monkhouse]

Hopefully we get no deal.....I think we can do quite well without NAFTA if we put our big boy/girl pants on.

 

[Good2Golf]

It would be a shame for Wisconsinites if Trump's 25% tariffs on Canadian autos bought the Dairy State a jack in tariffs from 300% to 1000%...ouch!  Holy focused retaliatory tariffs, Batman! 

#Neversaynever

Regards
G2G