If you thought that Donald Trump’s destruction would be limited to the good ol’ U.S.A. then you would be sadly mistaken. That man’s influence is global and his current target–or one of them, anyway–is NAFTA. He already announced in May that he would be renegotiating the North America Free Trade Agreement; that’s the document that the U.S., Canada and Mexico have together to make trade between our countries easier. And it’s worked pretty well up until now. Then Trump happened.
Donald Trump ran his whole campaign using an ‘America First’ rhetoric that had everyone who wasn’t born in the U.S.A. cringing. That works for pumping up American voters, but not so much for encouraging good global relations (as demonstrated at this year’s G20). Trump just doesn’t seem to care though and has made it very clear that he feels NAFTA isn’t fair to the United States–which is just, uh, not true–and wants to take a few things away from Canada and Mexico to ‘even the playing field.’ Oh, cool.
So unfortunately, when a third of NAFTA says they want to renegotiate, that’s what you have to do (especially when that third is the biggest partner and them pulling out would be detrimental to your economy). So here we are, Trump gave us his NAFTA wish list yesterday and it seems a little, well, slanted. Which was entirely the point.
Actual Donald Trump quote: ‘I don’t want to say any more than a ‘level playing field’ but if the playing field were slanted like a little bit toward us, I’d accept that also.’ Again, not a great PR move for building global relations.
While Trump’s statements yesterday were highly divisive, the language in the document itself was encouraging to trade experts because it used orthodox trade lingo to make their demands. Laura Dawson of the Canada Institute said her main concern before reading the proposal was that it would be written in ‘non-trade language’ which would make it more difficult for Canadian negotiators to navigate and counter. Instead, they are faced with some outrageous demands, but in terms they have experience with.
The list of negotiation objectives is 18 pages long so we’ll just cover the big ones here (i.e. the ones that will have the most impact on the Canadian economy if they go through).
Say bye-bye to Canadian dairy, poultry, wine and grain protections
Many governments protect certain industries so that the country buys domestically rather than importing. These four industries are some of the ones protected in Canada which means that Canadians are supplied exclusively by Canadian products. Some countries, like the U.S., subsidize what they produce in their own country with foreign imports. That means shelling out possibly millions of dollars to other countries.
Donald Trump doesn’t like that Canada has closed these industries to imports. We’ll export these products, but we have enough within Canada to sustain our needs, so we don’t really import them. In the renegotiation, he wants Canada to open up these industries to American market competition, meaning that if Canadian companies so choose, they would be able to import cheaper materials from the States rather than buy what’s produced in Canada.
This means that rather than keeping Canadian money in the country and stimulating our own economy, that money would be going out and stimulating the American economy instead. Not great for us.
Come on in and take our money
Other industries that restrict foreign companies in Canada are telecommunications and financial business. Trump wants Canada to allow for more American telecommunications companies and banks to operate within Canada. Again, this would take money from Canadians and funnel it into the States which is good for them but not-so-good for us.
Dispute? Too bad.
This one might actually be Canada’s deal-breaker. Trump wants to eliminate NAFTA’s Chapter 19 which mandates that trade disputes be be settled by an independent panel. This is particularly important to Canada right now because of a little spat we’re in with the U.S. over soft-wood lumber. This article is something that it’s unlikely Canada will budge on and could make these talks difficult if we are put in a position to refuse these demands outright.
Experts are saying that the United States will set the tone when negotiations start in mid-August. If they are willing to concede a few things, Canada will be willing to too. If they decide they’re playing hardball–which isn’t a stretch for DT–these negotiations are going to be difficult and possibly stretch on for years.