For the first time since the North American Free Trade Agreement (NAFTA) came into effect in 1994, establishing one of the largest free trade marketplaces in the world, Canada, the United States and Mexico are on the verge of stepping backwards into the pre-NAFTA days, as the negotiations are teetering on the brink of failure.
The situation isn’t helped at all with a protectionist U.S. president in Donald Trump, who is posing a very real threat to many sectors of Canada’s economy, from agriculture to forestry and steel.
First he imposed highly-punitive tariffs on softwood lumber going into the States, now he’s threatening a 25-per-cent tariff on Canadian steel and 10 per cent on aluminum products, even though Canada is the biggest customer of U.S.-made steel.
The unfairness of the tariffs, and his harsh, protectionist tone as he bleats about how bad Canada has been treating the poor, bedraggled United States is quickly leading to a situation where there will be little to no trade going on, and if there is, there will be exhorbitantly high prices for everything coming here from south of the border. And, in turn, the tariffs on our products will make them unaffordable to Americans.
In a situation like this, no one wins, and in the resulting trade wars that are looming on horizon like the gathering thunderclouds of a summer storm, all sectors of the economy in Canada will be hurt, primarily because the U.S. is Canada’s biggest trading partner, and vice-versa.
It is unbelievable that President Trump does not see how his own people will be hurt in all this, just like here, with farmers, manufacturers, and everyone producing items for export all about to face the prospect of seeing a major market become very hard to enter or send products to.
The negotiators are already discussing openly the possibility of doing bilateral trade agreements, country to country, rather than the tri-country agreement that has been working well up to this point.
In the meantime, it would be well for Canadian trade officials to look at expanding Canada’s marketplace elsewhere, such as to Europe, and perhaps the biggest market of all, the Pacific rim encompassing Southeast Asia with its many densely-populated countries that could be buying much more of our products. Perhaps NAFTA needed updating, but the way to address that situation is not by imposing punitive, hurtful tariffs on your largest trading partner and ripping up a long-standing agreement. There needs to give-and-take on both sides. — Greg Nikkel
