The refrain for Canada in the 2017 North American Free Trade Agreement (NAFTA) negotiations should be: bring on a new trade deal that opens markets, increases competition and sharpens innovative edges to compete internationally. It should not be hand-wringing and bowing in the face of the new American trade bluster and bullying as practised by the Donald Trump White House.
Restarting NAFTA negotiations should be embraced as windows of opportunity rather than closed trade avenues. There are many complexities behind the simplistic bombast of the Trump administration’s opening volleys targeting access to Canada’s agriculture market and its digital information landscape. U.S. victories in the former could be bad for farmers but good for consumers; victories in the latter could be bad for Canadian culture and domestic entertainment cultivation. But the U.S. push to reduce inter-country red tape, especially at the Canada-U.S. borders, should be embraced by both sides of the 8,900-kilometre borderline.
As RBC noted in a recent NAFTA report, the cost to ship goods across that border relative to domestic shipping rose to 25.1% in the 2000s compared with 16.3% in the years prior. The new round of intercontinental free trade negotiations should also reconfirm to Canadian business the reality in the Trump era that it is all America all the time, regardless of that mantra’s collateral damage on trading partners new and old.
Canada has many other market opportunities that are increasingly important. It needs to continue to cultivate them aggressively.
If there’s no new NAFTA, intercontinental trade would likely default to the Canada-U.S. Free Trade Agreement implemented in 1989; failing that, it would fall under World Trade Organization regulations. Neither is better than a North American FTA, but either is better than a deal that relegates Canada to America’s trade-dependent discount energy and resource warehouse. •
