NAFTA

Thursday August 24, 2017

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday August 24, 2017

Canada won’t join U.S. missile defence, send troops to Afghanistan, Trudeau says

Prime Minister Justin Trudeau has thrown cold water on suggestions the Liberal government wants to sign onto continental ballistic missile defence, or that it might send troops back into Afghanistan.

The question over whether Canada should be part of the U.S.’s continental missile-defence shield has been rekindled in recent days amid concerns about North Korea’s growing nuclear arsenal.

Canada opted out of ballistic missile defence in 2005 following a divisive national debate, but many defence experts and parliamentarians, including some Liberals, want the issue reopened.

Meanwhile, U.S. President Donald Trump’s plan to send thousands more troops to Afghanistan has also resurrected questions about whether Canada will be asked to follow suit.

Speaking in Montreal on Wednesday, however, Trudeau appeared to close the door on both ideas.

“On those cases, we will always take the decisions in terms of what is the best interests of Canadians,” Trudeau told reporters after a meeting with federal and provincial immigration officials.

“And our long-standing positions on those two issues are not going to be changed any time soon.”

The comments on ballistic missile defence were the strongest yet from the Liberal government, which had largely sidestepped questions about its intentions in recent weeks. (Source: Toronto Star) 

 

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Thursday, August 17, 2017

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday, August 17, 2017

Chapter 19 may be a NAFTA deal breaker for Canada

A lot of Canadian softwood lumber exporters will tell you Chapter 19 is an instrumental part of the North American Free Trade Agreement.

July 17, 2017

Softwood lumber is the longest and bitterest of Canada-U.S. trade disputes. Small wonder then that Prime Minister Justin Trudeau has cautioned that removing Chapter 19 from the trade pact would be a deal breaker in the upcoming renewal talks between Canada, the United States and Mexico.

Chapter 19 is a mechanism NAFTA members can use to review the fairness of anti-dumping and countervailing duties. The U.S. has a long history of slapping such duties on Canadian softwood lumber shipments, and Canada has taken advantage of Chapter 19 to reverse those actions.

A Chapter 19 panel decides each case according to the domestic laws of the country that imposed the duties. So a Chapter 19 panel does not override a country’s domestic laws, but serves as a check on how each country is applying its own rules.

June 7, 2017

“There is absolutely no doubt that it acts as a check on some of the more abusive, arbitrary and discriminatory actions of the regulators on both sides of the border,” said Milos Barutciski, co-head of the international trade and investment law practice at Bennett Jones LLP in Toronto.

Softwood lumber has long been a flash-point in Canada-U.S. trade relations, and Canada has turned to Chapter 19, both under the original Canada-U.S. Free Trade Agreement and subsequently under NAFTA, to address what it sees as the unfair imposition of duties.

August 27, 2005

The U.S. lumber industry argues that the tariffs are necessary because provincial governments unfairly subsidize Canadian producers who log on crown land. Canadian companies argue the tariffs are improper because they pay provincial governments market rates for that timber.

“Chapter 19 has been a very important piece in every softwood lumber dispute since the original FTA was signed,” Barutciski said. (Source: Financial Post) 

 

Tuesday July 17, 2017

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday July 17, 2017

Trump administration poised to reveal goals for NAFTA talks

United States Trade Representative Robert Lighthizer is expected to release today his negotiating objectives ahead of talks to revise the North American Free Trade Agreement next month.

April 20, 2017

The goals for the renegotiation, as well as the Trump administration’s rationale for how these objectives will lead to an agreement beneficial to the U.S., must be published on the USTR website, as required by Congress in accordance with the trade promotion authority granted to the White House for renegotiating a standing agreement like this.

Formal talks to revise NAFTA are expected to start next month. Such objectives must be published 30 days in advance.

The Canadian government is not required to publish its negotiating objectives ahead of the formal talks, expected to start on or shortly after Aug. 17. The location for these talks has not been finalized yet.

While Canada has been consulting formally and informally — an official consultation period expires Tuesday — politicians, officials and negotiators have been talking to affected industries for weeks to prepare Canada’s bargaining positions.

June 2, 2017

They’re expected to continue to do so throughout the process, although Parliament does not require the kind of transparency Congress does.

“The other NAFTA parties — Canada and Mexico … their position has been: the U.S. wanted to re-open this and modernize it. We’re just coming along,” International trade lawyer Dan Ujczo told CBC News last week. “So I think in some ways the U.S. is going to set the agenda.”

“If it comes out really short and sweet with a very narrow set of lists, that’s indicating that they want to get this done as quick as possible,” he said. But if it isn’t a deep dive, Ujczo expects Congress to demand more specifics. (Source: CBC News) 

 

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Thursday April 20, 2017

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday April 20, 2017

Canadian envoy fires back at Trump over dairy claims

Canada’s envoy to Washington has shot back at criticism by President Donald Trump and U.S. milk producers, saying the facts don’t support a charge that the Canadian dairy industry is to blame for the woes of some American farmers.

January 26, 2017

“Canada does not accept the contention that Canada’s dairy policies are the cause of financial loss for dairy farmers in the United States,” Ambassador David MacNaughton said in a letter to the governors of Wisconsin and New York that was released Tuesday night in rebuttal to Trump’s surprise criticism of Canada earlier in the day.

“The facts do not bear this out.”

The U.S. president’s surprise decision to call out Canada by name Tuesday put dairy farmers north of the border on notice that they are in America’s fair-trade sights.

Trump launched his broadside after a brewing trade spat that has seen the U.S. dairy lobby accuse Canada of “systemic disregard” of its trade obligations, while the Canadian industry accused its American rival of “scapegoating.”

October 10, 2015

Trump also signalled he wants to do more than simply tweak the North American Free Trade Agreement, saying he is looking for “very big changes” to the trilateral pact that includes Mexico, or else he will scrap it once and for all.

Trump levelled the threats — some of his strongest-ever anti-Canadian rhetoric — during an event at a Wisconsin factory where he unveiled his “Buy American-Hire American” executive order.

After what has been a relatively warm beginning in relations with Canada, which included what was seen by many as a positive trip to Washington by Prime Minister Justin Trudeau, Trump dropped the gloves on Canada’s well-guarded dairy sector.

He appeared to be taking dead aim at the Canadian industry and its supply-management system during an appearance in Wisconsin, a state he took from the Democrats with his “America First” anti-trade message.

It is also a state that is feeling the effects of Canada’s decision to impose import taxes on ultra-filtered milk, a protein liquid concentrate used to make cheese. It had been duty-free but Canada changed course after its milk producers complained. (Source: CBC News)

The Telegram, St. John’s, Nfld., April 25, 2017

Thursday January 26, 2017

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday January 26, 2017

Why President Trump might not be the worst for Canada

Yes, the Donald Trump presidency is going to be bad. Yes, it might be a disaster. But it won’t necessarily be a disaster for Canada.

Consider Canada-U.S. trade. President Trump talks like he believes global trade is a form of war, and every day he threatens to start one. Canada is an exceptionally trade-dependent economy, and almost all of our trade is with the United States. Many of our industries have integrated, cross-border production chains. If President Trump wages trade war against any and all imports, Canada is going to suffer catastrophic collateral damage.

But much more likely, as Blackstone CEO and Trump economic adviser Stephen Schwarzman told Canadian government officials on Monday, is that the President will go after countries running big trade surpluses. That means China. It also means Mexico, which Mr. Trump consistently portrays as a stealer of jobs and exporter of illegal aliens. As a result, NAFTA is almost certainly doomed. 

But if NAFTA disappears or is sent into the limbo of renegotiation, the earlier Canada-U.S. free-trade agreement still stands, and still protects much (though not all) of Canada’s trade access. Given that Canada-U.S. trade is relatively balanced – Canada runs a small trade surplus with the U.S. when oil prices are high, and a deficit when they’re low – it’s unlikely that the Trump administration is going to want to make Canada a priority target.

Visibly steamrolling the Mexican economy will be popular with many voters from both parties. Ditto a trade fight with China. But attacking Canada? There’s no economic logic to it. Nor would there be much domestic political upside in starting a trade war with the place Americans consistently call their most admired foreign country.

Bottom line: The end of NAFTA is not a good thing. However, if the Trump administration stops there, it would mean a big hit for Mexico, but a relatively small hit for the Canadian economy. (Source: Globe & Mail)