Trade

Friday March 29, 2019

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Friday March 29, 2019

Canada’s canola conundrum has Trudeau pinned between China and U.S.

March 1, 2019

Trade diversification was supposed to make Canada less dependent on the U.S. But as the canola dispute shows, it has had a perverse effect. It has made this country more dependent on China.

Beijing’s decision to ban two major Canadian companies from exporting canola to China has Prime Minister Justin Trudeau’s government rattled.

Canola is Canada’s largest grain export after wheat. China is Canada’s number one market for canola. Last year Canadian canola seed exports to China were worth about $2.7 billion.

In short, the ban is a big deal — particularly since it is accompanied by a reluctance among Chinese importers to sign any new canola contracts with Canadians.

The ban has lowered canola prices and left Canadian farmers unsure of whether to plant a new crop this spring.

It wasn’t supposed to be this way.

Animated!

Until now, canola has been the poster boy for Canadian efforts to diversify trade away from the U.S. and toward the new markets of Asia. A rapeseed variant both developed in and named for Canada, canola is a hometown success story.

Appropriately perhaps, Canada is the world’s largest producer of canola. Virtually all of it is exported, with China, Japan and Mexico being the top three destinations.

When Finance Minister Bill Morneau wrote in his 2017 budget about focusing on technological change in Canada’s agri-food industry, canola was almost certainly one of the examples he had in mind. When Trudeau mused about free trade with China, canola was front and centre.

But as Canada’s long and complicated history with the U.S. shows, trade relations come at a cost. (Continued: Toronto Star) 

 

Wednesday February 6, 2019

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Wednesday February 6, 2019

Knuckling under pressure to the U.S. won’t win battle of steel tariffs

What was Ontario’s economic development and trade minister thinking when he publicly called on Canada to surrender in the trade war with the United States?

March 3, 2018

On Monday Todd Smith said Canada should remove tariffs put in place in response to Donald Trump’s imposition of 25 per cent tariffs on steel imports and 10 per cent on aluminum. Canada’s tariffs match those dollar for dollar, and are used in part to support companies and workers in the affected sectors.

Further, Smith said his boss, Doug Ford, wanted the same thing. “I know that the premier has suggested this to the federal government that they should remove their tariffs as a first step in removing tariffs overall.” As far as we know Ford hasn’t spoken on the matter, but if that’s how he feels, he should go public.

June 15, 2018

Why on earth would anyone, Ford or his minister, believe that Donald Trump would respect capitulation? Has Trump shown in past behaviour that he respects weakness? We must have missed that newscast.

Smith’s suggestion is so patently ridiculous it took only hours for steel and aluminum companies to pipe in with their support for Ottawa. A tweet from the Canadian Steel Producers Association, said: “The federal government’s retaliatory action against the U.S.A. is vital in protecting businesses and steelworkers.” The Aluminum Association of Canada said the Trudeau government should “maintain all tariffs on U.S. imports and support Canadian businesses as long as U.S. tariffs are in place.”

June 28, 2018

Analysts and pundits from all quarters were equally mystified and distraught. Why would the Ford government side with Trump against Canada? More than one suggested it might be linked to Ford’s oft-expressed respect and affection for Trump’s leadership. But suggesting Canada should surrender?

It turns out, if you believe the updated position of the province, that wasn’t behind Smith’s play. He really meant to say we should revisit tariffs on things other than steel and aluminum, like Kentucky bourbon and playing cards. That, he says, will demonstrate to Trump that Canada is willing to deal. This new position — if it can be called that — isn’t nearly as damaging, but it’s equally stupid. Do Smith and his boss really think Trump will come to the table based on bourbon and playing cards?

June 6, 2018

He won’t. He thinks his tariffs, broadly, have been a huge success and a sign of his historic greatness. Yes, they’re hurting Americans as they’re hurting Canadians, but Trump isn’t one to worry about his own citizens welfare. In his view, measures like these are signs of strength and dominance.

Tariffs are a real and growing problem for steel and aluminum companies. High steel prices have cushioned steel producers to some extent, but the impact of tariffs is already being felt in Sault St. Marie, and will eventually hit Hamilton as well.

Canada continues to work trade and diplomatic channels to see tariffs lifted. Some have suggested the prime minister shouldn’t give final approval to the new NAFTA agreement without resolution, and that might be worth considering. Trump sees NAFTA as a major accomplishment, and the fact that it might be stymied due to his nonsensical tariffs will trouble him. His own Congress has said it won’t support the new trade pact until tariffs have been lifted, and that might be worth Ottawa’s consideration, too. Much more work remains to be done.

But please, no more suggestions that Canada take a knee to the biggest bully in the free world. That’s embarrassing, and would only make dealing with Trump more difficult. The Trudeau government has walked a fine line to date between working with Trump and not being pushed around. That should continue to be its strategy. (Source: Hamilton Spectator Editorial) 

 

Friday November 30, 2018

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Friday November 30, 2018

USMCA signing could be overshadowed by larger divisions between nations at G20

Officials don’t know yet who will sign the pact. And they haven’t said exactly when, or where, it’s going to happen.

October 2, 2018

But when the G20 summit in Buenos Aires is over, the leaders of Canada, the United States and Mexico are supposed to be coming home with a newly signed trade agreement.

Prime Minister Justin Trudeau said Wednesday his government was “still in discussions” with Washington about the timing and circumstances of the official United States–Mexico–Canada Agreement signing event. At any rate, it may turn out to be a hold-your-nose moment for the Trudeau government, which had hoped to see U.S. tariffs on steel and aluminum lifted before signing day.

August 18, 2018

The chances that the tariffs will even be discussed at the summit, let alone lifted, are so slim that a source tells CBC News that Canada’s ambassador to the U.S. isn’t even going to Argentina.

David MacNaughton has been a key leader for the Canadian trade negotiating team, but he will not be present for the anticipated signing ceremony, or for any sideline talks with the Americans in Buenos Aires.

While the USMCA signing will be big news in Canada when it happens, it’s likely to be overshadowed by the larger global divisions on display at the G20.

June 9, 2018

The official agenda will see leaders discussing different approaches to sustainable and fair growth for the global economy. But these conversations come at a time when confidence in multilateral institutions is declining.

The Americans have been at the centre of two summits that ended in diplomatic disaster in this year alone.

Most recently, the APEC summit in Papua New Guinea ended without a communique, as trade frustrations between the U.S. and China flared.

In June, the G7 summit in Charlevoix, Quebec ended with President Trump pulling his support for the communique and lashing out at Prime Minister Justin Trudeau, calling him “weak.” (Source: CBC) 

 

Friday November 16, 2018

November 16, 2018

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Friday November 16, 2018

The Brutal Reality Of Brexit

June 25, 2016

Theresa May’s chickens are coming home to roost. The deal she agreed with Brussels is unravelling fast, and her premiership along with it. So far, seven of her ministers have resigned. Letters calling for her replacement are pouring in to the powerful chairman of the Conservative Party’s 1922 Committee: once he receives 48 letters, there could be a vote of confidence in her leadership, and perhaps a leadership challenge. Other Tories are calling for a second referendum. Meanwhile, the Labour party is slavering at the possibility of an early General Election. The political crisis that has been simmering since 2016 has erupted with a vengeance.

The political fallout from Mrs. May’s latest attempt to square the Brexit circle is understandable. Her Brexit deal is horrible. It would lock the UK into a “frozen Brexit”, neither in the EU nor completely out of it.  The U.K. would be forced to accept EU decisions over which it would have no say, and continuing to contribute to the EU budget despite no longer being a member. It would also be unable to enact its own trade deals with the rest of the world until the freeze ended. And it would be unable to end the freeze unilaterally.

June 22, 2016

The idea is that this “frozen Brexit” would initially be only for a transitional period ending in December 2020, when it would be superseded by a free trade agreement. But the proposal allows this date to be extended, if necessary for decades, if no free trade agreement is negotiated. And if the transition ends without a free trade agreement, then the entire U.K. would remain in a customs union with the EU indefinitely, but Northern Ireland would have a closer relationship with the EU than the rest of the U.K.

For Brexiters and Remainers alike, this is the worst of all possible solutions. But horrible though it is, this deal satisfies the conditions set by Mrs. May in her Lancaster House speech. It also satisfies the EU’s conditions. No other proposal achieves this. It is, therefore, the best deal available. The U.K. Government has struck a deal that allows Britain to have its cake and eat it – but the cake tastes so disgusting that no-one wants to eat it. (Source: Forbes) 

 

Tuesday October 2, 2018

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday October 2, 2018

President Trump creates crises, then claims credit for solving them

September 5, 2018

President Trump’s specialty is to create crises and then claim credit for solving them. Last year, for example, he ratcheted up the rhetoric against Kim Jong Un — a.k.a. “Little Rocket Man” — threatening to rain “fire and fury” on North Korea. Trump now claims he and Kim “fell in love” after Kim sent him “beautiful letters,” and that, were it not for this bromance, “you’d be in a war” and “millions of people would have been killed.” In reality, no one thought a second Korean War was likely before Trump took office. That only became a serious risk because of his unhinged rhetoric.

Trump has applied this same template to the North

August 28, 2018

American Free Trade Agreement (NAFTA), which he spent years lambasting as “the worst trade deal ever approved.” According to Bob Woodward’s book “Fear: Trump in the White House,” Trump was on the verge of pulling out of NAFTA in April 2017, and had to be talked back from the brink by senior aides. He grudgingly remained in the deal while launching high-pressure negotiations to rework it.

Lo and behold, just ahead of a U.S.-imposed deadline on Sunday night, the United States, Mexico and Canada agreed on a revamped NAFTA. Trump triumphantly proclaimed on Twitter that this was a “wonderful new Trade Deal,” “historic,” and “a great deal for all three countries.” “NAFTA is dead,” said White House trade adviser Peter Navarro. Long live the new United States-Canada-Mexico Agreement (USMCA).

June 13, 2018

In fact, the biggest change is the name of the trade deal, and it is not an improvement. Just try saying “USMCA.” It does not roll off the tongue the way “NAFTA” did. As for the substance, my Council on Foreign Relations colleague Benn Steil rightly describes the new agreement as “little more than margin edits.”

Trump’s biggest victory was in opening up slightly more of the Canadian dairy market for U.S. exports. This has long been an obsession for him. He complained in June: “Canada charges the U.S. a 270% tariff on Dairy Products! They didn’t tell you that, did they? Not fair to our farmers.” Trump was right about the Canadian tariffs. What he didn’t mention is that the United States still ran a $474 million dairy surplus last year, with U.S. farmers selling five times more dairy goods to Canada than U.S. consumers bought from Canada. In any case, milk products represent just 0.06 percent of U.S.-Canada trade, 99 percent of which was already tariff-free. (Source: Washington Post)