Home News Renegotiating the ins and outs of NAFTA

Renegotiating the ins and outs of NAFTA

by Mina Mazumder March 13, 2018
Renegotiating the ins and outs of NAFTA

Panelists discuss how recent trade negotiations may potentially affect Canada

“What we need is for our Canadian government to be standing up far more strongly than what we have seen so far,” said former New Democratic Party leader Thomas Mulcair at a panel hosted by the Concordia School of Community and Public Affairs on March 6.

The focus of the discussion, moderated by Daniel Salée, a political science and public affairs professor at Concordia, was the ongoing renegotiations of the North American Free Trade Agreement (NAFTA).

“[Canada has] every right to be adamant in opposing that type of purely discretionary imposition of an absolutely illegal tariff,” said Mulcair in reference to President Donald Trump’s controversial announcement on March 1 that the United States would be imposing a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminum imports. “It would affect a lot of jobs in Canada.”

Although the tariffs are set to take effect before the end of the month, it has since been announced that Canada and Mexico will be exempt, pending a new agreement on NAFTA, reported The Washington Post.

“I don’t believe that we should be bullied into a bad agreement. We must make sure that an agreement is a win-win situation,” said panelist Michel Vincent, the Quebec Forest Industry Council’s director of economics, markets and international trade.

For Vincent, the most important element of NAFTA to be renegotiated is Chapter 19, which currently allows Canada to bypass the court system and instead create a binational panel of arbitrators to review the merit of any antidumping or countervailing duties on Canadian products imported into the United States, according to Maclean’s.

“It will be the most difficult point to achieve with the United States,” Vincent said, because in the last 25 years, the United States has lost 173 of the 180 cases in which Chapter 19 was invoked. If this section of the agreement is not strengthened or at least maintained, he added, “NAFTA is not worth a lot to Canadians.”

However, Vincent pointed out that, despite the current administration’s objections, most Americans still share the same values as their northern neighbours. “We should not get misled with the Trump rhetoric,” he said. “I think we have to wait him out.”

In the opinion of panelist Ian Lee, an associate professor at Carleton University’s Sprott School of Business, Trump has a particular agenda when it comes to NAFTA.

“It’s really clear; he wants to make it really cheap to do business in the United States to encourage businesses around the world to relocate to the U.S.,” he said.

Lee added that there are many urban legends about international trade. “The common belief that trading leads to poverty,” he said, “is empirically inaccurate.”

“Trump has the tendency to view things from only one side, which is his own,” Mulcair added. “In international trade, you have to look at how it works both ways.”

According to the former NDP leader, the president’s rhetoric takes the focus off more serious issues, like improving the United States’ farm and food trade systems. Although the Canadian supply management system for poultry, dairy and eggs works well and “provides stability to our farming families,” Mulcair said, this kind of support for farmers “is severely lacking in the United States.”

Mulcair said he strongly believes that a failure to renegotiate NAFTA will have a negative impact on both Canadians and Americans. “There are things that can be an improvement to NAFTA. […] There’s a way to make it a better agreement. But the idea that the Americans would walk away from something that important for their own economy, I think that is really difficult to conceive of,” he said. “But you never know with Donald Trump.”

Photo by Mackenzie Lad

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