North American Free Trade Agreement
Donald Trump made an election promise to the American people. Actually he made many promises, never thinking that he’d have to keep any of them, because he expected to lose. The particular promise I wish to discuss is the one where he would renegotiate NAFTA to get better terms. He said that Canada outsmarted the American politicians, and that we have a trade surplus.
Well, I guess that’s what he actually believes, because he keeps talking about the damned surplus as if it were a fact.
But there are three parties to this agreement, and Canada is only one third of the pact.
The Sticking Point
The United States only likes to have ‘free trade’ agreements when they benefit the most. Heaven forbid if any other country makes a profit or maintains their industries. And, from the Northern neighbour’s perspective, Americans don’t want to pay the going rate for anything. If it isn’t discounted to half-price or less, they scream ‘foul’.
And speaking of ‘fowl’, farm and dairy produce cannot have food marketing boards because that takes away their competitive edge. Same with the timber industry: they see Canada as subsidizing the producers, which allows the prices to be kept artificially low. “Unfair!” they say. It means that we can flood their markets with cheap lumber.
From our side of the 49th Parallel, it appears that the American people get everything at a reduced rate, and then they get the benefit of even cheaper goods from us because of the difference in foreign exchange between US and Canadian dollars.
Trump threatens to tear up NAFTA completely if he doesn’t get his way. Steel and aluminum are already getting surtaxed from other foreign sources, including China. The dangling carrot is that he won’t surcharge our goods if we bend over and let him screw us. Well, he can go screw himself, because a trade war with the rest of the world and us, allows Canada to make bilateral agreements everywhere else. The Chinese are just waiting for us to say ‘yes’ to them and ‘no’ to Trump.
Yes, we will all have to pay more for some goods, but we will perhaps stop being foolish enough to put all of our eggs in one (American) basket. Let’s share the wealth.
Let’s let Trump build walls and close trade doors to the world. We will all be better off.