NAFTA, yet again

There is a very insightful article in the Globe and Mail by former (one term, 1993-97) Liberal MP, lawyer and lobbyist Barry Campbell (no relation, as far as I know). Mr Campbell was a “blue Liberal” and a Paul Martin supporter in the Chrétien~Martin civil wars that rocked the Liberal Party back around 1999 to 2003.

Mr Campbell suggests, and I agree, that the US administration has floated a trial NAFTA negotiating balloon to get US states and legislators on board. Some may remember that I have, in the past, noted that a very large number of US states have Canada as their largest trading partner; state governors and state representatives in the federal congress in Washington are going to be cautious about doing things that might upset the balance because, as Mr Campbell says, “Ironically, half the things the United States is demanding of Canada and Mexico (e.g. access to local government procurement, meeting international labour standards) would be on Canada’s list, too. If the U.S. would commit to many of these same things, we might be happy to put down our pens and to go home happy campers … [because] … That’s the funny thing about trade. It goes both ways. They need some of our stuff. The trade war you want is not usually the one you get. The United States will take aim at limits Canada has on foreign ownership of major financial institutions and in telecommunications, and we will ask about formal and informal limits in the United States of ownership in banking, aviation and communications, and the wide-open process whereby the United States determines what are strategic assets subject to review … [and] … The document demands that NAFTA be modernized. Well and good. The world has changed in the last 20 years. But demands for greater openness and opportunity in data and culture is not something new. The United States has consistently pushed to open up opportunities where it has advantages. No nation develops its trade policies devoid of any analysis of where its relative advantage lies. For the United States, that is with the Apples and the Disneys. Remember that and focus on data and intellectual property.

Mr Campbell says, and I agree again, that “For Canada, the draft is a useful document signaling where the United States is coming from and where it wants to get to … [and] … Canada has always known where its interests lie and will protect and project its comparative advantage. We have a wish list, too. We have trip wires like the need to attract foreign investment, protect culture and privacy and our sovereignty. But let’s take President Trump’s advice and not let the Americans know what’s on and off the table before the talks even start.

NAFTA is, arguably, overdue for a “servicing” and some, indeed many of the things President Trump appears to want are “good” for Canada so long as they are proper, two-way, agreements. Giving full “access to local government procurement,” would, for example, drive one stake into the hearts of some of the various US “Buy American” laws. An article in Politico explains why NAFTA is so popular in the USA and, therefore, why many American legislators will be reluctant to fiddle with it.

Plus, Canada, of course, can and should “give” a little to get a little, too: some of our more blatant protectionist policies, like protecting egg and dairy markets, should go ~ as Maxime Bernier, correctly, campaigns to trade away while others, including my preferred candidate, pledge, incorrectly, to keep. But if we are going to “give” we will want to “get” some of the very things, like “Buy American,” that, even though they are bad policy, are good politics and are things that some Americans want to keep.

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