National Post (National Edition)
THE THREE NATIONS HAVE YET TO INDICATE ANY REAL INTEREST IN FREE TRADE.
are on strike against a General Motors plant in Ontario and putting other parts of parts of the auto sector on shutdown risk.
American trade leaders are also focused on transforming NAFTA into NATPA, especially in the auto sector. President Trump’s trade representative, Robert Lighthizer, sounds like a union boss when he cites the need to set higher North American content rules for the auto sector.
Trump’s commerce secretary, Wilbur Ross, continues to make economically absurd claims that U.S. manufacturing trade with Canada and Mexico needs to be in balance. In a recent op-ed in The Washington Post, and in media appearances, Ross produced statistics he claims demonstrate that the U.S. is losing its rightful share of the North American auto market. “The United States would enjoy a trade surplus with its NAFTA partners were it not for the trade deficit in autos and auto parts.”
The actual numbers behind these claims — produced by the U.S. Office of Trade and Economic Analysis — are irrelevant from a free-trade perspective. The concept of a necessary “trade balance” in any one sector or sub-sector is an economic absurdity. Other economists have already jumped in with criticisms and counter claims, thereby engaging in a dispute that only distorts and obscures the nature of free trade and feeds the populist idea that “trade deficits matter” and are hurting industries and workers.
In autos, the U.S. objective is to impose higher and tougher “rules of origin” that they say currently allow too much foreign content into the auto sector. The effect of higher total NAFTA content-quota rules on autos and auto parts would be to raise barriers against foreign suppliers. Quotas are trade barriers that, in this case, are designed to protect the North American industry and union workers, and keep prices high for consumers.
Ah, yes, consumers. Lost and forgotten in the scramble to impose more rules, quotas, regulations and greenness on the internal workings of the North American economy is the consumer sector that would benefit from freer trade but would suffer under greater protectionism and the continuation of the high tariffs on auto-sector imports.
The new NATPA taking shape in these early stages of negotiations seems destined to set up trade walls around parts of the North American economy and remake the continent along the European Union model. The result can only mean higher costs to all consumers, whose benefit should be the ultimate objective of trade negotiations.
But who’s looking out for consumers? Not the Trudeau government. In August, Freeland appointed a NAFTA council stacked with people who have no obvious interest in real free trade.
The council includes a few industry executives, a First Nation chief, an NDP strategist and union leader, a couple of former politicians, another union leader, and assorted beneficiaries of previous government appointments.
Ottawa’s NAFTA council cannot be counted on to stand up — as a group or individually — for the principles of free trade. Nor can another NAFTA advisory council set up by Environment Minister Catherine McKenna.
At the heart of the trade negotiations is the original NAFTA, which, despite its name, was never a free trade deal. But it did reduce many trade barriers and protections that, under the current negotiation trajectory, are at risk of returning. If this trajectory remains in place, Canadian consumers might want to join their British counterparts and consider a Canadexit. Just a thought.