Get ready for any­thing, trade lawyer tells busi­ness com­mu­nity on NAFTA

The Daily Courier - - CANADA -

OT­TAWA (CP) — Grow­ing un­cer­tainty over the fu­ture of the North Amer­i­can Free Trade Agree­ment means com­pa­nies need to brace them­selves, in­clud­ing for the pos­si­bil­ity that Pres­i­dent Don­ald Trump walks away from a deal, a trade lawyer is warn­ing the busi­ness com­mu­nity.

“The first step is for com­pa­nies to un­der­stand this is very real and that they need to start con­tin­gency plan­ning,” said Dan Ujczo, an in­ter­na­tional trade lawyer spe­cial­iz­ing in Canada-U.S. mat­ters.

On the cam­paign trail last year, can­di­date Trump vowed to rip up NAFTA — the 23-year-old trade agree­ment be­tween the U.S., Canada and Mex­ico — if he could not rene­go­ti­ate a bet­ter deal.

His re­cent re­it­er­a­tions of that threat, along with de­mands Canada and Mex­ico con­sider im­pos­si­ble, have forced ev­ery­one to take it more se­ri­ously.

It re­mains to be seen whether Trump will in fact at­tempt to with­draw, how U.S. Congress would re­act, whether Mex­ico and Canada would still keep talk­ing and what that would end up mean­ing, in real terms, for cross-bor­der trade be­tween the three coun­tries.

The U.S. busi­ness and agri­cul­ture com­mu­nity has been ramp­ing up its ef­forts to con­vince Congress, which could use its leg­isla­tive pow­ers to make it harder for Trump to exit the agree­ment, that they are not on board with aban­don­ing the deal.

That out­reach is im­por­tant, Ujczo told busi­nesses dur­ing an on­line pre­sen­ta­tion Fri­day, but it is also not too early to get ready for any out­come.

There are some prac­ti­cal mat­ters to con­sider, such as tak­ing a look at the sup­ply chain to de­ter­mine how ex­posed a busi­ness would be­come if some of the tougher pro­pos­als, such as stricter rules of ori­gin for the ma­te­ri­als used in auto man­u­fac­tur­ing, come to pass.

That should in­clude ex­am­in­ing check­ing cer­tifi­cates of ori­gin and main­tain­ing scrupu­lous records, be­cause both client com­pa­nies and cus­toms of­fi­cials are likely to start ap­ply­ing greater scru­tiny as they also get ready for the new way of do­ing things.

“It’s time to re­ally buckle down and take a look at that, be­cause th­ese pro­pos­als are go­ing to heighten aware­ness through­out the sup­ply chain and at the bor­ders,” Ujczo, who is with the cross-bor­der firm Dick­in­son Wright, in Colum­bus, Ohio, said dur­ing the pre­sen­ta­tion.

The lawyer also had ad­vice for com­pa­nies think­ing about out­sourc­ing to Asia as a way to min­i­mize the fall­out from the NAFTA rene­go­ti­a­tions.

“Keep in mind NAFTA is not the only thing the Trump ad­min­is­tra­tion is do­ing. It’s tar­get­ing Asia,” said Ujczo, who noted the U.S. has been ramp­ing up its trade en­force­ment ac­tiv­i­ties all around the world. “The only way the Trump trade strat­egy works is as a one-two punch: tight­en­ing up North Amer­ica, while also tar­get­ing goods com­ing in from over­seas.”

That raises the ques­tion of whether Cana­dian com­pa­nies should think about pack­ing up and mov­ing south.

Ujczo said that would not be the case for ev­ery­one, but if they have U.S. cus­tomers, it makes fi­nan­cial sense and the com­pany was al­ready think­ing about mov­ing there some­day, it might not be a bad idea to speed up those plans.

The Cana­dian Press

Prime Min­is­ter Justin Trudeau and U.S. Pres­i­dent Don­ald Trump take part in a joint press con­fer­ence at the White House in Wash­ing­ton, D.C. on Fe­bru­ary 13, 2017.

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