Why we need to care about NAFTA

The Hamilton Spectator - - OPINION - Howard El­liott

Many Cana­di­ans love to hate trade, and that prob­a­bly in­cludes ed­i­to­ri­als about trade. It’s not well un­der­stood. It’s a dense topic. The poster child is the North Amer­i­can Free Trade Agree­ment, and in the minds of many NAFTA hasn’t de­liv­ered what it promised. But here’s the re­al­ity: It mat­ters.

NAFTA cre­ated the world’s largest free trade area of 450 mil­lion peo­ple. Global Af­fairs Canada re­ports mer­chan­dise trade be­tween Canada, Mex­ico and the U.S. tripled — to $1 tril­lion — be­tween 1993 and 2015. More sig­nif­i­cantly, Cana­dian ex­ports to the U.S. have grown at an an­nu­al­ized rate of nearly five per cent.

That doesn’t mean that every­one has won un­der NAFTA, but it means it is a net ben­e­fit to Canada, and the coun­try would be worse off if it was torn up, as Pres­i­dent Don­ald Trump once threat­ened to do.

On Mon­day, lead U.S. trade ne­go­tia­tor Robert Lighthizer re­leased a broad out­line of what the Amer­i­cans are look­ing for in ne­go­ti­a­tions set to start next month.

The U.S. wants bet­ter ac­cess for its agri­cul­tural ex­ports — in­clud­ing dairy prod­ucts, wine and grain. It also wants freer trade in telecom­mu­ni­ca­tions, and on­line pur­chases; new rules on cur­rency ma­nip­u­la­tion; and an over­haul of the dis­pute-set­tle­ment sys­tem.

Of these, the thorni­est prom­ises to be sup­ply man­age­ment sys­tems like the one Canada uses around dairy pro­duc­tion. The truth is the sys­tem works for Cana­di­ans. Amer­i­cans want more ac­cess to the mar­ket, but to give that will jeop­ar­dize the sup­ply man­age­ment sta­tus quo. The agri­cul­ture lobby in Canada is a pow­er­ful force, but not nearly as much as in the U.S. Still, the fed­eral govern­ment will have to tread very care­fully.

Freer trade in telecom­mu­ni­ca­tions sounds promis­ing on the sur­face. Cana­di­ans pay too much for wire­less ser­vices and the idea of more com­pe­ti­tion from the much larger U.S. field will ap­peal to many. But how much is too much? The U.S. dwarfs the Cana­dian mar­ket, with all the pos­i­tives and neg­a­tives that im­plies.

What the Amer­i­cans want around on­line shop­ping is less re­sis­tance. Canada has among the stiffest tar­iffs in the de­vel­op­ing world, and again, con­sumers will be in­ter­ested in any­thing that gives more se­lec­tion and sav­ings. But bal­anc­ing that against the Amer­i­can ten­dency to take over mar­kets will be a chal­lenge.

The good news? The White House, and its ne­go­ti­a­tion team, can­not do this alone. They have to work with Congress, home to rep­re­sen­ta­tives from many states where Canada is the main trad­ing part­ner. Thou­sands of jobs and mil­lions of dol­lars are at stake in the U.S. and even more in Canada.

NAFTA’s health and sur­vival are crit­i­cal. There are few more im­por­tant jobs on Prime Min­is­ter Justin Trudeau’s desk.

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