Talking trade in uncertain times
Like most things involving U.S. President Donald Trump, it’s probably better to wait a few days and see if clearer heads prevail. Or, if a week down the road, things make more sense.
Monday, Trump and Mexican President Enrique Peña Nieto announced that their two countries had reached a bilateral “understanding” on trade, with Trump saying that Canada could opt to join in the deal, or look for its own bilateral deal with the U.S.
That must be a little disquieting for the Canadian government, because the North American Free Trade deal had been a tripartite arrangement, with changes supposedly jointly reached by the three countries.
For Canada, a North American trade deal is a critical thing; for one thing, much of our export business is with the U.S., and ever since Trump’s launch of a tariff war with, well, pretty much everyone, you can well imagine Canadian businesses biding their time about investing in equipment and hiring staff to continue to feed the U.S. market.
Trump has proven to be remarkably volatile, lurching from petty slight to grandiose attempts at international diplomacy. (In that category, North Korea denuclearization — a win or an expensive public relations stunt?)
He’s threatened to bail out of the NAFTA deal regularly, railed against supply management, argued that Canada was abusing the process, negotiating unreasonably, and the list goes on.
All of this over trade between the three countries that’s worth more than $1 trillion a year.
The announcement with Mexico was a quickly organized affair, and the Canadian government looked to be scrambling a bit as they responded.
“Canada’s signature is required,” Foreign Affairs spokesman Adam Austen said in an email. “We will only sign a new NAFTA that is good for Canada and good for the middle class” and “we will continue to work toward a modernized NAFTA.”
Foreign Affairs Minister Chrystia Freeland is in Europe this week, Canada hasn’t been at the table in the talks since July.
One thing is certain. Getting a deal down on paper might do a lot to, if nothing else, focus Trump’s volatility on someone else for a while.
Any deal, though, will have to be ratified by all three countries and, in the case of the United States, will have to go through Congress. Significantly, given U.S. trade law, it will have to go through Congress after the mid-term congressional elections in November, when the electoral map may be significantly different than it is now.
Let’s wait a few weeks and see what shakes down, see what is true, and what’s just Trump’s trademark trade bluster. Right now, for example, Trump is making great hay out of changing NAFTA’s name to make it more palatable. And what does the name matter?
The suggestion, clearly, is that, as in many presidential matters right now, appearance trumps reality.