In NAFTA talks, keep calm, carry on

The thing to keep in mind as negotiations begin on Wednesday between Canada, the U.S. and Mexico to renegotiate the 23-year-old North American Free Trade Agreement (NAFTA), is that this will be a marathon, not a sprint.

In the course of these negotiations there will be political grandstanding by all sides, ups, downs, veiled threats, overt threats and possibly dramatic walkouts for effect.

We agree with Foreign Affairs Minister Chrystia Freeland that, as she told The Canadian Press, “I think we all do need to be prepared for some moments of drama. We should just see that as an expected part of any trade negotiations.”

The biggest factor suggesting a positive outcome, especially between Canada and the U.S., is that, while there will always be trade irritants, our trading relationship under NAFTA has been fair for both countries.

The proof of that is that while the U.S. has the world’s largest trade deficit — $502 billion in goods in 2016.U.S. President Donald Trump is understandably concerned about, but only $11 billion of that was with Canada.

That’s a tiny amount given that our two-way trade in goods with the U.S. last year was $545 billion.

In some years, Canada finishes slightly ahead of the game and in other years the U.S. does, when it comes to the trade deficit. Among the five largest trading relationships the U.S. has with foreign countries — China, Canada, Mexico, Japan and Germany, its trade deficit with Canada is the smallest by far. That suggests we have a balanced trading relationship.

Further, while all countries claim to be free traders, all are hypocrites to some extent.

Canada, for example, says it supports free trade, but going into these negotiations has also said it is determined to defend our supply management system, which drives up the cost of dairy products for Canadian consumers. But Canada isn’t the only offender. All countries, including the U.S., subsidize and protect certain industries.

The bottom line is that Canada-U.S. trade isn’t broken, so it shouldn’t take a great deal of work to fix it, if both sides are prepared to be reasonable.

Given the importance of trade to both of our countries, we expect they will be.

Canada-U.S. trade isn’t broken, so it shouldn’t take a great deal of work to fix it, if both sides are prepared to be reasonable.”