‘Clause’ for concern in NAFTA talks?
Asunset clause for NAFTA? Watch this Tuesday to see if a renegotiated North American Free Trade Agreement (NAFTA) can be agreed on in principle.
May 1 is the Americans’ preferred date for nailing down an agreement among Canada, the U.S. and Mexico. The mood around NAFTA has been positive in these late stages of negotiation, marred only by a clash last week between Canada and the U.S. over an American proposal for a termination clause in a new deal.
Canada opposes a so-called “sunset clause” because it would, according to Chrystia Freeland, the Canadian for- eign affairs minister, impose an element of uncertainty in the new pact. Besides, she points out, there’s already a provision in the existing deal for partners to quit the agreement (on six months’ notice).
Yet, if there’s to be a last-minute holdup, one could fear more intractable setbacks than a termination clause.
Actually, that idea resurfaced after lying dormant since last fall when the U.S. proposed a five-year sunset clause but then put it aside.
An agreed-upon trade pact with a five-year lifespan would bring half a decade of certainty to the deal. That’s surely an improvement over the current uncertainty, which economists estimate will cut Canadian GDP growth by 0.2 per cent this year. And extending the existing agreement’s six-month termination notice to five years would seem advantageous. Even then, termination of a new NAFTA in five years’ time could be avoided if the three partners agreed to the pact’s continuation.
Canada should resist a sunset clause only if the Americans tie it to the size of trade deficits among the three partners, a proposal about which the Americans have recently mused. That could indeed make the new pact a source of constant uncertainty. Facebook’s Teflon coating It’s an odd notion that Facebook would suffer any significant harm from revelations last month that purloined personal data of millions of Facebook users had been used to influence the 2016 U.S. presidential election.
Facebook is no mere company. It is a utility, an extension of its 2.2 billion users’ daily routines and personas.
Julian Knight, a U.K. MP, lit into Facebook’s chief technical officer in a recent parliamentary hearing, calling Facebook “a morality-free zone destructive to a fundamental right of privacy.”
But data breaches have become so thoroughly a fact of modern life that, beyond the news media and politicians, the Facebook scandal hasn’t amounted to even a flesh wound for the company.
Facebook’s first quarterly financial results since the scandal broke, reported last week, prove that point.
In its 14th year, Facebook should be entering a somewhat slower-growth, mature-company phase, as Apple and Google’s parent Alphabet are doing.
But in the first quarter, Facebook’s revenues leapt almost 50 per cent to $11.9 billion (U.S.). Profit jumped 63 per cent to nearly $5 billion.
Notwithstanding a #deletefacebook campaign, the Menlo Park, Calif., firm added 70 million more monthly users in the quarter, for a current total user base of 2.2 billion.
And advertisers are not defecting, despite undeniable reputational damage Facebook has endured over the scandal. The firm’s first-quarter revenue and profit performance make that clear. “Advertisers are more in a waitand-see mode,” Andy Taylor of U.S. data marketing firm Merkle told the Wall Street Journal last week.
Actually, there’s no need to wait and see. Facebook is here to stay, and pretty much in its current form. Ford, where cost-cutting is Job 1 In what was intended as a decisive proclamation, Jim Hackett, turnaround CEO at Ford Motor Co., boldly said last week that, “We’re going to feed the healthy part of our business and deal decisively with areas that destroy value.”
Ford hopes to save an impressive $22.5 billion (U.S.) over the next four years with its reductive strategy, though don’t expect a Wall Street repeatedly disappointed by Ford in recent years to respond with a boost in Ford’s ailing stock price.
Actually, Ford’s Detroit rivals are making the same bet. General Motors and Fiat Chrysler are also refocusing on low-cost, high-margin pickups and SUVs, and abandoning marginally profitable passenger cars. It’s a high-risk strategy. What if today’s comparatively low gasoline prices break out of that pattern, becoming a drag on SUV sales? And what if the Trump administration’s planned reversal of the Obama era’s strict emissions standards is challenged by state governments (starting with ecology-minded California, the biggest U.S. market), or doesn’t outlast the Trump years?
Meanwhile, the continuing migration of North Americans to urban centres will be a bonanza for the likes of Toyota, Honda, Volkswagen, Suzuki, Hyundai and its affiliate Kia, and other automakers with commanding expertise in passenger vehicles. Econo-cars, family sedans and crossovers are easier than pickups to navigate in congested cities. And they are the preference of millennials, the first generation with an ambivalence to vehicle ownership.
Meanwhile, the arrival of North American interlopers from China is less than five years away. By government edict, China’s dozens of automakers are leading the world in perfecting the electric vehicles (EVs) that will dominate the global industry by 2030.