Why sign a trade deal with a government we know we cannot trust?

Canada has been had. The Mexicans and Americans have agreed behind Canada’s back to cut a bilateral deal that would replace the North American Free Trade Agreement.

Justin Trudeau’s Liberal government has been told it can join in, but only if it capitulates to all of Donald Trump’s demands.

For his part, the American president has threatened to impose 25 per cent tariffs on Canadian auto exports to the U.S. unless Ottawa abandons its support for domestic dairy farmers and signs on immediately to the Mexico deal.

Now we’ll see whether the prime minister has the nerve to walk away from a pact that, in its current form, does not meet what he has called Canada’s miniWe mum needs.

In particular, the agreement reached by the Mexicans and Americans appears not to include an independent dispute-resolution system for sorting out trade conflicts among the signatories.

Canada has long insisted that this is a must. NAFTA’s precursor, the original 1989 Canada-U.S. Free Trade Agreement, was almost scuppered by Ottawa over U.S. resistance to this demand.

The Mexico-U.S. deal also includes a so-called sunset clause, a date by which the agreement, unless specifically extended, will automatically expire. According to Trudeau, that too is an absolute no-no for Canada.

True, the time frame has been extended from the original American proposal of five years to 16. But the essential problem with the sunset clause — that placing an arbitrary deadline on a trade deal leads to investment uncertainty — remains.

And the fact that the new deal would be open to renegotiation after just six years won’t help. It merely promises to add to this uncertainty.

Not everything in the Mexico-U.S. deal would be bad for Canada. Indeed, some parts would be positive.

The original NAFTA allowed companies, particularly big auto manufacturers, to relocate their operations from Canada and the U.S. to low-wage Mexico.

To his credit, Trump recognized that this was a job killer for his country. The new Mexico-U.S. deal specifies that at least 40 to 45 per cent of automotive content must come from factories where workers make at least $16 (U.S.) per hour.

The new pact would also tighten socalled rules of origin to ensure that at least 75 per cent of the content in autos sold duty-free under the deal comes from a country that is signatory to the agreement.

That too would benefit Canadian auto workers if Ottawa signed on.

Yet these positives are not enough to justify Trump’s demand that Canada sign onto the Mexico-U.S. deal immediately.

Some of the provisions of that deal, such as those dealing with intellectual property and drug patents, are still unclear.

Trump’s demand that Ottawa completely abandon supply management, a program aimed at protecting poultry and dairy farmers, would decimate Canadian operators while bringing consumers few advantages.

“We will always defend our supply management system because it works,” Trudeau said in June, a sentiment he repeated Tuesday. And while his government has already agreed to whittle back the program to meet the demands of trading partners in Europe and the Pacific, that statement remains true: Supply management does work.

But the main reason to resist signing on to this new deal is that the U.S. has shown it cannot be trusted.

Trump has already used bogus national security concerns as a rationale for circumventing NAFTA and applying tariffs on Canadian steel and aluminum.

Why sign onto another deal that the Americans feel they can break with impunity? We’ve already been had once. There’s no need for a repeat.