NAFTA Is Not Going Anywhere Yet

NAFTA Is Not Going Anywhere Yet

In November 2018, the negotiators for Canada, America and Mexico concluded their talks and signed what was to be the new NAFTA agreement.  Or as Donald would call it the USACM of course with the USA which is between the two countries being first.  I liken it sort of to the middle child who insists he is the oldest.  But it’s true… he changed his birthday and everything.  I can’t believe the lies that continue to drool out of that so called President’s mouth.  He is even claiming that he “made Canada nicer” and all he had to do was threaten the leaders with a plastic car on his desk whenever he thought Canada was slipping away from what he would consider a good deal.  AAAAARG!! Are you angry yet?   And what we do know is that NAFTA is not going anywhere yet.

At this point, there are still obstacles on all sides.   I was very happy to read in an article written by From Press that the deal is not in fact done yet.  And according to more than one source, Canada has put the tariffs on aluminum and steel on the table as a sticking point that needs to be addressed before putting it to a vote.

Canada though is not the only hurdle for this deal.  It turns out that the  Congress which is controlled by the Dems as the orange haired guy would call them, along with Canada are also not happy on another component of the agreement.  They want labour reform by Mexico to improve working conditions to put them more on par with Canada and USA because they have an unfair advantage.  But guess what…  according to an article by Global,  Mexico says it will happily stay put until USA removes the same steel and aluminum tariffs put on them by the oval office.

I see a circle here created unnecessarily by one person and his posse.  It’s sort of funny because the Democrats want the deal to be revisited but do not even make any mention of the two countries that they need for the deal.  If they do not lift the tariffs, even if Canada says fine we’ll sign, Mexico is not playing right now.  So they have no real leverage for their request.

So at the end of the day, there is no deal as of yet,  even though he is still claiming on April 4, 2019 that the “China and USMCA deals are moving along nicely and are done and they will have to deal with it” and look what he did for America.  None of the countries real decision makers are happy at this point, and the tariffs that have been dolled out like playing cards have proven to be just one of the roadblocks for the completion of the deal.  I am happy to hear though, that Canada and Mexico are saying no to bullying.  Even though the countries are standing strong, there are concerns that if it is not fully completed by the summer there could be some negative economic effects.

Also, with the talks with China still looming, there does not appear to be any appetite for the Trump administration to lighten up on the tariffs which just might be part of their intimidation tactics for negotiations.  So maybe if he could stop playing golf and campaigning as he runs his unwarranted victory laps, he could actually do some work and get things done.  With his hate on for Mexico though I am not sure I believe that anything will get done by the summer.  The new president in Mexico is not a fan of the whitehouse at all, and has factories moving their from America and Canada so I can’t imagine them feeling any pressure to get things done. Even Republicans are trying to put pressure on the administration to deal with the neighboring tariffs.

There is also the bad blood between the Democrats and the bully so any burning desire for congress to move the needle is unlikely while they are working tirelessly on acquiring documentation on the Mueller report, security clearance issues and the last 6 years of tax returns from they guy they call the president. According to an excellent article in The National Interest,  another issue that has entered the realm is immigration.  No one is saying directly that the new NAFTA deal is tied to the shenanigans of the administration but if they press hard enough and close the southern border as the threat implies, there will be more damage to trade between the two countries than pulling out of the deal entirely.

At the end of the day I hope they can get things done.  I am not that hopeful though with so many conflicting factors that are some of the reasons why NAFTA is not going anywhere yet.  In some ways it would be nice if Canada could just say…. we are out, but our economies are too integrated for such a drastic move.  The good thing is that we are a part of the Trans Pacific Partnership so there are other avenues for trade and commerce…. if they could get this political war with China done.  It feels like this stuff never ends.  Especially since 2016.

About Shannon McDougall

A proud Canadian who believes in buying at home when possible.