Late Sunday eve, ye modern-day Paul (or Paula?) Revere took thy faithful steed through th’ cobblestone road of Ottawa’s dark ’n’ gloomy Byward Market. A glorious message was spread o’er hill ’n’ dale, rising to the heavens above, “The Canadians are coming! The Canadians are coming! And we saved NAFTA, eh?”
It’s done, ladies and gentlemen. At long last, it’s done. Can I get a hallelujah?
Let’s go through this scenario and try to figure out where things stand.
NAFTA, or the North American Free Trade Agreement, is no more. In its place is the USMCA, or United States Marine Corps Agreement.
Oh, I’m sorry. Make that the United States-Mexico-Canada Agreement. Silly me!
All kidding aside, the USMCA includes some important revisions to trade relations between Canada and the U.S., which will be aligned with the recent U.S.-Mexico bilateral agreement.
First, American farmers will have greater market access to Canada’s restrictive dairy industry. This will come out to roughly 3.6 per cent in total. At the same time, Canada’s “Class 7” pricing strategy will finally be dismantled.
Alas, the state-oriented principle of supply management, the bane of existence for politicians like U.S. President Donald Trump and People’s Party of Canada Leader Maxime Bernier, wasn’t eliminated. Nevertheless, it’s an important crack in the door to help lower dairy prices and increase market choice.
Second, Canada was able to maintain Chapter 19 of the old NAFTA in the new USMCA. That’s the dispute resolution mechanism the federal Liberal government was clinging to for dear life to ensure they could fight any unfair anti-dumping and/or countervailing duties.
Why? It’s not a bad mechanism to have in place in any major or minor trade agreement to ensure disputes between countries are properly mitigated and resolved. Plus, Prime Minister Justin Trudeau’s concern that Trump “doesn’t always follow the rules,” in his words, was aired out in public during the renegotiation process.
Third, the tariff war between our two nations is closer to an end.
U.S. threats of a 20 to 25 per cent tariff on auto parts, which would have crippled our economy for a lengthy period of time, have dissipated. (If Trump proceeds with an international worldwide 232 tariffs on autos, Canada will still be a part of it.) As for the U.S.’s tariffs on steel and aluminum products, and Canada’s regime of $16.6 billion counter-tariffs on a laundry list of U.S. products, it’s fair to assume they’ll all be removed before long.
Is this a perfect trade agreement for Canada?
Is this a perfect trade agreement for the U.S.?
But the USMCA, or new NAFTA if you like, is good enough for all three countries. Once it’s been ratified through the respective governments, there will peace in the valley once more.
There are some intangibles that are impossible to ignore, however.
Was it really necessary for Trudeau to propose some ridiculous, non-trade-related chapters to NAFTA on gender rights and Indigenous rights that didn’t have a hope in hell of making it to the final draft?
Couldn’t Trump have found different ways to blast the Canadian government instead of relying on Section 232 tariffs, threatening the auto sector, and using Twitter to provide virtual kicks to our country’s backside?
And besides, since these weren’t radical or revolutionary modifications to the old NAFTA, why couldn’t Canadian and American trade representatives and government officials have reached this exact type of an agreement weeks ago?
It’s easy to nitpick, of course. These issues will gradually fade into the distance, leaving historians, commentators and pundits to mull over them from here to eternity.
The most important thing is the U.S., Canada and Mexico are back on the same free trade page. We’ll be able to continue to compete properly in the global marketplace, and with each other.
If that’s not a win-win-win strategy, I don’t know what is.
Troy Media columnist and political commentator Michael Taube was a speechwriter for former prime minister Stephen Harper.