Canada after NAFTA

Maybe it’s the West coast air, but I have found myself wanting to buy local. I buy BC fruit and veg, BC wine and beer, I avoid corporate restaurants and business as much as possible. Part of this is because in Greece we weren’t inundated with McDonalds and Starbucks, I barely recognized a single logo, it was amazing. Part of it is because NAFTA is driving me nuts, I’m less “buy Canadian” and more “buy anything but American.”

The NAFTA renegotiation has entered its fourth round of talks. And they aren’t going well. I’m no longer certain that is a bad thing though. The more I read about the negotiations, the history, and effects of NAFTA the more I think it might not be such a bad thing if NAFTA were to die an ignominious death. With the demands from the Trump administration I wonder if the negative impact from an agreement would outweigh the positive.

The US has finally started to act like a superpower, by that I mean a belligerent bully who knows that it can use force to get its way. Previously the US baffled political theory by occasionally working on building consensus. Demands and obstinacy was often reserved for rivals and enemies, apparently now allies are valid targets. Even if Canada and Mexico can remove some of  the “poison pills” of the US demands the new NAFTA will not be great for us. Because NAFTA was a compromise between three countries it has been an easy target for President Trump, because everyone had to give a little.

I keep reading about the bad effects of NAFTA for Canada, the loss of sales for vineyards and breweries, the weakening of regulations regarding the environment and worker protection (thanks to Article XI), wage suppression, US subsidized farming harmed other agriculture industries, and depending how far down the rabbit hole you go there are more. And the only real pro has been increased trade. Now I’m not naive about this, Canada relies on trade its the bedrock of our economy, but…

When ever the Canadian government defends NAFTA it’s about the auto industry, the one that we bailed out and was supposed to keep jobs in Canada. Also the one that as soon as Harper sold the government held shares of (at a significantly reduced price, thank you Harper) pulled jobs out of Canada. The auto industry isn’t doing any favours for Canada, and if President Trump has his way they will significantly be more US focused.

I keep saying Canada here but lets be honest, I mean Ontario. In BC it’s hard to see any benefit from NAFTA, hell I can expand that to the West in general probably, hell I can probably also include the Maritimes and Newfoundland in there as well, hell I could probably also include Quebec.

BC’s industries, forestry (not included in NAFTA), dairy products (protected by the government, but a new revised NAFTA would like less protection), wineries, breweries, and distilleries (nearly impossible to sell to the US because of prohibition era laws, but NAFTA fantastically opened up Canada to US companies, hurting ours). The US is the top purchaser of BC goods (by goods I don’t mean we make anything, no we send raw resources and buy finished goods, because mercantilism yeah!).

Hey how about we make things from our resources?  Let’s invest in innovation and promote creation. Let’s refine our own oil, we could ship it out east where it can create jobs in the Maritimes and boost their economy and there won’t be any of the risk of earthquakes, avalanches, shoals that there are in BC, oh wait…

As for NAFTA being tariff free? Just look at Bombardier. 300% (I’ll just let that number speak for itself). If we are already getting tariffed on our goods because we are subsidizing industries, the same way the US is, the hell with it lets subsidized more.

This whole free trade deal has gone bitter let it die, and lets look at it again in ten years under a new administration, hopefully at that time Canada can bring more weight to the table. Since NAFTA was signed Canada has negotiated many free trade agreements , perhaps its time we start using them.

 

PS. After posting this, the US demanded that Canada open up over 30% of the dairy market, 10 times the amount that was begrudgingly agreed to in the TPP. I’ve seen this before, it happened to Jamaica when they needed an IMF loan. It absolutely destroyed local industry. It’s clear that the US has started to view Canada as a tributary.

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