Canada’s #1 cultural export is romance.
Writing and published works are Canada’s most significant cultural exports, and Toronto-based Harlequin publishing and its famous romances lead the pack. The company publishes 110 titles per month in 34 languages, reaching 110 international markets across six continents! With half its books sold overseas and nearly 95% international sales, Canada is the source of swoons felt ’round the world.
On Friday, June 13, Laura Dawson spoke at the Council of Foreign Relations Conference in New York City on NAFTA’s past and future. Other panelists ncluded Shannon O’Neill, Edward Alden, and Robert Zoellick. It was great to hear from so many Canada-watchers and supporters of smart, open North American trade. In October, the Council is set to release a Task Force Report on North America http://www.cfr.org/projects/world/independent-task-force-on-north-america/pr1666
Have you ever heard of cabotage laws? Familiar with the term “trade infrastructure”? What are your thoughts on the implications of the U.S midterm elections for Canada? These are some of the topics that the students and interns connected to Dawson Strategic have been thinking and writing about. In place of our regular fall newsletter, we are publishing a special edition highlighting the research work of these talented young professionals.
In his article, Cabotage Reform, It’s About Time, Jonathan Punnoose, a Master’s candidate at Carleton’s Norman Patterson School of International Affairs, argues in favour of the need for reform in Canadian and U.S cabotage laws—regulations that cover the movement of foreign commercial carriers within a country.
Keeping with the Canada-U.S. focus, Jack Britton takes a look at what the 2014 midterm elections in the United States mean for Canada. Jack is an honours candidate at Mount Allison University and has worked as a Legislative Assistant in Washington, D.C. Read Jack’s article here.
Up next is Dawson Strategic’s newest intern, Justin Bedi. Justin is currently a Master of International Trade candidate at the University of Saskatchewan’s Johnson-Shoyama Graduate School of Public Policy. In his article Does Canada’s Trade Infrastructure Give It a Comparative Advantage? Justin examines the role trade infrastructure (specifically export development agencies) plays in giving Canada a competitive advantage in global trade.
Across North America, talented students are immersing themselves in international trade affairs and making a name for themselves. Dawson Strategic is grateful for the work of these young professionals.
Dawson Strategic Managing Director Jeffrey Phillips is quoted in a CBC News story on the Canadian government’s new emission reduction targets. Although Canada had previously indicated aligning its greenhouse gas emission reduction targets with the United States, it now appears Canada’s targets will diverge and ultimately be less ambitious.
Regardless, “whatever the new commitment is, we are not on track to meet the old one,” says Jeffrey Phillips, managing director of the consulting firm Dawson Strategic, who served as a senior policy adviser on energy issues in the federal department of natural resources until 2013.
Phillips says the only way to have any real reduction in greenhouse gas emissions is to drastically scale back oilsands production, and that’s not going to happen.
“So whatever the prime minister announces about emission targets, it will put us at the bottom of the pile with Japan and, probably, Australia.”
It is fair to say that in the work truck world, the annual NTEA – Association for the Work Truck Industry Work Truck Show is kind of a big deal. And once again, North America’s largest work truck event broke all records with 11,905 industry professionals in attendance. The event was held March 1-4 at the Indiana Convention Centre.
Another busy day in the main showroom
The Work Truck Show 2016 brings together truck fleet managers, dealers, equipment distributors, and other industry professionals every year to learn about the latest technologies, participate in educational sessions, and even enjoy exclusive ride-and-drive opportunities.
One of the most valuable aspects of the whole experience is the opportunity to meet directly with industry professionals to learn about the pressing issues affecting their day-to-day operations.
Connecting with the team from Pride Bodies Ltd.
While Canada and the United States have made some progress in recent years, regulatory issues and border irritants continue to hamper Canadian and U.S. businesses that move people, parts, or products across the border. Prime Minister Justin Trudeau’s historic state visit to Washington is an encouraging sign that both the Prime Minister and President Barack Obama will work to deepen long-standing strategic collaboration in key areas like the border.
By Jeffrey Phillips, Managing Director
The United States and Canada share the world’s largest and most comprehensive trading relationship, and the numbers tell it all. Each and every day, 400,000 people cross the border, along with over $2 billion worth of goods and services. Of course, the United States is more than just an important trading partner for Canada: our two countries share many common values and interests, forged together by a shared geography.
NTEA – The Association for the Work Truck Industry (NTEA) along with Dawson Strategic released a new Cross-Border Compliance Guide that was covered in an article from ConstructionEquipmentGuide.com on June 1, 2016.
NTEA represents nearly 1,800 companies that manufacture, distribute, install, sell and repair commercial trucks, truck bodies, truck equipment, trailers and accessories. Buyers of work trucks and the major commercial truck chassis manufacturers also belong to NTEA. The Association provides in-depth technical information, education, and member programs and services, and produces The Work Truck Show® and Green Truck Summit.
The Guide provides valuable information on the complexities and nuances of trade between Canada and the United States, tailored specifically to the vocational vehicle sector. Topics covered include: commercial vehicle importation and exportation, rules of origin, taxes and trade, legal risks, international treaties and conventions, customs classification and valuation, and more. “With the United States and Canada continuing to be each other’s most important trading partner, the efficient movement of commercial goods across the border is critical to both countries’ economies,” said Steve Carey, NTEA executive director.
Each and every day, 400,000 people cross the border, along with over $2 billion worth of goods and services (check out this infographic for more information). Many NTEA members in Canada and the United States move people, parts, and final products across the border on a regular basis and thus, an efficient and secure border matters to the work truck industry.
NTEA members can download the Cross-Border Compliance Guide for free. A printed copy can be purchased for $99 (member) and $239 (nonmember). To get your copy, visit ntea.com/shopntea or call 800-441-6832.
With the surprising win of Donald Trump last week, many questions have been circling about what this means for Canada and Mexico. With this in mind, Jeffrey Phillips and Anna Barrera were interviewed by Isabel Inclán of NOTIMEX to discuss where North America should go from here. According to Phillips “It is too early to know what will happen with NAFTA. We are hopeful that once the dust settles, there will be a gap between the anti-trade rhetoric of the campaign trail and the realities of day-to-day governing.”
The United States and Canada share the world’s largest and most comprehensive trading relationship, and the numbers tell it all. Each and every day, 400,000 people cross the border, along with over $2 billion worth of goods and services. Of course, the United States is more than just an important trading partner for Canada: our two countries share many common values and interests, forged together by a shared geography.
“It is important for the President-Elect to see that having a good relationship with Mexico and Canada is beneficial to all, working together on topics of climate change, commerce, and energy,” said Anna Barrera during the interview.
For more information please see the full article by Isabel Inclán in NOTIMEX available at http://www.notimex.gob.mx/ntxnota/265981
(Alex Panetta/Canadian Press)
The fact that President-Elect Donald Trump has mentioned that the Keystone XL pipeline will be approved during his administration has caused some heads to turn in Canada. Trump has promised to grant a permit to the project that would carry more than 800,000 thousand barrels of oil a day from Alberta to refineries in Texas. President Barack Obama rejected the pipeline last year. Even with this controversial promise, the revival of the pipeline is not a slam-dunk.
Jeffrey Phillips spoke with CBC’s Margo McDiarmid to discuss what the possible revival of this project would mean for Canada. “Canadians maybe can’t believe this zombie pipeline, that cannot be killed, has re-emerged again,” said Jeff during the interview. Phillips predicted Trump’s campaign promises to approve Keystone XL may come up against the reality of the controversial project. “Even if the new U.S. administration is supportive and gives its approval, there are still a lot of key steps that have to happen before that pipeline gets built.”
For more information please see the full article by Margo McDiarmid in CBC News available at: http://www.cbc.ca/news/politics/keystone-xl-trump-carr-1.3852682
By Anna Barrera (Research Associate, Dawson Strategic)
April 28, 2017
Canada and Mexico have had a strong relationship spanning more than 70 years. Their trade relationship grew with the signing of the North American Free Trade Agreement (NAFTA) in 1994 but has decreased in recent years. Within that relationship, the majority of Canada’s trade is with the United States, with $2.4 billion worth of goods and services crossing the Canada-U.S. border every day. While the United States accounts for 64 percent of Canadian overall trade, Mexico accounts for 4 percent. Canada and Mexico are each other’s third largest trading partner, with two-way merchandise trade reaching over CAD$37.8 billion in 2015. There are also a significant number of Canadian companies that have business, trade and investment ties with Mexico. How will this relationship be tested by the renegotiation of NAFTA?
NAFTA was signed as a new and innovative trade agreement, dealing with new topics such as labour, environment and dispute settlement. However, with recent discussions of wanting to renegotiate the agreement on behalf of the United States, the relationship between the three nations has grown tense and worry has settled in as to where Canada’s and Mexico’s, specifically Canada’s, alliance will lie.
Unlike with the U.S., Canada does not have a previous bilateral agreement with Mexico. This is important to consider since, if NAFTA is removed, there is no basis on how trade relations would work, or how they would move forward. Both countries would have to decide to negotiate a whole new deal, stay and follow the basic rules of NAFTA, or simply continue trading under no agreement but follow the rules established by the World Trade Organization (WTO). While the last option sounds like the worst case scenario, it is important to consider that most countries don’t have high duties on their products anymore, and products that do have a higher tax, tend to also have a higher tax even within a trade agreement.
While it might seem that Canada and Mexico would rather focus solely on their independent relation with the United States, the country that divides Canada and Mexico depends heavily on its trade with its neighbours. Mexico and Canada are the U.S. 3rd and 2nd largest goods trading partners, with US$525.1 billion in total goods trade during 2016 and US$575 billion in total goods trade during 2015, respectfully. Therefore, simply withdrawing from the NAFTA might do more harm than good for the United States, meaning that Canada and Mexico will have to stand strong and remind the U.S. of the initial intentions of signing NAFTA in 1994, which was to create a strong, united North American force that would compete together against the world.
Can we improve the coordination of how trade agreements are negotiated to better support vital bi-national supply chains like those in the Great Lakes-St. Lawrence Region? This is the key question addressed in an August 2017 Policy Options (the publication of the Institute for Research on Public Policy or IRPP) article by Mark Fisher, Jeffrey Phillips, and Jesse Schuster-Leibner.
Despite the realities of deeply intertwined supply chains that cross national borders, when it comes to international trade agreements, partner countries like Canada and the United States often “part ways and hope that things work out for the sectors most impacted.”
This article makes the case for increased coordination and cooperation between Canada, the United States, and Mexico in negotiating future trade agreements, particularly with respect to cross-border or cross-continental industries. The upcoming renegotiation of NAFTA presents an opportunity for all three North American countries to work together to find new ways of improving the performance of the commercial platforms that extend across their respective borders.
Click here to read the complete IRPP article.
August 31, 2017
There’s a lot of noise surrounding the NAFTA re-negotiations (or as Mexico and Canada like to frame it, the “modernization”). Through all the media, analysis, lobbying and politics, it is easy to get lost in the hype of it all. But what is most crucial as we head into round 1 of talks on September 1st is separating the rhetoric (largely those in political roles making loud statements) and the reality (the pieces on the negotiating table, the legal elements, and the items of interest to the business community).
RHETORIC
Let’s start with the overall agreement. The introductory round of negotiations held in Washington D.C. in mid-August started with a bang. United States Trade Representative (USTR) Robert Lighthizer was quick to go on the attack stating that this would not merely be a “tweaking” to improve NAFTA, but would be a full scale re-write. His statements contrasted with the USTR’s written objectives for NAFTA that were released in mid-July that indicated a more nuanced and conciliatory tone.
Shortly after the introductions wrapped up, President Trump took to the airwaves to state his doubt that NAFTA could be renegotiated because Canada and Mexico were being difficult. In his view, the negotiations would end in NAFTA being terminated. This fits squarely into the rhetoric side of things for so many reasons that it is more economical to list them:
On the Canadian side, there is also a fair amount of rhetoric, but it is more to do with our position on certain elements of NAFTA rather than generally degrading the agreement in its entirety or deriding one of the other parties for being unfair. There’s a lot of talk about how we won’t negotiate on dairy and we are not budging from the chapter 19 dispute settlement mechanism. While there is an element of truth to this, the rhetoric is stronger than the reality. Canada will likely negotiate at least as favourable terms as are contained in both the TPP and CETA, meaning we will be somewhat flexible on both of those items. But rhetoric is ensuring we hold our cards close to the chest.
REALITY
Now that the drum beating is dealt with, let’s move to reality. Overall, the political conditions in the United States are more favourable to the renegotiation of NAFTA. Most state level governors are keen on NAFTA and want to see a functional agreement emerge from the negotiations. Furthermore, the deeper you go into the heart of American politics, the more they seem to understand that the details of NAFTA should be worked out by the appropriate levels of government (i.e. the negotiators hired at the bureaucratic level to spend their lives doing trade agreements).
TO SUMMARIZE
In reality’s corner we have the business community and their associations, state level governors, Canada and Mexico (in terms of their willingness to negotiate). In rhetoric’s corner we have Lighthizer, Trump, and some position statements by Canada that will likely be softened to reflect reality.
Round 1 is sure to produce some made-for-journalism drama. We will try and sort the rhetoric from the reality at its conclusion to give a sense of what is being negotiated.
You can reach Noah via everydaytrade.ca
September 20, 2017
Sunset clauses, virtue signaling, warp speed and right-to-work. Since Round 2 of NAFTA 2.0 negotiations wrapped up, these words have been bandied about in press briefings, news articles and interviews. Needless to say, there remains an incessant amount of speculation and rhetoric about what’s happening at the bargaining table. Although the outcome is still foggy, the good news is that the rhetoric is slowly easing, while the realities of a negotiation are beginning to set in. In anticipation for Round 3 which begins on September 23rd in Ottawa, let’s break down some of the areas that have received the bulk of the media’s attention.
ENVIRONMENT
A lot of rhetoric has been circulated domestically on the idea of including the environment in NAFTA. Some have disparaged it as “virtue signaling” and some have said that “social issues” should remain out of NAFTA – but the environment is a tricky little nugget.
The current NAFTA contains a side agreement on the environment, and is one of the reasons Brian Mulroney is often considered Canada’s greenest Prime Minister. Interestingly, both Canada and the U.S. want to bring the environment into the actual NAFTA text, perhaps as its own stand-alone chapter.
For Canada, the interest lies in preventing a “race to the bottom” – the progressive lowering of standards to attract investment, resulting in increased levels of pollution. While Canada is wary of the U.S., the U.S. is also wary of Mexico jumping onboard the race to the bottom. This indicates some of the U.S. interest in creating a more level playing field in NAFTA.
While the U.S. administration is not viewed as environmentally friendly, the fabric of the country is difficult to navigate on this issue. Many emissions and environmental standards are set at state level and some states such as California are more environmentally conscious than any Canadian jurisdiction. The President essentially has his hands tied to some extent, so it may be better to see something included in NAFTA on the environment, rather than leaving it to all the other unknowns.
For Canada, the environment presents an opportunity for the government to spin rhetoric and show their credentials as greens, but it’s also a somewhat realistic position and something that is being negotiated. For the U.S., on the other hand, you won’t hear the words “climate change” and while they may not make a big fuss publicly about an environment chapter, but they will be negotiating one.
RULES OF ORIGIN (THEY TOOK OUR JOBS!)
A second theme that came out of Round 2 was the U.S. demand for “domestic content requirements” for the automotive sector. To put it plainly, the U.S. wants a certain quantity of a car’s parts to be made in America. The issue with this is it serves as a shift from the existing requirement that a quantity of car parts are to be made in NAFTA countries (i.e. Canada, the U.S. or Mexico). How will a new U.S. requirement affect the industries in Canada and Mexico?
The rhetoric around this one is clear: “They took our jobs!” However, the reality is much more uncertain. There is likely a middle ground that Canada and Mexico could agree to, but they must be vigilant not to undermine their respective domestic automotive sectors which largely rely on the benefits provided by the current NAFTA to stay afloat.
SUNSET CLAUSE (EXPIRY DATE)
A sunset clause is essentially an expiry date for a piece of legislation. It must either be renewed at such date or it is no longer in force. The U.S. frequently uses sunset clauses in domestic legislation. Canada and Mexico on the other hand do not.
This one seems to fit squarely in the U.S. rhetoric side of things. It is highly unlikely that Canada or Mexico would accept it and it sounds more like pandering to sentiment by creating the possibility of getting out of a “bad deal”. The reality is NAFTA already contains a mechanism for any party to withdraw from the agreement. Why add uncertainty for the business community by potentially opening this up to debate every few years?
GOING FORWARD
The rhetoric has been toned down since Round 1 and it looks as if the negotiators are slowly taking over ownership of this file. There is still a lot of noise out there, and that will likely continue as the negotiation deals with some of the more contentious issues down the road. For now, everyone seems content to get the easy stuff out of the way and make platitude statements about how all three sides are negotiating together.
Once Round 3 wraps up, we’ll turn our attention to some of the other difficult issues such as dairy and labour standards. We may even discuss the ramifications of Amazons HQ2 on the negotiations. Until then, enjoy the headlines as they roll out.
You can reach Noah via everydaytrade.ca
October 10, 2017
By Noah Arshinoff and Samukele Ncube
If round 3 of the NAFTA re-negotiation was trying to emulate the undeserved sleepy reputation of its host city (Ottawa), it succeeded. Most contentious issues remain in the realm of political speaking points and have yet to hit the reality of the negotiating table. Politicians rather than negotiators continue to dominate the headlines on the topics of labour standards, dispute resolution and trade deficits. As round 4 heads back to Washington, it seems the United States is waiting until they are on home turf before tabling their proposals on these issues. In the meantime, we can still sift through the rhetoric in anticipation of the realities.
LABOUR
Canada is pushing for more progressive labour standards, particularly aimed at working conditions for labourers in Mexico and “right to work” jurisdictions in the United States. Canada has stated that Mexico should do away with particular unions that favour and focus on the interests of employers over employees. Canada and the U.S are also concerned about the exodus of investment and quality jobs attracted by low wages in Mexico. The U.S. held off on tabling a proposed text addressing labour standards, seemingly due to some internal squabbling about its content. Interestingly, the Democrats signaled support for Canada’s position vis-à-vis Mexico. However, Canada’s rhetoric around dismantling “right-to-work” may be just that: a ploy to ensure it can concede something and back off on its demands if the three partners agree to a balanced agreement.
CHAPTER 19 DISPUTE RESOLUTION
Chapter 19 details a dispute-resolution mechanism that allows independent, binational panels to review anti-dumping and countervailing duty cases, rather than having judicial reviews done by domestic courts (it is separate and distinct from the Chapter 11 investor-state dispute settlement mechanism).
The U.S. has had long-standing issues with Chapter 19, partly due to its unfavourable rulings on softwood lumber. The U.S. has also previously stated that it violates national sovereignty.
Well…they say timing is everything. Just as this chapter inches closer to the reality stage of the negotiations, a U.S trade panel imposed hefty duties on Canadian jet manufacturer Bombardier. Their U.S competitor Boeing accused Canada of unfairly subsidizing Bombardier’s CSeries jets. The U.S trade panel’s decision sheds light on why this chapter is important to Canada and why they do not want to subject international disputes to domestic courts. While the U.S has been rather bombastic about their dislike for this chapter, we will have to wait to see what gets tabled to get a full picture of how this may play out in the negotiating room and whether Canada has any wiggle room.
TRADE DEFICITS
“Trade deficits are bad.” This blatant rhetoric coming out of the U.S doesn’t tell the whole picture of trade (or even part of it), yet it has been the cornerstone to the President claiming that NAFTA is the “worst trade deal in history”. However, the reality behind this rhetoric is that NAFTA has, in fact, increased trade among all three countries – quadrupling trade between Canada, the U.S and Mexico since its inception in 1994.
Where rhetoric and reality differ on this front, however, is further being muddled. The U.S is looking to tie the trade deficit to a sunset clause, giving the U.S. the ability to decide – based on assessments of their trade deficits with Canada and Mexico – whether or not to withdraw from the deal after five years. Whether anything of this nature comes to fruition is doubtful, especially since it would undermine the intent of a trade agreement and mainly be supported by faulty and misplaced reasoning.
WHAT’S NEXT?
Expect text on dairy, rules of origin, and possibly labour standards to be tabled by the U.S in Round 4. Although the negotiations resume in Washington D.C. on October 11th, the slow pace so far has not been met with optimism that a deal can be signed in the aggressive timelines sought by the parties.
You can reach Noah via everydaytrade.ca and Sam via LinkedIn
November 17, 2017
The tone of negotiations has soured since the last instalment of this blog series. The NAFTA negotiations are now being dominated by talk of “poison pills” and a potential end to the agreement being nigh. The United States tabled a list of “poison pills” (positions so untenable there is no hope of negotiating them into the deal) during the last round of negotiations in Washington, including: reductions in government procurement access; a sunset clause that would kill NAFTA based on U.S. trade deficit triggers; automotive rules of origin; and a dispute settlement system that allows participants to opt out at will. Since then, the United States has accused Canada and Mexico of not wanting a fair deal, and Canada and Mexico have accused them of deliberately trying to sabotage NAFTA. The rhetoric from all sides remains rampant, but the reality got a little foggier.
Doom and Gloom
While the threat of NAFTA being doomed has become more real, the parties have also signaled their willingness to stay at the negotiating table by extending the timeline for talks into 2018. Although this extension may seem like a goodwill gesture, it is also meant to add some oxygen to the negotiations by spreading out the negotiating rounds and allowing each party additional time to develop their positions and responses.
Canada staying at the table
For its part, Canada has stated that they will remain at the negotiating table. At the same time, it is become clearer that Canada would rather the deal die than to take a bad deal. Staying at the table makes sense on numerous fronts for Canada. It puts the ball in the United States’ court to withdraw. If they don’t, negotiations continue. If they do trigger their withdrawal, it remains very unclear how exactly that would work under the U.S political system. There is a very real chance that Congress stalls a U.S withdrawal through a possible standoff with the President. Questions remain whether the President even has the ability to unilaterally withdraw or whether he requires the support of Congress. In either case, while withdrawal is debated in the U.S. political system, the current NAFTA would remain in force, something Canada is perfectly comfortable with. Therefore, staying at the table is a solid strategy for Canada.
The TPP Effect
The revival of the Trans-Pacific Partnership (TPP) has also made headlines recently, albeit now with 11 members (TPP-11) since the withdrawal of the United States. However, the United States continues to push for matters that were in the original TPP to be included in a modernized NAFTA. Canada and Mexico have stated that if the United States had wanted the TPP, they could have stayed in. A tri-lateral NAFTA should consider the relationship of only its three partners. It will be interesting to see how the TPP-11 continues to influence Canada’s position vis-à-vis the NAFTA negotiations as we move forward.
The Path Forward
Baby steps. Those poison pills will remain on the backburner for now while the parties try and work out some less contentious issues. It remains to be seen whether the United States will continue to signal that the agreement cannot be salvaged, or if Round 5 will be able to right the ship.
You can reach Noah via everydaytrade.ca
The United States and Canada share the world’s largest and most comprehensive trading relationship, and the numbers tell it all. Each and every day, 400,000 people cross the border, along with over $2 billion worth of goods and services. Of course, the United States is more than just an important trading partner for Canada: our two countries share many common values and interests, forged together by a shared geography.
NTEA – The Association for the Work Truck Industry (NTEA) along with Dawson Strategic released a new Cross-Border Compliance Guide that was covered in an article from ConstructionEquipmentGuide.com on June 1, 2016.
NTEA represents nearly 1,800 companies that manufacture, distribute, install, sell and repair commercial trucks, truck bodies, truck equipment, trailers and accessories. Buyers of work trucks and the major commercial truck chassis manufacturers also belong to NTEA. The Association provides in-depth technical information, education, and member programs and services, and produces The Work Truck Show® and Green Truck Summit.
The Guide provides valuable information on the complexities and nuances of trade between Canada and the United States, tailored specifically to the vocational vehicle sector. Topics covered include: commercial vehicle importation and exportation, rules of origin, taxes and trade, legal risks, international treaties and conventions, customs classification and valuation, and more. “With the United States and Canada continuing to be each other’s most important trading partner, the efficient movement of commercial goods across the border is critical to both countries’ economies,” said Steve Carey, NTEA executive director.
Each and every day, 400,000 people cross the border, along with over $2 billion worth of goods and services (check out this infographic for more information). Many NTEA members in Canada and the United States move people, parts, and final products across the border on a regular basis and thus, an efficient and secure border matters to the work truck industry.
NTEA members can download the Cross-Border Compliance Guide for free. A printed copy can be purchased for $99 (member) and $239 (nonmember). To get your copy, visit ntea.com/shopntea or call 800-441-6832.
With the surprising win of Donald Trump last week, many questions have been circling about what this means for Canada and Mexico. With this in mind, Jeffrey Phillips and Anna Barrera were interviewed by Isabel Inclán of NOTIMEX to discuss where North America should go from here. According to Phillips “It is too early to know what will happen with NAFTA. We are hopeful that once the dust settles, there will be a gap between the anti-trade rhetoric of the campaign trail and the realities of day-to-day governing.”
The United States and Canada share the world’s largest and most comprehensive trading relationship, and the numbers tell it all. Each and every day, 400,000 people cross the border, along with over $2 billion worth of goods and services. Of course, the United States is more than just an important trading partner for Canada: our two countries share many common values and interests, forged together by a shared geography.
“It is important for the President-Elect to see that having a good relationship with Mexico and Canada is beneficial to all, working together on topics of climate change, commerce, and energy,” said Anna Barrera during the interview.
For more information please see the full article by Isabel Inclán in NOTIMEX available at http://www.notimex.gob.mx/ntxnota/265981
(Alex Panetta/Canadian Press)
The fact that President-Elect Donald Trump has mentioned that the Keystone XL pipeline will be approved during his administration has caused some heads to turn in Canada. Trump has promised to grant a permit to the project that would carry more than 800,000 thousand barrels of oil a day from Alberta to refineries in Texas. President Barack Obama rejected the pipeline last year. Even with this controversial promise, the revival of the pipeline is not a slam-dunk.
Jeffrey Phillips spoke with CBC’s Margo McDiarmid to discuss what the possible revival of this project would mean for Canada. “Canadians maybe can’t believe this zombie pipeline, that cannot be killed, has re-emerged again,” said Jeff during the interview. Phillips predicted Trump’s campaign promises to approve Keystone XL may come up against the reality of the controversial project. “Even if the new U.S. administration is supportive and gives its approval, there are still a lot of key steps that have to happen before that pipeline gets built.”
For more information please see the full article by Margo McDiarmid in CBC News available at: http://www.cbc.ca/news/politics/keystone-xl-trump-carr-1.3852682
By Anna Barrera (Research Associate, Dawson Strategic)
April 28, 2017
Canada and Mexico have had a strong relationship spanning more than 70 years. Their trade relationship grew with the signing of the North American Free Trade Agreement (NAFTA) in 1994 but has decreased in recent years. Within that relationship, the majority of Canada’s trade is with the United States, with $2.4 billion worth of goods and services crossing the Canada-U.S. border every day. While the United States accounts for 64 percent of Canadian overall trade, Mexico accounts for 4 percent. Canada and Mexico are each other’s third largest trading partner, with two-way merchandise trade reaching over CAD$37.8 billion in 2015. There are also a significant number of Canadian companies that have business, trade and investment ties with Mexico. How will this relationship be tested by the renegotiation of NAFTA?
NAFTA was signed as a new and innovative trade agreement, dealing with new topics such as labour, environment and dispute settlement. However, with recent discussions of wanting to renegotiate the agreement on behalf of the United States, the relationship between the three nations has grown tense and worry has settled in as to where Canada’s and Mexico’s, specifically Canada’s, alliance will lie.
Unlike with the U.S., Canada does not have a previous bilateral agreement with Mexico. This is important to consider since, if NAFTA is removed, there is no basis on how trade relations would work, or how they would move forward. Both countries would have to decide to negotiate a whole new deal, stay and follow the basic rules of NAFTA, or simply continue trading under no agreement but follow the rules established by the World Trade Organization (WTO). While the last option sounds like the worst case scenario, it is important to consider that most countries don’t have high duties on their products anymore, and products that do have a higher tax, tend to also have a higher tax even within a trade agreement.
While it might seem that Canada and Mexico would rather focus solely on their independent relation with the United States, the country that divides Canada and Mexico depends heavily on its trade with its neighbours. Mexico and Canada are the U.S. 3rd and 2nd largest goods trading partners, with US$525.1 billion in total goods trade during 2016 and US$575 billion in total goods trade during 2015, respectfully. Therefore, simply withdrawing from the NAFTA might do more harm than good for the United States, meaning that Canada and Mexico will have to stand strong and remind the U.S. of the initial intentions of signing NAFTA in 1994, which was to create a strong, united North American force that would compete together against the world.
