Going Global: USMCA or “NAFTA 2” is a win-win-win
Not much has changed, but that alone is something to celebrate
During a late night session some weeks ago, Minister of Foreign Affairs Chrystia Freeland and Prime Minister Justin Trudeau walked outside of an old, wooden-doored building in the middle of the night. Reporters tried to chat with the PM, but all he had to say was that it’s a “good day for Canada.”
Though the North American Free Trade Agreement wasn’t actually saved, it feels like nothing short of a miracle that, ultimately, it was only slightly tweaked.
Unless you’re part of the dairy lobby, the deal is fairly good for Canadians. If the U.S. had stuck with the Trans-Pacific Partnership, they would have gotten access to 3.25 per cent of our dairy market, and in this deal, they get 3.6 per cent. The rest of us get some more duty-free leniency, a temporary bump in our currency value, and the satisfaction of averting an economic crisis.
On a more frustrating note, the steel and aluminium tariffs are still in force, and a 16-year sunset clause which Canada was entirely against is part of the deal. On top of that, and perhaps more worryingly, is Article 32.10, which says that any country that wishes to trade with a “non-market” economy—such as China according to the WTO—needs to give three months’ notice. While the impacts of this clause haven’t been made entirely clear, a worst-case read of it could be a sign-off of our sovereignty.
For now, the Liberals get to say that they’ve kept us out of trouble, and that they worked across party lines to do so, since Rona Ambrose and Brian Mulroney were involved in negotiations. The Conservatives have a weaker attack line, considering that their tactics might have involved capitulation, and the NDP should hopefully rest easy knowing that automakers must pay their workers $16 per hour in all three countries.
On that note, many argue that Trudeau is putting too much attention on social issues, such as worker’s, women’s, and LGBTQ+ rights. This might be a fair point when it comes to China, due to their staunch attitude towards anyone critical of their internal affairs, but in other cases, it’s a practical way of levelling the playing field. If the law requires you to pay your workers a high wage, give them safety equipment, treat them well, and so on, you have an economic disadvantage against someone who doesn’t need to do the same.
In the U.S., Trump gets to claim a trade victory, even though the deal can only be described as a series of minor tweaks at the cost of saying mean stuff about our negotiators, laying down tariffs, and starving the WTO of judges. While NAFTA certainly wasn’t “the worst trade deal in history” as Trump might have claimed, it wasn’t an act of sacrilege to update it.
Since 1994, trade between the U.S. and Canada has tripled, and the nature of what we trade and how we conduct business has changed. The booming tech industry has demanded an update to the way we treat intellectual property, and the way people shop online.
However, it’s still hard to say how this will affect the States’ ability to negotiate trade. Even after Trump, it will be difficult for other countries to adjust to what appears to be, on the outside, a standard of negotiating in bad faith.
