In the untested terrain of a renegotiating the North American Free Trade Agreement (NAFTA) with President Donald Trump, Canada has fewer bargaining chips than trade partner Mexico, the Natonal Post reports.
At a Tuesday trade event in Ottawa organized by the Canadian Global Affairs Institute, analysts said the renegotiation talks might require years — if Trump doesn’t pull the plug in the process, as he has suggested of late — and Canada has very little trade ammunition in its arsenal that wouldn’t hurt itself more than the U.S.
Canadian Prime Minister Justin Trudeau claims that it was his phone call with Trump late last week that reignited the president’s commitment to give NAFTA one last try.
Laura Dawson, who is the director of the Wilson Center’s Canadian Institute said Trump’s desire to renegotiate NAFTA changes with the weather and no one really understands what he meant when he told Trudeau at their Washington meeting earlier this year that the president merely wants to “tweak” the trade agreement.
Moreover, Mexico can deliver a direct hit in any trade war by merely placing a huge tariff on corn, a potential phenomenon that Lawson says is a source of huge concern to American agriculture.
Canada, Lawson says, “has no nuclear option” and any trade mechanism that it might use against the U.S. would “hurt Canada much, much more,” putting Canadians in a “defensive” position.
She claims “clever lobbyists” are attuned to confidential information that suggests the Trans-Pacific Partnership (Trump’s other “worst deal in history”) might affect how NAFTA is reintroduced to Americans.
Dawson’s “biggest fear” is that Trump voters will not be satisfied with the result because she contends “Trump is not going to get what he wants.” That could lead to “more extreme and radical positions” in the Canada-US partnership.
Ian Brodie was chief of staff to previous Canadian prime minister Stephen Harper, who spent much of his last four years in office negotiating trade deals around the world. Brodie told the National Post that it has not been clear from day one of his presidency just what Trump really plans to do about NAFTA.
He wonders if any at Global Affairs Canada is really preparing to work from the basis of NAFTA being the worst trade deal in history as Trump consistently reiterates. But more importantly, “Can we come to a trade agreement that is actually permanent?”