Talking Trade

When you get thrown under the bus, your first priority is to avoid the wheels. Once you have done that, you figure out your next move.

These days Canada’s Prime Minister is doing his best to not get hit by the wheels. Last Monday the US and Mexico announced a trade deal to replace NAFTA, the North American Free Trade Agreement. When negotiations started, at US President Trump’s insistence, Canada and Mexico assured each other that they would present a united front in negotiations with what was perceived as an American bully. Instead the Mexicans cut their own deal, and Trump told Canada it had until last Friday to sign on. At the same time media reported him stating there would be no negotiating, that Canada had to take the deal or leave it.

Politicians have long memories when it comes to betrayal. I think the Mexicans will come to regret breaking their promise and their decision to make a deal without Canada. As for Trump, the Friday deadline came with no Canadian deal, though negotiations are continuing today.

Donald Trump is a famous deal maker, at least in his own mind. He has stated he is not looking for a win-win deal with his trading partners, an agreement that would benefit all three countries. As far as he is concerned, only the US is allowed to benefit from his trade agreements. He has a list of American demands and there will be no negotiation. That must annoy the professionals who are actually working on the deal – they know international trade is a matter of give and take.

The biggest sticking point for Canada is the dispute resolution mechanism. The existing deal has one, an independent panel. Trump doesn’t want that. Too much chance the US would lose any adjudications.

Given his attitude, why would anyone sign a trade deal with Donald Trump without a provision for dispute resolution? As a Canadian, it appears to me that the Americans frequently violate our existing trade agreements. (An American might have the opposite opinion.) Countries are better served when there is an alternative to war as a disputes resolution mechanism.

Quite frankly, I wouldn’t trust Donald Trump to live up to any agreement he signed. His personal track record, as a husband, a businessman, and as an entertainer is just too spotty. Which is sad – the American president’s word used to be his country’s bond. Now his tweets are his country’s embarrassment.

The Mexicans may have thrown Canada under the bus on NAFTA, but in doing so they may have done the Prime Minister a big favour. Normally failing to make a trade deal with the US would come with huge political fallout. If today’s talks fail, Canadians will rally around their leader, proud of him for standing up to the bully.

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