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Trump “Likely Terminating NAFTA”

U.S. President Donald Trump gave a long campaign-style speech to a crowd of admirers in Phoenix, Ariz., Tuesday night. In his speech, Trump touched on such issues as the “sick people” in the media, offered a defense of his reaction to violence at a white nationalist rally and most importantly said that the U.S. may end up “terminating” the North American Free Trade Agreement.

While speaking roughly of the deal, the United States trades team brought forward over 100 items for negotiation, compared to Canada’s 10. Some of these items include increasing the access of American firms to Canadian provincial contracts while reducing the access of Canadian firms to American state and federal projects.

It also includes the removal of NAFTA’s dispute resolution system, something our lumber industry relies on heavily. The list of demands continues much in the same light, more losses for Canada, more benefits for the States.

Mutual but Not Equal Incentive to Corporate

With nine million jobs in the U.S. directly linked to trade with Canada, which is the largest export customer for 30 states Canada is certainly an important trade partner to the United States, but we cannot pretend we are on equal terms. The United States trades with many other nations and at the end of the day relies on us far less.

In this situation, it is extremely likely that either the United States will leave the negotiations, or Canada will be forced to leave due to Trump’s understanding of the disproportionality of power and his zealous overuse of it. He will push the trades department to make ever more demands and in the end, it is likely that we will be left without NAFTA.

Entertain, Perplex, and Stall

Given the rather unfavourable terms of NAFTA, it is most likely that the Canadian government will try to save the deal in two ways. They will one, target those who benefit most from border trade within the United States and push them to lobby their government, hoping that American big business could protect their own interests best. While secondly pushing to stall the negotiations for as long as possible, hoping that a new administration could be sworn in before the deal is fully complete.

In either case, no NAFTA deal will be signed under the current terms.

What is your opinion on this? Comment below.

 

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