Daily Archives: October 2, 2018

Trade agreements between nations – even nations run by thoughtful, experienced leaders – are inevitably born of compromises between competing political agendas. …Now imagine how much more difficult it is to cut a deal when one of the national leaders involved is unpredictable, temperamental and often uninformed. Seen in that light, the trade pact Canada has reached with the United States feels like something of an economic miracle. The accord has its flaws, and as Prime Minister Justin Trudeau cautioned on Monday, it also must still be ratified by all three countries. Still, after 19 months of brutal negotiations, an agreement in principle exists to keep supporting free exchange in a regional market worth $25 trillion and representing 470 million people. …On Monday, free-trade veteran Brian Mulroney… called the new agreement “a highly significant achievement” for Canada. It is. Bravo.

Canada joined the U.S. and Mexico Monday in a revised trade agreement to replace the North American Free Trade Agreement, and stocks rallied in relief. The new deal’s main virtue is that it stows one of Donald Trump’s main protectionist wrecking balls, even if the new Nafta is worse for trade and economic growth than the status quo. …But the new deal is more relief than vindication, as the nearby chart shows. Stocks are only now reaching their heights from January before Mr. Trump began picking trade fights willy-nilly around the world. …Canada’s inclusion is especially crucial, and the last-minute compromise a step forward. The big gain for U.S. farmers… In return, the Trump Administration wisely agreed to preserve Nafta’s Chapter 19 and 20 dispute-settlement mechanisms. …This is vital to Canada to avoid America’s many protectionist business lobbies that use other U.S. laws to punish competition from imports such as lumber. [full story available with digital subscription only]

The North American Free Trade Agreement is a nearly 25-year-old agreement that needs to be modernized. …Instead, President Trump has proposed replacing Nafta with something worse, a vague agreement that could hurt American workers and raise prices for American consumers while antagonizing America’s neighbors. …In the Trumpian worldview, Canada isn’t a friendly neighbor but a frosty enemy bent on ruining our steel, auto and dairy industries while cutting down forests in British Columbia and trucking the lumber across the border. Fiends! …Mr. Trump also wants Canada to join Mexico in agreeing to drop Chapter 19 of Nafta, a dispute resolution protocol. Canada has used it to fight off tariffs on its softwood and paper products. Mr. Trump’s softwood and paper tariffs are hurting Canadian industry, but also are raising lumber prices in the United States so much that the housing market has slowed. Isn’t that a great deal?

Forest Products Association of Canada (FPAC) applauds the Canadian government and, in particular, the efforts Foreign Affairs Minister Chrystia Freeland, Ambassador David MacNaughton, and the Canadian negotiating team, on reaching an agreement with the United States and Mexico, to modernize the North American Free Trade Agreement (NAFTA), now called the United States-Mexico-Canada Agreement (USMCA). “The USMCA will ensure certainty and improved trade stability among all three countries,” says FPAC CEO Derek Nighbor. “FPAC is specifically pleased with the outcome of maintaining the existing Dispute Settlement Mechanism as this allows all industries in the 3 countries to challenge discriminatory trade actions.” FPAC believes that the conclusion of this 13-month negotiation is a great first step to improve Canada’s competitiveness in the world and looks forward to now working with the federal government on implementation of measures outlined in the recently tabled Economic Strategy Tables to address remaining competitiveness challenges.

Chrystia Freeland

Unrestricted trade. It’s written into the title of the North American Free Trade Agreement. But as details of the newly renegotiated deal (the United States-Mexico-Canada Agreement or USMCA) emerge, questions remain about what Canada’s signature guarantees in terms of protections, and what concessions were made. …Chapter 19, the section of NAFTA that allows companies to request arbitration if they feel their products have been unfairly hit with anti-dumping or countervailing duties…Canada claimed that win. …That particular red line for Canada has a history rooted in lumber exports. In the early 2000s, lumber exporters took their case to a NAFTA panel, and won. However, the U.S. didn’t want to comply with the ruling and Canada eventually negotiated a settlement that didn’t refund all the industry’s money. …”We need to keep the Chapter 19 dispute resolution because that ensures that the rules are actually followed,” Trudeau said at the beginning of September.

Vancouver, B.C. – The BC Lumber Trade Council issued a statement today with respect to Canada and the U.S. concluding the United States-Mexico-Canada Agreement [USMCA]. “BC lumber producers congratulate Minister Chrystia Freeland and the Government of Canada on reaching a renewed trade agreement that preserves the dispute resolution mechanism previously contained in Chapter 19 of NAFTA,” said Susan Yurkovich, President of the BC Lumber Trade Council. “Chapter 10 of the new agreement maintains, for Canada and the U.S only, a binational panel review mechanism for reviewing anti-dumping and countervailing duty determinations by either country,” added Yurkovich. “Having a robust and fair dispute resolution mechanism is absolutely critical to maintaining a rules-based trading system and providing an avenue for Canada and Canadian companies to appeal unwarranted duties.” While achieving a renewed trade agreement is a major step forward, the ongoing softwood lumber remains unresolved.

Justin Trudeau

OTTAWA — Canada gave up some access to its dairy, egg and poultry industries but will keep its agricultural supply management system and avoid punishing auto tariffs under the new North American trade deal. Prime Minister Justin Trudeau hailed the landmark agreement as a win for everyone and U.S. President Donald Trump did a victory lap at the White House as industries across Canada took stock of the new era in continental trade. …The deal does not, however, address the removal of the steel and aluminum tariffs Trump slapped on Canada last spring or the softwood lumber tariffs imposed in 2017. U.S. Commerce Secretary Wilbur Ross said Monday there is no timeline for removing those tariffs. Trump said the tariffs he has imposed — or threatened to levy — may be a key reason he landed an agreement after months of agonizing talks. “Without tariffs, we wouldn’t be talking about a deal.”