The Death of the North American Free Trade Agreement

The Death of the North American Free Trade Agreement by Maj (ret'd) CORNELIU. CHISU, CD, PMSC, FEC, CET, P. Eng. Former Member of Parliament Pickering-Scarborough East After a series of threats, delays and plenty of territorial trolling thrown in for good measure, President Donald Trump made good on his promised tariffs targeting Canada and Mexico. It is a historic moment that should be understood as the end of NAFTA or now CUSMA, if not yet in law, certainly in practice. As the tariff war heats up, Canada seems quite unprepared to deal with it. Coordination is needed at the national level, but is yet to be seen. Following their recent victory in the Ontario provincial election, the incumbent Conservatives, are hell bent on escalating the tariff war rather than calming things down through negotiations. Acting with feisty bravado, Premier Ford vows to retaliate against the United States issued tariffs with a smile on his face, as he said recently. Certainly, he will need more than a smile to deal with this serious tariffs trade war, which is only just beginning. On the Federal side, we have a care taking Prime Minister who is about to resign in days, making way for an incoming Prime Minister, yet to be sworn in. The House of Commons is prorogued until 24th of March and in the current situation in Canada, a federal election is imminent. With all these events in place, Canada is in a weak position to take action on the seemingly daily tariff threats bombarding us from the United States. Canada’s economy is not in good enough shape to deal with a trade war efficiently. So we need to have strong, effective leadership in place sooner rather than later, to deal with this very serious situation. Considering Canada’s trade relations with other major economic partners that might be of help during these difficult times with the United States, we realize that we are in a very challenging position. Canada’s relations with China are tense. China has brought down another hammer on many Canadian farm and seafood exports, hitting them with a “double trade war” that industry leaders say will slam Canadian producers. Last year, Canada matched U.S. tariffs against Chinese imports, imposing 100 per cent tariffs on Chinese electric vehicles, and 25 per cent tariffs on Chinese steel and aluminum imports. When the tariffs on China were announced at a cabinet retreat, the Trudeau government made clear it was moving in lockstep with the Americans against Chinese “overcapacity.” Beijing responded several months later, announcing recently that it will levy a 100 per cent tariff on more than $1 billion worth of Canadian canola oil, meal and pea imports, and a 25 per cent duty on $1.6 billion worth of Canadian aquatic products and pork. The escalation in the tariff war with China is not a good idea, especially since the tariffs imposed on China were an attempt to curry a favour with the United States. And how did that work out for us? The United States and President Trump has been completely indifferent to Canada’s policy towards China, and in fact, he does not seem to have any intention of treating Canada better than China. In fact, President Trump is coming after Canada far more aggressively than he is going against China. Looking at our relations with another economic partner, India, Canada is not in an enviable position there, either. As to the rest of the world, Canadian relations with the European Union are good, but that is hardly helpful. The European Union is also in a difficult economic situation due to the turmoil in Europe and lack of access to cheap energy to prop up their industry. Considering all these factors, we must see that Canada is not in a very good situation. Only a strong and dedicated leadership will be able to take the country out of this mess. With the increased pressure from the South of the border, we are seeing an interesting trend towards unity in Canada and more of a need to recognize Canadian identity and nationalism. In addition, the ivory tower in Ottawa is starting to crumble in the face of this new reality, and the need to look for somebody who is able to challenge the trade salvos from the United States is abundantly clear. The recent Liberal party leadership contest results seem to put Mark Carney forward. He seems to have the qualifications, tools and preparation for such a task if used properly. Despite the disaster created by the previous leader of the Liberal party, Prime Minister Trudeau, the fortunes of the party seem to be on the rise. By now they are basically tied in the polls with the Conservative Party of Canada, the loyal opposition. In order to succeed in the next election, the Conservative Party of Canada, which had a commanding lead just a couple of weeks ago, must come up with new ideas. It will soon become evident whether the Conservative Party, under the leadership of Pierre Poilievre and his advisors, will be able to adjust to this new dynamic reality. Let us hope that they will regroup, and come up with new ideas to strengthen the nation and bring new hope for a Canada strong and free. It is high time they abandoned the worn and beaten to death old slogan of “carbon tax” from the Harper era. These issues are rapidly evolving, and the coming days will be interesting to watch. The dynamic changes are astounding. A new era is about to begin. Time to get excited and get involved, don’t you think?