Trying to keep up with NAFTA negotiations can feel like a full-time job, especially as negotiations with Canada continues. As of this morning, it was reported that a “handshake deal” is hoping to be reached on the North American Free Trade Agreement (NAFTA) by September 30th. The speeding up of negotiations is due to the fact the new president of Mexico will be taking office soon and also pressure over a trade war with China still looms, reports Bloomberg.
Canada Pumps the Brakes
U.S. President Trump has threatened to leave Canada out of the trilateral deal by moving forward with a bilateral agreement already negotiated with Mexico. This threat has not been taken lightly be American businesses and government officials who do not want a Canada-free NAFTA. Former U.S Treasury official Mark Sobel told Bloomberg, “Canada’s the main trading partner for many states, quite a bit of our economic fortune’s are intertwined with Canada.”
“Slow and Steady Wins the Race”
It turns out the U.S. isn’t a fan of the timeless idiom, “Slow and steady wins the race.” Although, Canadian Prime Minister Justin Trudeau is. He stated, “Every time we get momentum, every time we work together, we do knock off a few more things and move closer.” The aforementioned report continued that dairy, anti-dumping dispute panels, an exemption for cultural sectors, and the dissolution dispute panels remain at the forefront of the discussion.
The discourse over dairy has received a fair amount of attention due to its belief to be violating free trade with tariffs over 200% on imports that exceed the limit put in place by the Canadian government. Also, Trudeau is worried about another sector could be wiped out if all sanctions off the table- Canadian TV and radio. Cultural industries are a part of the proposal that has not been touched on profoundly. With the U.S being home to the entertainment capital of the world, they believe that airwaves could become dominated by American media which would be detrimental to domestic industries.
Both the U.S and Canadian governments are grabbling with the concepts of free trade vs. protectionism, at least regarding specific sectors. A NAFTA without Canada would be harmful to the Canadian economy. But, that fact puts Canada in a place to be more at mercy toU.S demands. On the other hand, pursuing the trade deal with our Northern neighbor will not be will not be an easy way out.