USMCA losses, trade diversification, and China — A LIVE! Q&A with Carlo Dade
Did anyone win in the final version of the New NAFTA? Is trade diversification for Canada just a pipe dream? How come we rarely talk about trade with Mexico? In this edition of RealAg LIVE! with Carlo Dade, director of the trade & investment centre of the Canada West Foundation, host Shaun Haney gets in to the nitty gritty of trade deals and trade relationships.
Summary is below the player.
- Is it USMCA, CUSMA, or New NAFTA, a good deal?
- Circumstances are everything. Remember we had the TPP…then U.S. President Donald Trump needed to win, not win-win. And walked away. So, what is a “good” deal? Well…
- Sometimes the best you can do is limit losses, versus making gains
- USMCA, as written, will mean that all three countries will actually be further behind vs. NAFTA. How? Complexity, red tape, slower trade. More content rules, more paperwork for ingredients, etc.
- The losses aren’t severe, though worst for Mexico, of the three countries
- What should we call it? The Seinfeld Agreement. The show about nothing. There are modest tweaks and updates, some access to Canadian dairy, some intellectual property and copyright updates. It was 3.5 years of drama to get bits and pieces of what was already negotiated under TPP.
- OK, but the dairy industry might disagree. But then, we see how Canada is going to use the quota system to “meet” the new rules.
- Optics of the POTUS winning trade wars? They are “easy to win,” remember?
- Let’s talk tariffs — the long-term impact of Trump’s tariffs? We still have nothing to protect us from these.
- What would Carlo have liked to see in NAFTA 2.0? Everything we had in TPP that got thrown out the window. People movement, for one. The 25 year-old list of people that can move back and forth easier within companies. Under TPP, new types of jobs can move professionals back and forth between signatories. Between Canada and the U.S. (and Mexico), it’s hard to move people
- It’s $10,000/worker per year cheaper to have people live in Canada, for example. We don’t need to cut taxes to out-compete the U.S. to attract talent and skilled labour
- Would have liked to have seen more protection IP and copyright, rules around right to repair for farm equipment
- On the U.S side of the border you can hack your tractor…but not in Canada
- How come we don’t talk about Canada-Mexico trade as much? We should! We do quite a bit of trade with Mexico.
- If you had to place a bet, China or the U.S. — who gets in to CPTPP first? It would be much harder for China to get in, even if Trump gets in to office again and eats crow. China could make some concessions and agree to certain reforms.
- Would president-hopeful Joe Biden be more likely to try and get in to CPTPP? Both the left and right aren’t terrible keen on trade in the way that Canada is
- U.S./China trade war: pretend to be friends, but throw darts at each other, and Canada is in the middle. The Americans used us, in the worst way. And this is where we are stuck.
- The relationship, the trade relationship, the diplomatic relationship is complicated, and strained, but in the long-term could improve (only way to go is up?)
- China has had food safety and food security issues — sometimes it looks like paranoia, but it’s a real concern there
- Should we be looking outside of U.S. and China for exports? Sure, we could, but they are such huge customers of Canada’s
- Diversification isn’t that simple. The U.S. is a rich market that’s close by. Let’s not work twice as hard for half the money.
- But! As we get better trade deals, those numbers can begin to shift, but we’re talking percentages, not huge chunks of trade