NAFTA Deal Reached at the Last Hour

11th Hour Deal

Well here we are at the beginning of a new month. It's hard to believe that it is October already and this coming weekend is a Canadian Thanksgiving. I had a post all written and ready to publish last night concerning the North American Free Trade Agreement negotiations and that Canada had failed to make the deadline imposed by US Pres. Donald Trump. I was almost ready to hit the publish button in WordPress when I sat back and wondered, what happens if by some strange miracle and agreement is reached by midnight. So, I decided to hold off on hitting the publish button thinking that if something did happen regarding the negotiations, I could always write a new post today. When I finally did get into bed last night I turned on the television and put on the CTV News to watch the 11 PM broadcast. Upon the start of the broadcast there was a breaking news caption flashing on the bottom of the screen. I thought perhaps the breaking news was weather related or there was some other tragedy being broadcast. Instead, the breaking news was that NAFTA negotiations had been completed just before the midnight deadline. So of course, I had to delete the post I had written last night and write a new post for tonight, this time signifying that the NAFTA deal have been finalized.

Canada To Be Excluded

Former NAFTA logo with the flags of each country represented. United States, Mexico, and Canada.
Former NAFTA logo with the flags of each country represented.

For some time now, US Pres. Donald Trump has indicated that he was willing to go ahead with the trade deal between the United States and Mexico I leave Canada out if the deal wasn't able to be negotiated before the September 30 deadline. Donald Trump made it quite clear that he was unwilling to make any concessions that would see the United States come out behind Canada or Mexico in terms of trade balances. Mr. Trump made it quite clear when he won the election for United States Pres. that NAFTA was a deal he didn't like and that he was prepared to tear up if it couldn't be negotiated to be more in the favour of the United States. Donald Trump has stated many times that the United States has lost billions and billions of dollars in trade deficits due to the unfavourable terms in the NAFTA document. There are many who would say that Donald Trump has his facts all wrong, but he is convinced that he is right when it comes to any type of business deal including NAFTA.

Canada To Stand Firm

Some 14 months ago when negotiations began to update and rewrite the NAFTA agreement, Canadian Prime Minister Justin Trudeau made it clear that Canada was going to stand firm and do what was best for Canadians and Canadian business. It was one of the few statements that he has made since he took office that I have agreed with. It's still not clear what exactly is contained in the new agreement, but there are some groups such as dairy farmers who are saying that Justin Trudeau sold them out. Today in Québec, is election day and voters will decide whether they keep the premier they now have or bring in a new one. Given that Québec has many dairy farmers, every political leader in the province has been voicing their dismay regarding the new trade deal and how it will impact those farmers. The federal government has said that dairy farmers will be compensated to account for any losses they may incur due to the new trade agreement.

Dairy Farmers Upset

One thing we know for sure with the new agreement, is that it is no longer known as NAFTA or North American Free Trade Agreement. The new agreement USMCA which is the acronym for United States Mexico Canada Agreement. It appears that Donald Trump didn't like the former name North American Free Trade Agreement and wanted it changed to the new name. Despite the new name, dairy farmers are not so happy about the new deal. So, in the coming days and weeks we should learn more about the new trade agreement and what it will mean for Canadians and businesses within Canada. We know that the stock market was in favour of the agreement being reached as the loonie rose sharply once the news was in the agreement had been reached. Other news concerning the new trade agreement indicate that there will be no tariffs imposed by the United States on the auto sector. Donald Trump had previously threatened to impose a 25% tariff on all vehicles crossing the border. Such a tariff could easily have thrown Ontario into a major recession resulting in numerous job losses. Having those threats of imposing tariffs removed will help many sleep a little easier going forward.

Give and Take

I think it's no surprise that Canada would've had to make some concessions to make Pres. Trump happy. By now most people are aware that his administration believes in protectionism and his “Make America Great Again” slogan. I'm not an executive or a politician and in business I've never held the position beyond middle-management, but even I know when you're making a deal with other parties there must be give-and-take on all sides. Unfortunately, that doesn't seem to be the way that Donald Trump wants to do things. He continually stated during the negotiations there is a new trade deal wasn't done right and was more favourable to the United States, he would simply just tear it up. I know that he spent many years in the business world before stepping into the political ring and getting elected as a new president of the United States on his first run out, but he doesn't seem to understand how the global economy works. At least, that's the way I see it.

Amazon Savings in the Future

I'll wrap things up here as it is getting late and I had very little sleep last night. We now have a new trade deal known as USMCA and will learn more soon on how all of this will affect us going forward. If it means I'll be able to save a few bucks when I order something stateside through Amazon, I'll be happy. I'm sure we'll be hearing more from dairy farmers in the very near future and it wouldn't surprise me if once again they invade Parliament Hill with their tractors and farm machinery as he did a few years back. That's one of the highlights of living in Ottawa, seeing various groups trying to convey their message to our federal politicians. One of the freedoms allowed to us in a democratic society.

Cheers,

G-Man

Graphics provided by Wikipedia.org.
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