In The Media

Split decision: Will the new TPP help or hurt Canada in NAFTA talks?

by Alexander Panetta (feat. Eric Miller)

The Canadian Press
January 23, 2018

MONTREAL -- Canada's decision to sign onto a major multinational trade agreement without the United States added a dramatic new wrinkle to the NAFTA process Tuesday just as negotiators gathered for a crucial bargaining round.

The new Trans-Pacific Partnership agreement brings Canada into a new, sprawling trading bloc with standards not always obviously compatible with the goals of its superpower next-door neighbour.

It allows more content into automobiles from non-free-trade partners like China -- at the very moment that the United States is trying to achieve the exact opposite in NAFTA, with tougher rules to keep out Chinese and other Asian parts.

Canada's chief NAFTA negotiator downplayed the effect on his work.

"It's pretty much separate tracks," Steve Verheul told The Canadian Press, while walking between meetings at the Montreal NAFTA round.

"It has not come up here yet -- so far."

Note the qualifier -- yet.

Both supporters and detractors of the TPP pact predicted that this major liberalization of trade in auto parts with Asia will wind up at the NAFTA table somehow.

A Canadian auto-parts lobby group delivered a scathing reaction.

Flavio Volpe of Canada's Auto Parts Manufacturers' Association said the TPP agreement paves the way for more Chinese content in Canadian cars, at the moment Canada's most important customer, the U.S., has made clear its goal of reducing Chinese imports.

He said it's especially problematic in the midst of sensitive NAFTA negotiations.

"This could not be a dumber move at a more important time," Volpe said in an interview.

He accused the government of chasing a legacy item, without regard for how it might affect the far more important NAFTA negotiations: "We're trophy hunting."

The U.S. buys three-quarters of Canada's exports.

Pointing to that U.S. dependency, several defenders of the new TPP said that's part of the rationale for seeking new alliances. One senior federal source said he believes this even helps Canada's position at the NAFTA bargaining table, showing the U.S. that it will look elsewhere for partnerships, giving Canada greater leverage.

"It's better than worth it. It's advantageous," said the official, who spoke on condition of anonymity because he was not authorized to speak publicly on the matter.

"The U.S. does not respect weakness."

One person thrilled with the new 11-country Pacific pact still acknowledged it could create new headaches at the NAFTA table. Eric Miller, a Washington-based trade adviser who worked for the federal government on the 2009 auto bailout, said it will complicate monitoring of auto parts.

Expect U.S. customs officers to keep a closer eye on how much Asian, and especially Chinese, content there is in Canadian shipments, Miller predicted, adding that this will likely raise monitoring and compliance costs for companies.

It will also shape the way the three countries negotiating NAFTA design the auto-parts compliance rules, he said.

"It will certainly make things more complicated," Miller said. "This will certainly be a significant administrative challenge ... (And) these NAFTA discussions (on autos) become all the more important."

That being said, Miller is delighted there's a deal. He said it's great news for lumber exporters, and livestock producers, and many other Canadians and he believes it's smart for Canada to diversify its trade.

"I think it's great news for Canada and Canadian exporters," Miller said.

"If we can maintain access to the U.S., and create new linkages with the outside world, it's the best of both worlds ... This helps to advance the cause of trade diversification ... (and) I think it actually helps Canada's leverage in NAFTA."

Miller added: "This sends a signal: that Canada has options."


Be the first to comment

Please check your e-mail for a link to activate your account.
SUBSCRIBE TO OUR NEWSLETTERS
 
SEARCH
PODCAST

Canada's State of Trade: Getting Our Goods To Market

May 17, 2018


On today's Global Exchange Podcast, we continue our series on the state of Canadian trade in a world of growing populism and protectionism. Today's episode, recorded during our February 13th State of Trade conference in Ottawa, features Bruce Borrows, Jennifer Fox, and David Miller in conversation with the Wilson Center's Laura Dawson about getting Canadian goods to international markets.


IN THE MEDIA

Between Trump, Iran and North Korea, Canada’s G7 has a high potential for chaos

by Chris Hall (feat. James Trottier & Colin Robertson), CBC News, May 18, 2018

The struggle Trudeau could face if Kinder Morgan walks away from Trans Mountain

by Robert Tuttle & Michael Bellusci (feat. Dennis McConaghy), Bloomberg News, May 18, 2018

Canada 'a laughing stock': Experts react to Trans Mountain indemnity

by April Fong (feat. Dennis McConaghy), BNN Bloomberg, May 18, 2018

AUDIO: NAFTA update

with Danielle Smith (feat. Sarah Goldfeder), Global News Radio, May 18, 2018

VIDEO: NAFTA Deadline Day (@ 3:00)

with Don Martin (feat. John Weekes), CTV Power Play, May 17, 2018

VIDEO: Deal or no deal on NAFTA: Canada and U.S. send mixed messages

with Rosemary Barton (feat. Colin Robertson), CBC The National, May 17, 2018

Trump’s 'submission' strategy is not working so expect NAFTA talks to drag on

by Kevin Carmichael (Feat. Eric Miller), Financial Post, May 17, 2018

Backstop deal may be last hope for TransMountain pipeline, says former oil executive

by CBC News (feat. Dennis McConaghy), CBC News, May 17, 2018

Stuck with limited oil export options, Liberals may regret B.C. tanker ban

by John Ivison (feat. Dennis McConaghy), National Post, May 17, 2018

Feds OK early start to construction of navy’s new supply ships

by Lee Berthiaume (feat. Dave Perry), The Canadian Press, May 17, 2018


LATEST TWEETS

HEAD OFFICE
Canadian Global Affairs Institute
Suite 1800, 421-7th Avenue SW
Calgary, Alberta, Canada T2P 4K9

 

OTTAWA OFFICE
Canadian Global Affairs Institute
8 York Street, 2nd Floor
Ottawa, Ontario, Canada K1N 5S6

 

Phone: (613) 288-2529
Email: contact@cgai.ca
Web: cgai.ca

 

Making sense of our complex world.
Déchiffrer la complexité de notre monde.

 

© 2002-2018 Canadian Global Affairs Institute
Charitable Registration No. 87982 7913 RR0001

 


Sign in with Facebook | Sign in with Twitter | Sign in with Email