NAFTA and Canada

Mexico and the US have agreed

The big question now is will Canada follow before the deadline of the end of August?

Given the expertise we displayed so far in the negotiation, it is impossible to tell. If they do not, then tariffs on automobiles appears to be the price for their intransigence. If yes, what will Mexico and the US agree to do that they don’t want to do?

The position is amazing

I think naive might be a better word. Did the Canadian negotiators really think that they could get what they wanted from the United States. Maybe they did, but anyone experienced in negotiation would have suggested it was impossible.

Aside from letting Mexico lead the way without Canada.

  • The countries are not equals on the economic playing field. The state of California is a little larger than Canada in population and 70% larger in GDP. The GDP of Texas and New York is much the same but with far fewer people. Canada Exports about $300 billion to the US, roughly 20% of our GDP. The US imports a little less from Canada. About $280 billion. Less than 1.5% of their GDP.
  • Canada has trade barriers they are politically motivated to keep. Farmers vote here, American politicians do not. American farmers vote there and likely influence their politicians. Canada probably won’t give those barriers up easily.
  • Canada has a large generic drug industry. The extension of patent protection to 10 years from 8 matters
  • The president is a skilled negotiator having spent his entire life involved in deal making. The prime minister was a ski instructor and drama teacher.

The reality

Canada will eventually accept what they are given.

Virtue signalling will not have much effect at the economic bargaining table. The prime minister has an election on the horizon and losing the auto sector will matter. Unions like their jobs better than ideology.

And they have two days to decide.

You could not do it worse.

I help business owners, professionals, and others understand and manage risk and other financial issues. To help them achieve their goals, I use tax efficiencies and design advantages to acquire more efficient income and larger, more liquid estates.

In previous careers, I have been a partner in a large, international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.

Please be in touch if I can help you. 705-927-4770

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