NAFTA Down to the Wire? Not so Fast!

"This is not a strong economy. [Beyond the country's borders] our position remains vastly diminished, [foreign policy disconnected from trade relationships]."
"It is my duty to stand and be counted. Our country is at risk. My attempts to raise my concerns with the government were met with silence."
Leona Alleslev, MP Aurora-Oak Ridges-Richmond Hill

"Mexico, they can sign whatever they want [on November 30]. They can sign a napkin. They don't need the complete text."
"Canada will play along with this Kabuki game and will come to some agreement at the end of September."
Gary Hufbauer, trade expert, Peterson Institute for International Economics, Washington

"Mexico] did what was possible and not what was desirable."
"Seems to me that it is better to have a NAFTA O.S. ... than not to have a NAFTA."
Luz Ma de la Mors, Mexican incoming undersecretary of state for trade

"It is a real deadline."
"Once we move past the end-of-September deadlines, the procedural and political issues become much more challenging and unpredictable ... Stringing this out does come with economic consequences."
Dan Ujezo, Ohio-based trade lawyer

"A lot of this is about ... psychological warfare. [But] Verheul is doing what he always does; stay focused on the substance, stay cool, let the abuse and the accusations roll off him like water off a duck's back."
"Unlike Mexico, Canada has been steadfastly focused on the content of the agreement, and trying not to get boxed in by artificial deadlines."
"The deal will take as long as the deal takes, whether it takes till the end of the month or the end of the year."
Eric Miller, Consultant, free-trade negotiation veteran, Washington

Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland on Thursday announced dollar-for-dollar tariff 'countermeasures' on up to $16.6 billion worth of U.S. imports. (Patrick Doyle/Canadian Press)

There it is: In the three-way negotiations, Canada got inconveniently sidelined. Canada was under the impression after meetings between its negotiators and key ministers with their Mexican counterparts that an attitude of 'we're in this together' prevailed; that both Mexico and Canada would present a united front for fair trade negotiations under pressure from American negotiators put on notice by their president that the U.S. was too giving and polite for too long, to the detriment of U.S. advantage in trade.

Canada and Mexico had ripped off the U.S. for too long and the free ride was coming to an end, thundered President Trump.

Without much of a doubt, matters might conceivably have progressed far differently had Canada determined that it would be best for Foreign Affairs Minister Chrystia Freeland to bow out allowing the Minister of Trade to take the helm, rather than risk irritating the U.S. chief negotiator Lighthizer, whose opinion of her is none too flattering. Canada's top career negotiator Steve Verheul is well versed in the premiums that the country places on various issues from dispute resolution sections to cultural industries protection, to supply management.

It's somewhat hard to credit that the U.S. is anxious to have the three-way NAFTA agreement in the can and approved by Congress in time to allow Mexican president Enrique Pena Nieto to decamp with a successful legacy project, which his incoming replacement can, on the other hand, blame on his predecessor, should things go south, as they well might, since Mexico's agreement with the U.S. is nothing to write home about, caving in to too many American demands, not the least of which is the minimum wage for workers in vehicle production in Mexico.

U.S. vehicle manufacturing unions are just as concerned as the Canadian bargaining team about the Trump threat to impose a 25 to 30% tariff matching those on steel and aluminum to bully Canada into signing onto the agreement already agreed to by Mexico.

"Everyone in the automobile industry -- doesn't matter if you're a retailer, a supplier or a manufacturer -- is freaking out around tariffs on automotives. The price point is so big, we all know it would be extremely disruptive, extremely expensive to the industry and most likely knock the economy into some sort of recession because it's so inflationary", warned Mike Jackson, chairman, chief executive of AutoNation Inc. and chairman of the Federal Reserve Bank of Atlanta.

Wait -- it's not only dairy and automobiles. How about American wine? US. wine exports to Canada realized $443.9 million in 2017. "If NAFTA no longer exists we could see a half a billion dollars thrown out the window" declared Michael Kaiser, vice-president of WineAmerica. "So obviously we want to make sure the Canadian market remains open to U.S. wine". "There's a lot of unfair trading practices that happen in the United States that they don't like to talk about", commented Paul Speck, president of a Niagara winery, in Ohio trying to sell his wine.

"I'm in Cleveland selling and I have a 35% disadvantage compared to my competitors. In these trade deals everybody likes to nitpick but at the end of the day the California wine industry has done phenomenally well in Canada since NAFTA." As for the Canadian Vintners Association, it is "hopeful that the modernization of NAFTA will assist the growth of Canadian wine exports to the United States and Mexico."