Cambridge Chamber of Commerce

 

Never in the history of trade negotiations have we seen a country’s largest, most important business  association openly call its government’s trade proposals “dangerous” and say they should be withdrawn. That is exactly what the U.S. Chamber of  Commerce did yesterday.

 

Canada’s negotiators have done their very best in a challenging environment. They have reached out to Canadian people and business, they have extended a warm hand of friendship to their U.S. and Mexican counterparts and they have tabled sensible, generous proposals to improve NAFTA. But, we all have to prepare for the possibility that the U.S. will withdraw from NAFTA, based on the poisonous proposals U.S. negotiators have presented.

The craziest is a sunset clause that would terminate NAFTA after five years unless all three parties agree it should continue. Imagine the uncertainty of having all three countries debate the merits of trade every five years. How could anyone plan to build a factory with a useful life of 30 years? NAFTA would cease to exist for the purposes of long-term business investment.

 

The second troubling proposal concerns the rules of origin. Currently, 62.5% of a car or a truck must be produced in the U.S., Mexico or Canada for it to qualify for duty-free treatment under NAFTA. The U.S.’s proposal would require that 50% of the vehicle be produced in the U.S. This would be immensely harmful to the North American auto industry. It’s impossible to replace long-established multi-billion- dollar supply chains so most companies would simply pay the generally low U.S. tariffs. Manufacturers would then source more inputs from Asia.

 

The third concern is the administration’s proposal to eliminate Chapter 19, the process for dispute  settlement for anti-dumping and countervailing duties.
 
This comes at a time where the U.S. wants to impose a ludicrous 300% tariff on Bombardier jets, which is above even what Boeing had asked for. Chapter 19 is a critical safety net because it enables an independent, binational panel of five arbiters, agreed by both parties, to determine whether or not the duties have merit based on U.S. domestic laws. This is a must-have for Canada.

 

The final jaw-dropping proposal would drastically reshape NAFTA’s procurement rules. U.S. negotiators are proposing a “dollar for dollar” approach to North American procurement markets. That would mean “the total value of contracts the Canadians and Mexicans could access, together, couldn’t exceed the total value that U.S. firms could win in those two countries.” This is quite simply the worst offer ever featured in a trade agreement and is worse than basic access to government procurement offered under the WTO. Canada would be better off with no agreement at all than signing on to this nutty nonsense.

 

At the Canadian Chamber of Commerce, we salute the government’s efforts on NAFTA. The government has done everything possible: our negotiators have been outstanding, Minister Freeland and the entire Cabinet have invested enormous time in building relationships in the U.S., and the PM has invested his political capital and considerable charm to go to bat for NAFTA.

 

ut, if the U.S. administration is not serious about negotiating a mutually beneficial agreement, then we believe no deal is preferable to a bad deal. This is because a trade agreement will last many years. The Trump administration, we’re not so sure…

 

 

For more information, please contact:

Hendrik Brakel

Senior Director, Economic, Financial & Tax Policy

613.238.4000 (284) 

[email protected]

Subscribe to this Blog Like on Facebook Tweet this! Share on LinkedIn

Contributors

Blog Contributor Portrait
Brian Rodnick
190
March 17, 2024
show Brian 's posts
Blog Contributor Portrait
Greg Durocher
41
July 28, 2023
show Greg's posts
Blog Contributor Portrait
Canadian Chamber of Commerce
24
January 29, 2021
show Canadian Chamber's posts
Blog Contributor Portrait
Cambridge Chamber
2
March 27, 2020
show Cambridge 's posts

Latest Posts

Show All Recent Posts

Archive

Tags

Everything Manufacturing Cambridge Events Spectrum New Members Taxes Region of Waterloo The Chamber Property Taxes Government Waste Cambridge Chamber of Commerce Networking Success Di Pietro Ontario Chamber of Commerce Greg Durocher Scott Bridger Food Blog Canada Ontario Cambridge Memorial Hospital Business After Hours Discounts Member Benefits Affinity Program Web Development Visa, MasterCard, Debit Big Bold Ideas Politics Elections Municipal Provincial NDP Liberals PC Vote Majority Christmas Homeless Leadership Oil Sands Environment Rail Pipelines Keystone Canadian Oil Canadian Chamber of Commerce Small Business Next Generation Cyber Security Millennials Energy Trump Washington Polls US Congress Bresiteers Trade NAFTA Europe Economy Growth Export Minimum Wage 15 dollars Bill 148 Cost Burdens Loss of Jobs Investing Finance Canada Capital Gains Exemption Tax Proposal MIddle Class Member of Parliment Unfair Changes Small Business Tax Fairness COVID-19 Mental Health Self-isolation Social Distancing Ways to Wellbeing Education Conestoga College Online Training Business Owners Personal Growth Communicate Young Professionals Workplace Communication Stress Emotionally and Physically Animals Pets Lockdown CEWS Employee Relief Employee Benefit Cambridge 50th Anniversary Celebrating Cambridge ToBigToIgnore Small Business Week Support Local Buy Local Business Support Waterloo Kitchener YouGottaShopHereWR Responsibility Culture Workplace Antiracist Inclusion Diversity Racism Federal Election Services Autonmy Professional Salary Wages CERB Workers Jobs Guidelines Health and Safety Etiquette Fun Inperson Members Golf Tournament GolfClassic Business Business Trends Home and Garden Garden Pools Home Improvements Backyarding Renos Summer Airlines Business Travel Bad Reviews Reviews Consumers Competition Bureau Dining Out Expert Advice Outdoors Economicrecovery BBQ Vaccines Community vaccinations Conferences Virtual Visitors Sportsandrecreation Spinoff Screening Kits Tourism Trends Productivity Engagement Remote working EmploymentStandardsAct Employees Employers Policies Employment Contracts Legal Public Health Virtual Ceremonies SMEs Health Canada Prevention Rapid Screening Health Entrepreneurs Building social networks Storytelling Video The She-Covery Project Child Care Workplaces Contact Tracing Time Management Pre-Budget Modernization Canada Emergency Rent Subsidy (CERS) Budget Ontario’s Action Plan: Protect, Support, Recover Federal Government Hotels and Restaurants Alcohol Tax Freezethealcoholtax Canadian Destinations Travel Grow your business Sales and Marketing Digital Restructure Financing Structural Regulatory Alignment Technological Hardware Digital Modernization RAP (Recovery Activiation Program) Support business strong economy Shop Cambridge Shop Local #CanadaUnited Domestic Abuse Family Funerals Weddings Counselling Anxiety Pandemic Getting Back to Work UV disinfection systems Disinfection Systems