No Need to Panic About NAFTA With President-Elect Trump?

Donald Trump has been clear about what he thinks of the North American Free Trade Agreement, calling it different versions of “the worst trade deal maybe ever signed anywhere” throughout his campaign.

Now that he’s the president-elect, Trump having the unilateral ability to pull the U.S. out of NAFTA on six months notice is a concern for the Canadian economy, especially in export-oriented sectors like agriculture.

But should it be?

“I think we really shouldn’t be panicking too much about this,” says Peter Clark, Ottawa-based international trade strategist who’s worked with Canadian ag interests in NAFTA and WTO negotiations.

Joining RealAg Radio on Wednesday, Clark suggests Trump may soften his stance as he settles into the new role, especially when it comes to trade with Canada, since his bullseye was painted on Mexico throughout the campaign.

“You can abrogate the agreement on six months notice. It’s a bit of a mess, but frankly when people sit down at the table they can usually reach some kind of accommodation,” he notes, in the interview below. “NAFTA is important to all three parties. I would expect that if there are irritants that the United States doesn’t like, that they would sit down and try to deal with them.”

While the new U.S. trade representative and ag secretary have yet to be named, Clark says he also takes solace in knowing some of the people who could be advising Trump on trade issues.

“He will have good, competent staff available to him. There are a lot of really good, trade-savvy people with trade negotiating experience — Republicans — in Washington and New York, and people will be looking to them to help,” he notes.


Maybe the most significant reason why Clark believes Canadians shouldn’t panic about NAFTA is the fact that Canada and the U.S. have their own free trade agreement that preceded the trilateral treaty signed in 1994

“We have to bear in mind that even if NAFTA is abrogated, we still have the Canada-U.S. Free Trade Agreement, which deals with most issues for us,” explains Clark. “People don’t seem to understand where the trade really went up was with the Canada-U.S. Free Trade Agreement. NAFTA was largely defensive for Canada because Mexico was coming into a free trade arrangement with the United States and we didn’t want to see excessive dilution of our preferred access.”

On the other hand, the Trans-Pacific Partnership, which could supersede NAFTA, is “basically dead,” says Clark. “There’s no way we can resurrect it with the other countries unless we change the accession provisions, and that might be an option…”

As with much of the rhetoric surrounding the Trump campaign, we’ll probably have to wait for the dust to settle before we see how the president-elect plans to follow through on trade. However, Trump will have to tweak his style if he’s going to work together with other countries, as he alluded to in his victory speech, says Clark.

“He can’t be the bull in the China shop — the picture that he painted during the campaign. You can’t do that. We hope we see him becoming more presidential, because he has a big responsibility,” says Clark. “He’s got a lot to deliver. He has a big challenge, and we have to give him a chance to see if he can do it.”

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