100%(1)1 out of 1 people found this document helpful
This preview shows page 1 - 3 out of 4 pages.
Nafta Is Suddenly in Doubt, and Canada ReelsA worker at the Chrysler assembly plant in Brampton, Ontario. President Trump has threatened to impose hefty tariffs on Canadian-made cars and auto parts.Credit Credit Mike Cassese/ReutersBy Catherine PorterThe New York TimesAug. 28, 2018TORONTO — First the American president started a trade war with Canada, one of the United States’ closest allies and trading partners, imposing tariffson the country’s steel and aluminum. Then, he calledPrime Minister Justin Trudeau “very dishonest and weak,” shattering what was expected to be his moment of glory on the world stage at the Group of 7 conference in Quebec.Now, President Trump has gone behind Canada’s back and negotiated what he calls a trade deal with Mexico, leaving Canada on the sidelines. Hehas also threatened to impose hefty tariffs on cars, one of Canada’s most important exports.The power play has sent the country reeling, with trade lawyers trying to gauge how much of Mr. Trump’s threat was negotiation bluster versus directive, and economists sorting through what a world without the North American Free Trade Agreement would mean for Canada.Most conclude that an end to Nafta in itself would not severely harm the country’s economy, although it could chill international investment — but that Mr. Trump’s threatened 25 percent auto tariff would be disastrous.“This would be enough to throw us into a recession because the auto industry is so important to Canada,” said Philip Cross, the former chief economic analyst at Statistics Canada, a government agency. “We are in uncharted territory here.”
It’s the biggest rift yet in the relations between the two nations, and one that could have the biggest practical import. In recognition of the stakes, Chrystia Freeland, Canada’s foreign affairs minister, cut short a visit to Europe and rushed to Washington to shoulder her way back into the bargaining room, although her spokesman said that the government’s position had not changed, and that it would only sign a deal that was good for Canada.At the same time many leaders in Congress, which must approve any trade pact, have expressed reservations about leaving Canada out. And if Mr. Trump intends to partner only with Mexico, he will also need congressional approval to bring Nafta to a close.That Mexico has seemingly usurped Canada’s place as the primary trading partner with the United States struck many in Canada as deeply offensive.Only a year ago, the debate in Canada was whether to abandon Mexico at the negotiation table. In the end, Canadian politicians insisted that any deal would need to involve Mexico, even though it was then the focus of Mr. Trump’s ire over trade and immigration.