NAFTA...Time To Throw Mexico Under the Bus

Yes, I know, it isn't the Canadian way to abandon friends and allies but sometimes national self-interest is more important.

Nobody in the docile Canadian media is saying what is painfully obvious, that is that it is time to admit that Mexico is holding Canada back from a successful re-negotiation of NAFTA, the North American Free Trade Agreement.

Donald Trump could not have been clearer in outlining his position that he would prefer his to sink NAFTA as it stands and re-negotiate separate trade agreements with Canada and Mexico.

"To be honest with you, I wouldn't mind seeing NAFTA where you'd go by a different name, where you'd make a separate deal with Canada and a separate deal with Mexico.....You're talking about a very different two countries."- President Trump

It's time for Canada to embrace this idea because it's painfully clear that Mexico is going down and will no doubt drag Canada with it, if we stick around.

Let's face it, making common cause with Mexico isn't in Canada's interest anymore. Donald Trump has made no bones about his disdain for Mexico and border jumpers and has promised to take action during his campaign for the presidency.
Media mavens and pundits have continually misunderstood Trump's obsession with doing what he promised.
Upon election, he immediately scuttled American participation in the Trans-Pacific Partnership trading agreement, exactly as he promised.
Much to the shock of seasoned pundits, he moved the American embassy to Jerusalem, exactly as he promised.
Readers should note that moving the embassy was a promise that Presidents Obama, Clinton and  Bush all made, all of whom who reneged.
When Trump made that same promise, it was widely expected that he too would renege, but he did not, even in the face of tremendous criticism and pressure.

Canadian negotiators should understand his morbid obsession with fulfilling campaign promises will mean that ultimately NAFTA, as it stands, will have to go.

Instead of trying to save the doomed NAFTA agreement, Canada should set itself apart from Mexico and indeed from Europe, Japan and China in negotiating a favourable trade agreement.
Why?
Because Canada isn't in the same boat as the other countries that do trade unfairly and which do actually take advantage of America's trade largess.

Europe, China and Mexico all share obscene trade imbalances with America, while Canada does not. Canada doesn't put up as many phony trade barriers against America's goods as does Europe, Japan and China.

Canada/US trade accounts for a staggering US$582 billion dollars with Canada sending the United States US$299 billion and America sending us US$282 billion, a trade difference in Canada's favour of just 3%.
Considering that much of what Canada sends the US is raw materials and oil and that the United States sends us manufactured goods and food, it means that the US enjoys a large advantage in actual jobs related to the trade.
It is perhaps the fairest bilateral trade situation in the world.

But such is not the case with the other trading partners.
Here are the actual trade numbers with the other trading partners, all of which enjoy huge trade imbalances.

1. China - $636 billion traded with a $375 billion deficit with a 60% trade advantage
2. Mexico - $314 billion traded with a $71 billion deficit with a 23% trade advantage
3. Japan - $204 billion traded with a $69 billion deficit with a 30% trade advantage
4. Germany - $171 billion traded with a $65 billion deficit with a 38% trade advantage

Many of these so-called free-trading partners put up artificial tariffs and barriers against American goods, especially in the automotive sector and Trump is justified in attacking them over protectionist trading practices.

Canada isn't in the same boat as the other countries and shouldn't be lumped in among them.

It's time to make this point and to negotiate a deal that is fair to us and America and if it requires dumping Mexico to do so, we should not hesitate.

The deal is there for the taking, Trump has already said so in no uncertain words. We'd be idiots to ignore his resolve, otherwise, we might find ourselves without a vital trade agreement and perhaps the US embassy in Ottawa moved to Cornwall.