WASHINGTON—Canada might be forced to renegotiate the North American Free Trade Agreement if the next U.S. president insists upon it, a Washington lawmaker says.
During a forum co-hosted by the Canadian American Business Council on May 24, California congressman Darrell Issa said Canada is so trade-reliant on the U.S. that it couldn’t easily ignore an American ultimatum on revising the deal.
“We could walk away from NAFTA any time,” said Issa, a Republican who sits on different congressional committees dedicated to intellectual property, foreign affairs, and trade. “We’ve always been able to.”
Every major candidate for president has expressed support for changing NAFTA. Republican Donald Trump is a virulent, decades-long critic of trade deals which he’s repeatedly said he would change; Democrat Bernie Sanders has been equally critical; and likely Democratic nominee Hillary Clinton has occasionally expressed support for reopening NAFTA.
Trade analysts have called the idea of scrapping NAFTA mind-bogglingly complex, given how product supply chains have grown since the 1993 agreement and tariffs have shrunk.
Even overhauling the deal might be risky, Issa himself cautioned. But if it happens, he offered two examples of sectors the U.S. could demand to have opened up.
Both are important to his home state.
One involves the so-called sharing economy—whose applications like the Uber car-ride app and AirBnB home-rental program face uneven regulation in different jurisdictions.
The Republican lawmaker also alluded to broadcasting and Canadian-content quotas that survived the original NAFTA.
“If we want to renegotiate NAFTA and say, ‘You’ve got to open up to the sharing economy. [And] you can’t require, in French Canada if you will, that there be this content requirement to everything,’ is that a big problem for Canada? Yeah.
“Canada lives based on its ability to trade with the United States.”
Issa expressed skepticism that the likely Democratic nominee means what she says about unpopular trade deals during elections: “If you’re going to vote for Hillary Clinton you can trust the fact she’s lying,” he said.
Issa also defended NAFTA. He said globalization would be happening without NAFTA and it would potentially be worse for the U.S. He said more factory jobs would have wound up in Asia instead of Mexico, Mexico would have been poorer and the U.S. would face a greater influx of impoverished illegal migrants.
Canada’s Economic Development Minister Navdeep Bains also defended NAFTA while speaking at the same forum.
“For more than 20 years now our two countries have had the most successful trading relationship in the world—which of course was made possible by NAFTA,” Bains said.
“Commentators will likely never stop debating the merits of NAFTA. It’s come up a few times over the past few months and I suspect it may come up in the coming months as well.
“But there’s absolutely no disputing the fact that trade and investment between Canada and the United States represents not only millions of jobs for Canadians—but nine million jobs here in America. I’m an accountant by background, so I just want to let you know that numbers do matter.”
He referred to the nearly four-fold increase in trade on the continent since 1993.
In his speech, Bains promoted the new Canadian government’s innovation agenda—which he said will include a heavy investment in clean-energy technology.
Bains is also planning a visit to California’s Silicon Valley next month, as part of a wide-ranging review of innovation policy. He said policy-makers face the dual challenge of promoting high-tech activity, while dealing with the impact on workers in disrupted industries.
“We’re in an innovation race. This race is pretty intense, and the stakes are high,” he said.
The CABC business group released a paper on May 24 with recommendations for improving Canada’s performance in innovative sectors. It highlighted Canada’s persistent, long-term struggle to convert cutting-edge research into commercial products.
The paper offered ideas for bolstering ties between science and industry, reforming the patent system, and simplifying access to funding that might help Canadian start-ups grow.
From The Canadian Press