Striking a trade deal between Canada and the U.S. that’s separate from the U.S.-Mexico agreement could make doing business between countries in North America a lot more difficult, says an advocate for Manitoba manufacturers.
But some Manitoba businesses are anxious to get a deal done, even if it isn’t trilateral.
On Monday, U.S. President Donald Trump announced a new trade agreement with Mexico that he says will replace the North American Free Trade Agreement.
The Americans are now set to negotiate to see whether Canada can be part of it, he said, suggesting that if Canada is prepared to negotiate fairly, it should be simple. He also said the U.S. would put automotive tariffs on Canadian imports if talks don’t succeed.
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Ron Koslowsky, the Manitoba vice-president for Canadian Manufacturers and Exporters, a business association, said they’re still hopeful there can be a trilateral deal among the three countries, because separate deals would make doing business across the three countries much more complicated and end up costing consumers more.
“The supply chains that have built up over the years, which cross the three countries regularly and efficiently, would be compromised, costing everybody more if those were to be undermined,” he said.
“So we’re still absolutely hopeful that this is simply a way to get the deal done with all three countries.”
That being said, the most important thing is that Canada strike a deal with the U.S., the country’s biggest trading partner, he said.
“Because if we don’t have a deal, and if we end up having the kind of border that isn’t very friendly or we have the kinds of words exchanged that we had earlier this year between the leaders taking shots at each other, those will bode very poorly for Canada in particular, because we won’t win a trade war with the U.S.,” he said.
Anxiety among manufacturers
Right now, the lack of certainty around trade between the two countries is causing a lot of anxiety among his membership, with some holding off on expansion plans, Koslowsky said.
“So whatever happens, it’s affecting decisions now of companies in Canada,” he said.
The longer this uncertainty goes on, the worse it is for businesses and consumers on both sides of the border, said Chuck Davidson, president and CEO of the Manitoba Chambers of Commerce.
“The last thing we want to see, and the last thing our American counterparts have said they want to see, is an increase in tariffs, increase in barriers in that trade relationship,” he said.
Some manufacturers already have seen their costs go up, he said.
“You’re going to start seeing cost increases for consumers, as well as prices start to go up, unless a deal is hammered out sooner rather than later.”
With files from Susan Magas
Published at Mon, 27 Aug 2018 15:27:22 -0400