NAFTA Renegotiation

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kcowan
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Re: NAFTA Renegotiation

Post by kcowan » 29 Jul 2017 15:25

It is ironic that our marketing boards seem to achieve exactly what Trump is aiming for!
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Re: NAFTA Renegotiation

Post by Shurville » 02 Aug 2017 08:39

New Zealand dumped Supply Management for Dairy in the 1990's.
Look at them today!

•New Zealand accounts for 3% of total world production
•New Zealand exports about 95% of its dairy production
•In the year to June 2016, dairy was New Zealand's largest export sector (18% of total goods and service exports)
•New Zealand exported NZ$ 12.4 billion worth of dairy products in the year ending June 2016
•The top five markets for New Zealand dairy exports are: China, United States, United Arab Emirates, Australia, Japan
•New Zealand's top four dairy export products are: whole milk powder (37%), cheese (12%), skim milk powder (10%), and butter (9%)
•Protein products, UHT milk, and infant formula accounted for 21% of New Zealand dairy exports in 2015, up from 16% in 2013

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ghariton
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Re: NAFTA Renegotiation

Post by ghariton » 02 Aug 2017 14:25

We in Canada do not look at the policies of other countries in fields such as agriculture, health care, cultural policies, and so on. We in Canada have the TruthTM. Therefore it would be a waste of time to see how others do these things.

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Re: NAFTA Renegotiation

Post by kumquat » 02 Aug 2017 20:34

ghariton wrote:
29 Jul 2017 00:38

Given that the government never sold any milk quotas, but rather gave them away to the original recipients, that would be zero compensation, even after indexing for inflation.

I think that's a bit harsh. .......But as for the present holders, they purchased quotas in good faith, without notice that government actions would render the quotas much worse (if only the government would act). Give them their money back, indexed for inflation if you must.

George
I'm fully aware of how the original quotas were handed out. So were purchasers. They felt there was value in owning them anyway. Too bad they ended up being 'the greater fool'.
I don't intend to offend anyone, that part is just a bonus.

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Re: NAFTA Renegotiation

Post by ghariton » 02 Aug 2017 23:44

kumquat wrote:
02 Aug 2017 20:34
I'm fully aware of how the original quotas were handed out. So were purchasers. They felt there was value in owning them anyway. Too bad they ended up being 'the greater fool'.
Sure, they thought that there was value in buying quota, even at the ever-higher prices being charged. But re,=member that this value reflected, and still reflects, the outrageous treatment of Canadian consumers. This treatment should end, in my opinion. As to compensation, I thought that I ended up agreeing with you. Give present owners of quotas the price that they originally paid, bumped up for inflation from the time they purchased until now. I think that is very generous, given that they had the use of the quota, and enjoyed the monopoly prices that ensued, for the years that they held the quota. I'm not even asking that there be some amortization of the book value of the quota.

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Re: NAFTA Renegotiation

Post by OhGreatGuru » 03 Aug 2017 14:33

Put the Pacific ocean between us and the subsidized farmers in Wisconsin; and put us next door to China; and then we can talk about getting rid of supply management.

You can't separate the trade situation from the local demographics. No one is itching to export cheap milk to New Zealand and drive their dairy farmers out of business.

OTOH, an issue they are facing is a growing number of corporate dairy farms to supply the export trade, putting financial pressures on family farms.

FYI, there is very little fresh, whole milk sold in New Zealand. The industry is all geared towards product that has a long shelf life - powdered milk or processed dairy products like cheese - so that it can be exported. Liquid milk is largely UHT, which some people don't like the taste of (myself included.)

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Re: NAFTA Renegotiation

Post by Shurville » 03 Aug 2017 15:31

More views on the New Zealand dairy experience.

http://tvo.org/article/current-affairs/ ... y-industry

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Re: NAFTA Renegotiation

Post by ghariton » 03 Aug 2017 18:03

OhGreatGuru wrote:
03 Aug 2017 14:33
Put the Pacific ocean between us and the subsidized farmers in Wisconsin; and put us next door to China; and then we can talk about getting rid of supply management.
I don't agree. If the U.S. government wants to subsidise Canadian consumers of milk and dairy products, we should welcome that. Maybe some of our dairy farmers would face stiffer competition, but that would be greatly outweighed by benefits to Canadian consumers.

Anyway, if you are worried about unfair competition to Canadian dairy farmers, put a tariff on milk subsidised by others equal to the magnitude of the subsidy -- not sky-high absolute blocks.

And for heavens' sake, let Canadians enter the domestic industry without having to pony up millions of dollars for quotas, in addition to all the other costs of entry. We sure could use some domestic competition, whether or not we have competition from foreign sources.
You can't separate the trade situation from the local demographics. No one is itching to export cheap milk to New Zealand and drive their dairy farmers out of business.
I'm not looking to drive New Zealand producers out of business. But I understand that the demand from countries like China and Korea is growing rapidly. Perhaps our producers could het a piece of that expanding pie. Or perhaps not -- they've been coddled for so long that actually becoming efficient and innovative might be a leap too far. See what supply management has done?
OTOH, an issue they are facing is a growing number of corporate dairy farms to supply the export trade, putting financial pressures on family farms.
My understanding is that family dairy farms are also disappearing in Canada. It's agribusinesses everywhere, due to the economies of scale.
FYI, there is very little fresh, whole milk sold in New Zealand. The industry is all geared towards product that has a long shelf life - powdered milk or processed dairy products like cheese - so that it can be exported. Liquid milk is largely UHT, which some people don't like the taste of (myself included.)
I'm sure that if Canadians prefer the taste of the present form of milk, there will always be producers entrepreneurial to supply them. Meanwhile, why should the prices paid by cheesemakers and other producers of food be driven so much higher just because a few prefer a certain kind of milk?

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Re: NAFTA Renegotiation

Post by ghariton » 15 Aug 2017 13:17

Canada makes public its top ten demands ahead of the start of NAFTA renegotiations.

(1) A new chapter on labour standards.

We want to make this part of the main agreement, instead of a side agreement. The U.S. is onside. This is really aimed against Mexico.

(2) A new chapter on environmental standards.

Again, make it part of the main agreement instead of a side agreement. Mostly aimed against Mexico, although Canada may take the opportunity for some virtue signalling, leading to push-back from the U.S. Still, not a show stopper for Canada and the U.S.

(3) A new chapter on gender rights

I have no idea what this is all about. Given our government's other actions on gender rights, however, this could mean quotas, which might meet pushback from the other two (and rightly so).

(4) A new chapter on Indigenous rights

Again, I have no idea how this fits as part of a trade agreement. However, given some of our government's reactions to Indigenous demands, it might be hard to impose a similar approach on other countries.

(5) Reforms to the investor-state dispute settlement process

We want reforms to Chapter 11, which allows private companies to sue governments -- we want to make it harder for them to do so. By contrast, the U.S. wants to eliminate Chapter 19, which regulates disputes between companies, e.g. accusations of dumping (think softwood lumber, although that is not currently part of NAFTA).

(6) Expand procurement

Get rid of "buy American" requirements at the state and local levels. A very good idea, but one which the U.S., with its pork-barrelling, won't like. Goes squarely against Trump's protectionist leanings.

(7) Freer movement of professionals

Another very good idea. The U.S. federal government should be in favour, but the states might resist. After all, they are busy trying to make it harder for professionals to move between states.

(8) Protect Canada's supply-management system for dairy and poultry

What a terrible idea. I sure hope we lose this one.

(9) Protect cultural exemptions

Another terrible idea. Joe Clark said it best some thirty years ago when he told the Americans: "What you call entertainment, we call culture." Of course, our protectionism is not about making culture available to Canadians. Rather, it's about protecting the jobs of members of ACTRA and the profits of media giants like Rogers and Bell.

(10) Maintaining a process to regulate anti-dumping and countervailing disputes, like the one over softwood lumber

It seems to me that every agreement, trade or otherwise, must have some acceptable enforcement mechanism. Yes, the present mechanism can be reviewed and perhaps improved. But it seems to me a very bad idea to just scrap Chapter 19 and instead rely on the domestic courts of each country.

Both our Prime Minister and our Minister of Foreign Affairs have said publicly that this last demand is a "red line". If Canada doesn't get something satisfactory, we might walk away from the table. I agree that such posturing is necessary. But is the threat real? Would we really walk away? And if NAFTA is ended, without a replacement, what would that mean for the Canadian economy?

Sorta like a threat of Brexit.

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Re: NAFTA Renegotiation

Post by ghariton » 15 Aug 2017 18:46

U.S. media have taken note of the opening Canadian position. They run from the neutral like the New York Times to negative reactions, such as this one from Reason.

In passing, I note that the Canadian objectives seem to make no mention of intellectual property rights. Perhaps the present government has already decided that stronger patent protection, and hence much higher prices, for pharmaceuticals, are a reasonable price to pay to protect supply management. That would be in line with the position of the former Conservative government when negotiating the TPP.

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Re: NAFTA Renegotiation

Post by Shakespeare » 28 Sep 2017 22:34

Trump team plays hardball in NAFTA talks with Buy America demands - The Globe and Mail (May be behind pay wall.)
One Canadian insider described the U.S. demands as the "worst proposal in any trade agreement" that has ever been presented, saying it is being strongly resisted by Canada and Mexico.

The Trump administration proposal calls for boosting the minimum dollar threshold for government projects available for foreign bidders. It would also cap the total amount that Canadian and Mexican companies can receive in American procurement contracts at what U.S. companies get in those countries.

Sources, with knowledge of the U.S. proposal, said the oil-rich Persian Gulf country of Bahrain would have greater access to bid on infrastructure and other government procurement work in the United States than Canada.

"It should be attributed for what it is. Shock value with a first offer and obviously it is unacceptable and they know that," a Canadian source, close to the NAFTA negotiations, told The Globe on Thursday.
Neither Canada nor Mexico will agree to an unfavourable deal. One wonders if the Americans are serious.
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Re: NAFTA Renegotiation

Post by twa2w » 29 Sep 2017 00:08

The Americans may very well be serious. Who can really tell with the Trump administration. If they are, I wouldn't bet on Canada and Mexico not signing an unfavorable deal. It may be better than the alternative. With the hope of renegotiation with a new president.

OTOH, negotiations may well drag out beyond Trumps term. Unless he gets a second term :shock:

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Re: NAFTA Renegotiation

Post by Shakespeare » 29 Sep 2017 00:36

The Mexicans have an election next year and will not be seen as kow towing to Trump. Neither is there any appetite for it here. Walking out leaves the treaty as is. Trump then has to withdraw and there is confusion as to what that will mean; it will wind up in US courts.Then the US Canada FTA is in effect.
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Re: NAFTA Renegotiation

Post by twa2w » 29 Sep 2017 02:25

Shakespeare wrote:
29 Sep 2017 00:36
The Mexicans have an election next year and will not be seen as kow towing to Trump. Neither is there any appetite for it here. Walking out leaves the treaty as is. Trump then has to withdraw and there is confusion as to what that will mean; it will wind up in US courts.Then the US Canada FTA is in effect.
I doubt the renegotiation will be done by the time the Mexican election is done.
No one wants to to be seen kowtowing to Trump or in any trade agreement and will try to spin and posture to show they are standing firm. But lets face it. Both Mexico and Canada need USA more than they need us( at least in Trumps eyes). Mexico may have to go with a so-so deal, rather than be shut out, and sell it to their voters.

That bit about the FTA being in effect seems to have conflicting opinions. . Some people seem to think it will be the case, others are not so sure. It can also be cancelled on 6 months notice.
I have not seen the actual documents, nor any subsequent agreements that may have happened since so will have to do some more research.
In either case would still be a huge opportunity for the lawyers and consultants to figure out all the issues of reverting back. Etc

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Re: NAFTA Renegotiation

Post by Shakespeare » 29 Sep 2017 02:57

The US is also subject to the WTO. The point is that neither Canada nor Mexico needs to accept a new NAFTA on overwhelmingly American terms.
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Re: NAFTA Renegotiation

Post by AltaRed » 29 Sep 2017 10:46

Shakespeare wrote:
29 Sep 2017 02:57
The US is also subject to the WTO. The point is that neither Canada nor Mexico needs to accept a new NAFTA on overwhelmingly American terms.
I trust the Mexicans and Canadians are smart enough, and have enough spine, to dig in if they have too. I can see a lot of disruption happening if this thing goes off the rails, (albeit I believe Congress will mitigate the WH's fanaticism ultimately. From a Canadian equity perspective, I tend to hold mostly those with large ex-Canada (and primarily US) operations. It may be time to scrutinize my asset list and see if I have a few in there which would be most vulnerable to export throttling by the USA.
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Re: NAFTA Renegotiation

Post by Rysto » 29 Sep 2017 15:21

I am unconvinced that the American negotiating position is serious in the sense that they actually expect us to accede to the demands. Instead I believe that Trump is looking for the deal to fail so that he can publicly proclaim that he tried to negotiate a "fair" deal for the US, but as negotiations have failed he has no choice but to withdraw from NAFTA.

I kinda feel that Canada needs to make reviving TPP a bigger priority than it has been. I'm not a huge fan of everything in the deal -- I'd love to see the intellectual property provisions left out now that the US is out of the deal, as they're the ones who insisted on them -- but given the uncertainty about free trade with the US right now, promoting free trade with more stable nations makes a lot of sense.

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Re: NAFTA Renegotiation

Post by ghariton » 29 Sep 2017 18:07

Rysto wrote:
29 Sep 2017 15:21
I kinda feel that Canada needs to make reviving TPP a bigger priority than it has been. I'm not a huge fan of everything in the deal -- I'd love to see the intellectual property provisions left out now that the US is out of the deal, as they're the ones who insisted on them -- but given the uncertainty about free trade with the US right now, promoting free trade with more stable nations makes a lot of sense.
I suspect that a TPP without the US will lose most of its attraction to the other participants. Compound that with the security uncertainties, and Chinese pressures for countries to join its own trading block rather than another.

Perhaps Canada's best bet is to negotiate a series of bilaterals, starting with Japan, then perhaps the United Kingdom (or what's left of it) and South Korea. The rumors around Ottawa are to the effect that the present government is focussed on bilateral deals with China, albeit the negotiations are being kept very quiet because it is felt that there would not be much public support for such deals.

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Re: NAFTA Renegotiation

Post by IdOp » 29 Sep 2017 23:10

Hasn't Canada won WTO rulings against the US in the past ... IIRC lumber? ... and they were ignored by the US ?

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Re: NAFTA Renegotiation

Post by kcowan » 30 Sep 2017 11:56

Yes the US imposed import tariffs and then the WTO ruled in our favour and then they stopped but they kept all those extra duties at least twice if not three times. They are playing the game.
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Re: NAFTA Renegotiation

Post by ghariton » 30 Sep 2017 14:26

IdOp wrote:
29 Sep 2017 23:10
Hasn't Canada won WTO rulings against the US in the past ... IIRC lumber? ... and they were ignored by the US ?
Indeed.

While the WTO helps, it is a slow, clunky, and time-consuming dispute resolution process. This is why something like the present Chapter 19 in NAFTA is so valuable. And this is why a new NAFTA, without a proper dispute resolution process, should be unacceptable to Canada, as Mr. Trudeau has said. It is on issues like these, not gender and aboriginal rights, that our negotiators should be focussed.

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Re: NAFTA Renegotiation

Post by Shakespeare » 13 Oct 2017 23:07

U.S. puts contentious NAFTA auto demands on the table - The Globe and Mail
Washington is proposing that vehicles contain at least 85-per-cent North American content and 50-per-cent U.S. content – whether the vehicles are made in Canada, Mexico or the United States – in order to qualify for duty-free trade, industry and government sources briefed on the negotiations said Friday.

Also included is a requirement that all parts and materials used in vehicle manufacturing be subject to tracing, to verify their origin, a move designed to make sure steel, aluminum and even dashboard clocks are produced in North America.

Analysts who are following the talks closely can't decide whether the U.S. proposals are part of a deliberate strategy to scuttle the talks, allowing the U.S. government to terminate NAFTA, or a bargaining tactic aimed at making sure the United States gets a bigger share of North American auto industry jobs.
Personally, I think the Trump administration is incapable of negotiating in good faith. :roll:
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Re: NAFTA Renegotiation

Post by Spidey » 14 Oct 2017 08:24

I'm not very optimistic about a deal, with a protectionist president who from past experience only appears satisfied with a win-lose outcome and a Canadian Prime Minister attempting to incorporate domestic, Liberal ideology into the agreement. The Americans may use Justin's demands to their advantage and the worst case scenario would be a horrible trade agreement that somehow includes some rather meaningless platitudes about gender equality and aboriginal rights in order to allow Justin to claim a win.

As much as I believe in free-trade, I hope they go by Stephen Covey's maxim of "win-win or no deal", with the mutual win being from a business/economic standpoint.
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Re: NAFTA Renegotiation

Post by Mordko » 14 Oct 2017 18:47

Spidey wrote:
14 Oct 2017 08:24
I'm not very optimistic about a deal, with a protectionist president who from past experience only appears satisfied with a win-lose outcome and a Canadian Prime Minister attempting to incorporate domestic, Liberal ideology into the agreement. The Americans may use Justin's demands to their advantage and the worst case scenario would be a horrible trade agreement that somehow includes some rather meaningless platitudes about gender equality and aboriginal rights in order to allow Justin to claim a win.
A very good point, except I wouldn't call this ideology "Liberal" in a true sense of the word. Essentially, both US and Canada came to negotiations with a bunch of protectionist proposals and special interest wish-lists. The list of stupid ideas seems endless, whether its minimum content by country of origin in a single product or minimum wage and general union craziness. Mexican government is the only one that is being reasonable. The citizens of US and Canada should be ashamed for the governments we elected to represent us.

Still, I am cautiously optimistic that both governments are sufficiently impotent (particularly Trump's administration) and that neither will achieve their objectives.

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Re: NAFTA Renegotiation

Post by Shakespeare » 17 Oct 2017 17:41

A good article; I will excerpt what I can:

Trump’s NAFTA plan is now clear, and Canada has to ride it out - The Globe and Mail
The U.S. administration's game plan is now clear: Make multiple outrageous demands that, even if partially accepted, constitute a huge "America First" victory; or, if rejected outright by Canada and Mexico, set up a failed negotiation and a messy denouement – also a win in terms of U.S. President Donald Trump's public antipathy to the North American free-trade agreement.

Mr. Trump will likely invoke the withdrawal clause from NAFTA....

....will likely lead to court challenges that culminate in a Supreme Court review....

...push back in Congress...

...ill will ....

...Canada and Mexico, participants in the original TPP, will forge ahead with a revival of that agreement among the other parties, including Japan....

...without much prospect for clarity on U.S. trade policy direction until after November, 2018....

we can spend greater time and effort in the intervening months pursuing better access to other important foreign markets.
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