What happens if Donald Trump tears up the NAFTA trade deal – June 9, 2018
It’s been an eye-opening experience for me when I speak to other Canadians about economics, it appears that only the business people understand the ramifications the dissolving of the North American Free Trade agreement will have on businesses in Canada. If you haven’t done so yet, you’ll want to watch the video below titled Supply Management: Politicians milk system for votes where
Holly Nicholas explains why it’s time to end government controlled, taxpayer-subsidized supply management and let the free market reign.
Agriculture isn’t a topic that I get into too often, because in Canada, for the most part, Quebecers have been dominating it being that our Supply Management is most profitable in the province people are least likely to start a business in. Quebec is so socialist that even French-speaking Haitian economic migrants when given the opportunity to move, move to Ontario.
Why I say this is because for the most part if the NAFTA deal is torn up or turned into what many are calling Zombie NAFTA the Canadian economy may very well go into free fall. Here’s the thing big government, unions and socialist, Marxists thinkers alike have a hard time understanding. If there’s no free market to push around all the regulations you put in place to protect big businesses go into free fall. The moment your customer base shrinks or the moment you’re forced to compete in the free market, how you measured your costs to operate your business can no longer be forcibly forced back onto consumers.
In simpler terms what it means in a free market is that raising your prices to cover your expenses won’t always work anymore. In Canada in case people haven’t noticed what tends to happen in our dairy market are 2 things either prices rise or the product sizes shrink to cover inflation. In a free market, this is not what happens, in a free market if your company “A” is not as efficient as company “B” company “A” will go out of business. Currently in Canada, the only companies allowed to go out of business are the small family farms if your farm is big enough to get government subsidiaries in Canada, you’re safe and for the most part, this is how Quebec has managed to protect their agricultural sector. Government subsidiaries and the creation of regulations to keep America from selling in Canada, which in turn allow these unprofitable farms to be solvent.
Being that they’ve managed to wipe out small family farms in Canada, the reality is if Zombie NAFTA becomes a reality, this could become a national security issue for Canada. It’s important to understand where Trump got the Steel becoming a National Security issue for Americans from. This is the same law other countries have been using to keep American companies from selling to them. So if an American company as an example wanted to sell to Canada, and sell something cheaper than a Canadian company could sell it for a new law would be enacted to regulate the importing of that product into Canada. It’s hard explaining this Canada, but again I have to remind Canadians that this has been happening for years and Agriculture is only one of the places it’s been happening in.
What should also shock Canadians is that even with though the US dollar is more expensive for Canadians to buy, Amerian companies can still out-compete Canadian companies without the tariffs. This is something Canadians can only understand if they go to America and do some shopping. What the real problem is in Canada is that our education system since Pierre Elliot Trudeau has been built around socialist ideals, the Canadians media is also very socialist in Canada we have 4 Left-leaning political parties (Liberal, NDP, Greens, Quebecois) to 1 conservative party and because of this imbalance in many respects Canadian conservatives are at best centrists, I’ve often argued that the Conservative party of Canada does nothing more than Conserving and better managing Liberal policies.
With all that said what this really means, in my opinion, is Canada is heading for an economic crash, potentially a collapse. Did you notice that nowhere in this post did I even mention Canadian consumer debt? Most of these government regulation schemes are financed by major banks and if NAFTA turns into Zombie NAFTA, Canada is going to have some serious challenges ahead.