The Two Key NAFTA Issues On Table To Bring Canada Back – September 05, 2018
It appears that Trudeau’s Liberals aren’t budging when it comes to NAFTA and I’ve always been okay with that, however, Canadians should know that if Trump is serious about implementing tariffs on Canada, what Trump will be setting is a precedence for tariffs on Canadian goods to be the new norm. Which ultimately equates to uncertainty to the private sectors who does business with the United States. Now, these trade wars don’t usually show up right away, in fact, it could be a few years before the actual impact is felt by the Canadian economy. Recently the CBC made a post based on factual data that stated that the Canadian trade deficit shrunk in July 2018 you can click the link below to read it for yourself
Canada’s trade deficit shrinks in July, surplus with U.S. highest since 2008
With that said, those of us in the private sector know that businesses will often overly prepare themselves if they believe there’s a war looming, so there’s a good chance that those numbers reflect the possibility of uncertainty on both sides of the border. It’s important to know that Canada and the U.S have very integrated economies, my argument to our economies being so integrated however has been that both Canada and the United States have similar cultures and speak the same language.
Canada’s most socialist province of Quebec in many respects, primarily because of protectionism has built it’s economy on advantages levied by the Canadian government, which in a way gives them a competitive advantage in Canada in some areas such as agriculture for example. With that said if trumps hope to make trade fair for his country is successful Canada as a whole will have to re-think how we structure our economy and unfortunately for Canadians it’s not as simple as it seems.
To read more about some key issues on the Table regarding NAFTA trade talks consider clicking the link below written by Michael von Massow of the International Business Times:
My view regarding NAFTA is that if Canada let NAFTA we’d be forced to grow up as a country. Canadians may not be able to understand this but most of the luxuries we take for granted today come via NAFTA, a lot of the social and public services we enjoy today come via NAFTA. Canada is often used as a model for the Democratic Left in the United States to mimic and oddly enough if you pay close attention to Trump’s populous policies a lot of his policies are embraced by the Democrats. had it not been for Trumps brandish personality most Republicans would consider Trump to be a Democrat.
What Trump is actually creating is an ideal economy for a future democratic president, with the exception of Trump’s stance on health care and rebuilding the military everything else mirrors Democratic policies. No, where in Trump’s vision of America is decreasing in spending on the table, instead what Trump hopes to accomplish is to maximize the earning potential of Americans to pay for their deficit. You know what? When it comes to fiat, a central bank controlled economy Trump has a good point. From a bartering perspective Trump is creating a future disaster, however, the keyword is a future disaster.
Supply Management & the Quebec sovereignty movement
The problem Americans may face in the future if Trump has his way is the same problem we as Canadians are dealing with today, which is government regulated competition. One of the reasons Trudeau’s Liberals refuse to put Supply management on the table is because Supply management has made our agricultural sector uncompetitive which is why it’s been getting a cultural exemption from competition. Don’t forget that if Canada gets rid of supply management what might happen? Well, the Quebec sovereignty movement might be reignited.
Now, do you see why the Conservatives joined forces with the Liberals for Supply management? Now, do you see why I’ve been saying that it’s better the Canadian economy crashes now, rather than later? Now, do you see why politically all parties are screwed and possibly why Maxime Bernier removed himself from the Conservative party? Everyone in Quebec sees what’s happening, it’s no secret, socialism can work if there’s cash cow to milk when socialism doesn’t work is when Moses throws the golden calf into the fire.
Quebec’s economy doesn’t work without these subsidies, the problem is how do you explain this to them when it has been providing for them? These are the disasters caused by government interference. When you spoil a child, one day that spoiled child is going to grow up and be able to challenge you with facts. In the case of Quebec, they can make the argument to any political party that these government programs have been working and we don’t want to let them go, and if you take them from us we might consider returning to our old ways!
You see in a free market system, flawed ideas are allowed to get exposed when government intervenes and a change agent like Trump comes onto the scene, as a politician you can either tell people the truth or hope everything works out. Hey, sometimes things simply work themselves out and in this instance that’s the position Trudeau’s Liberals find themselves in. It’s poker face time for Trudeau and unfortunately, in case Canadians haven’t noticed the Democrats have been rather quiet regarding NAFTA talks.
The Democrats will cause an uproar regarding the wall but for some odd reason, the Democrats haven’t been as outspoken regarding NAFTA and Tariffs. If you know anything about Tariffs, you’ll know that the Democrats see tariffs as a means to pay for their own social justice programs, which in turn may cause uncertainty in Canada’s private sector. Canada can pretend all it wants, however, if Canada wants to do more international trade we’re going to have to take a look at our regulatory environment. The one area of Trump’s America that often gets overlooked by Politicians who’ve never been active participants in the private sector is the regulatory cuts made by the trump administration.
Regulations are a huge topic for business people because regulations have to do with costs when a business knows it costs it can better formulate a business plan. The one major mistake of Democrats and leftists in Canada is that they don’t understand regulations. I also find that most people in the financial sector can’t comprehend regulations either, which is why in my opinion Bill Morneau can’t wrap his head around why Paul Martin created loopholes for small businesses who incorporate. If there are too many regulations or if too many regulations are subjective and likely to change a lot of businesses simply won’t exist, a lot of investments simply won’t be made.
Doctors in Ontario as an example have tight margins, however, if a person in finance were to simply look at the numbers he’d assume the doctor is getting huge profits when you’re dealing with people and subjective regulations most business people simply won’t take the risk. Because Trump spent over 50 years in the private sector building things, this is something he understands instinctively.
When you’re designing an apartment building there are tons of domestic regulations that are often undermined by foreigners, in Canada as an example Canada Post a Crown Corporation can make deals with other countries and larger corporations in Canada that the small businessman can’t be a part of. Now, unless you’re in business and victimized by this unfairness you’d never be able to comprehend this. This is just one of the reasons why I think the canadian economy is in some serious trouble and why we may want to reconsider our reglatory environment.
Interesting times ahead.