Canada’s top official in Washington is refusing to say whether the finance and telecom sectors are off limits in North American Free Trade Agreement renegotiations.
“We’re at the beginning of the negotiations and I think it would be pretty unwise for me to talk about what we’re prepared to put on the table and what we’re not prepared to put on the table,” Ambassador David MacNaughton told reporters in Edmonton on Tuesday.
“I think drawing lines in the sand right now is not helpful to having a constructive negotiation.”
The United States is taking aim at telecom and banking, a pair of tightly-controlled portions of the Canadian economy, in the upcoming renegotiation of the free trade deal. And at least one Bay Street money manager is warning the trade talks could drag on for years if the Americans insist freeing up cross-border access in those sectors.
In an interview with BNN, Tim Regan, Managing Director at Kingwest & Company, said giving the U.S. room to maneuver into the space could be a slippery slope, as giving the U.S. telecoms an inch would likely result in them taking a mile.
“Room to maneuver would be a floodgate, it really would,” Regan said. “If we look at banking and telecom, they’re our sacred cow oligopolies.”
“We are monitoring the situation and discussing with our members,” wrote Canadian Wireless Telecommunications Association Spokesperson Sophie Paluck in an email to BNN. “We will want to ensure the Canadian wireless industry continues to thrive as a world leader.”
Regan said it remains to be seen how Canada and Mexico respond to the Americans’ desire for greater telecom access, given the U.S. is the first member of the tripartite agreement to outline its objectives.
“Really, the devil will be in the details in the next few years, it’s going to be give and take so we don’t really know [the details] right now,” he said. “It is really a shot at the telecom industry in Canada.”
Regan said he expects the incumbent telecom players to fight tooth and nail against any interlopers from south of the border, given the pushback against Verizon’s aborted foray into Canada in 2013.
“You can’t have the kind of profits they have, being wireless companies, without pushing back at competition,” he said.
Regan said he expects Canada to dig in its heels if the U.S. decides to force the issue on banking and telecoms, perhaps leading to protracted negotiations spanning a number of years.
“If they really want some of these things, it could drag on,” he said. “If they do go after telecom and banking, it could take years.”