Canadian trade more reliant on the U.S. today than before: Frank McKenna
Although the new North American Free Trade Agreement appears to be destined for ratification in Canada, one of the country’s former envoys to the United States says the “best friend” trading relationship between the two nations should no longer be a given.
“There’s nothing fair about this,” former Canadian ambassador to the U.S. Frank McKenna told BNN Bloomberg on Monday.
“The United States is not a reliable partner at present and it’s using its bully(ing) ability in order to push around everybody that it does business with. That means we’ve got to have as many other friends as we can.”
At the core of McKenna’s argument is the trade-exclusivity clause that would allow the U.S. to vet future agreements between Canada or Mexico and any non-market economy. McKenna – who was premier of New Brunswick for a decade and now serves as deputy chair, wholesale, TD Bank Group – said the phase-one trade deal China and the U.S. reached after the new North American pact was renegotiated will take a huge toll on the Canadian economy.
McKenna said that the US$100 billion-plus China committed to spending on American products – covering everything from aircraft to agriculture - will likely pull Chinese business from Canada’s agricultural industry.
“We call it ‘The China clause’ that was inserted at the last minute. It’s almost like a poison pill clause,” McKenna said. “Then the United States turns around and does a deal with China that effectively hurts the trading partners of the United States.”
McKenna said that means Canada needs to widen its net to find new trade partners around the world.
“We’re in quite a perilous position,” he said. “It’s a great achievement to get this agreement, but we live in a world now [that is] a protectionist world. And I think we’re going to have to do things to protect ourselves in that world, or else we’re going to be all by ourselves.”
As for the question of whether the deal can make it through the House of Commons, McKenna was unfazed.
“I think it’s largely been litigated and I think you can almost put a fork in it,” he said. “This is going to get through the House and it will be ratified.”