Was It Practical To Kill The Negotiations Over The Sunset Clause?

[Centerpiece]

Why not negotiate the sunset clause instead of dismissing it outright. I could live with a 10 year sunset clause. Or perhaps include an agreed method of evaluating the Trade Balance so that if the balance is plus or minus 10% (or whatever) - it triggers a review. Perhaps both. Point is - negotiate to address the concern - whatever that may be.

[bush_cheney2004]

1 minute ago, Zeitgeist said:

...You're saying the U.S. won the wars because of its power, not moral purpose.   Britain was broke because it made massive sacrifices to fight a just war that the U.S. joined after it was attacked.  Britain was the first country to declare war on Germany.  That's a badge of honour in my books. 

 

Britain declared war after Poland was attacked, not Britain.   Make no mistake, WW2 in Europe was just a continuation of the monumental screw-up that was WW1, also a British imperialist debacle.    The U.S. did not declare war on Germany until after Germany had first done so after the Japanese attack on Hawaii.

Americans wanted no part of another imperialist British Empire war...Canada made the decision to join the Empire.  Hell, the largest ethnic group in the U.S. are descended from...Germans  (not British).

 

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With regard to Canada's position in Bosnia against Serbia and its actions in Haiti, the reasons for such involvement were moral and not only self-interested.  Yes, Canada has acted outside of the UN like the U.S. has and reserves that right.  The U.S. is locked into a massive military supply chain that it cannot break.  Military overspending in the U.S. is a problem.  As with the second amendment, the American people don't seem to see a way out of it.  I guess it's worth asking the question: If NATO is policing the world, whose messes is it cleaning up?  It's arguable that the U.S.'s allies have spent a hell of a lot of money supporting U.S. causes and cleaning up the fallout of U.S. policies.  I don't even question this anymore.  I think of the massive security fees Canadians spend on air travel, which were essentially a salve to the U.S. after 911.  We accept this as a reasonable price to pay in our relationship.  If Trump is counting costs and coming to a different tally on matters such as trade surpluses, maybe Canada needs to take a closer look at all of the costs. 

 

That is precisely my point here...Canada has made those and many more decisions that increase dependence on the U.S.

The U.S. will continue to pursue its nation state interests, just as it always has.   Sometimes in consort with allies, and other times not.   Trump is not any different in this regard compared to other U.S. presidents.   "Moral values" are a great cover story for raw military and economic power.

[Zeitgeist]

That sounds quite reasonable.  The problem with a sunset clause, especially every five years, is that it makes it very hard for companies and countries to do any long-term planning and investment.  Trade agreements are costly, messy, and hard to implement.  I would forget the idea of a sunset clause and instead have a process for addressing imbalances where and when they occur.  However, it has to be understood that it will never be a perfect balance.  On the whole it should be close, but there will be certain sectors with surpluses and some with deficits based on supply and demand.  Americans need cheap softwood and Canadians supply it.  Canadians need citrus and Americans grow it.  As for industries like steel and aluminum, those industries are so bilateral that it's not even worth separating the U.S. from the Canadian content.

[bush_cheney2004]

NAFTA already has a chapter for any partner to leave the agreement after six months notice.   Why is Trump the bad guy for proposing that he exercise the negotiated NAFTA agreement to leave ?   

[Zeitgeist]

 "Moral values" are a great cover story for raw military and economic power.

I would agree that this is the cynical position of the current president.  Might is right.  He's using U.S. power to bully other countries, but that's a losing game in the long run.  Even China has figured this out, which is why they're building infrastructure projects in Africa, forging trade agreements, and are starting to be taken seriously as an alternative moral authority.  That may seem absurd right now given China's human rights record, but that country is changing.  Trump doesn't even pretend that the U.S. has superior moral authority.  That's why he overlooks Putin's corrupt behavior.  Let's not forget that only one country has dropped nuclear bombs on another country.

Edited June 4, 2018 by Zeitgeist

[Zeitgeist]

Trump is free to drop NAFTA.  Canada is free to disagree with Trump's terms for its replacement.

[bush_cheney2004]

2 minutes ago, Zeitgeist said:

I would agree that this is the cynical position of the current president.  Might is right.  He's using U.S. power to bully other countries, but that's a losing game in the long run.  Even China has figured this out, which is why they're building infrastructure projects in Africa, forging trade agreements, and are starting to be taken seriously as an alternative moral authority.  That may seem absurd right now given China's human rights record, but that country is changing.  Trump doesn't even pretend that the U.S. has superior moral authority.  That's why he overlooks Putin's corrupt behavior.  Let's not forget that only one country has dropped nuclear bombs on another country.

 

It is not just the current U.S. president...American domestic and foreign policy history is defined by this longstanding reality.  

There is no superior moral authority, not even for Canada.

China is progressing by following the blueprint laid out by American foreign policy for the past 150 years.    The U.S. has done all the things that China knows it must master to run with the big dog (USA).

[bush_cheney2004]

3 minutes ago, Zeitgeist said:

Trump is free to drop NAFTA.  Canada is free to disagree with Trump's terms for its replacement.

 

Good, then we agree that Trump is not being unreasonable to leave NAFTA as provided for in the agreement, negotiated by Canada, Mexico, and U.S. over 25 years ago.

Why is Canada so adamant that there must be a "replacement" at all ?   (The previous FTA would be defaulted to.)

Why is NAFTA more important to Canada and Mexico than to the USA?

[Zeitgeist]

I can tell you're really impressed by this "big dog" idea.  I'm not, except where it leads to improved human development inside and outside of the U.S.  Power is not a virtue.  It's how power is exercised that matters.  Over time, people and money follow the wise use of power, which is why the U.S. is in for a decline if it doesn't perform better on the world stage.

[bush_cheney2004]

Just now, Zeitgeist said:

I can tell you're really impressed by this "big dog" idea.  I'm not, except where it leads to improved human development inside and outside of the U.S.  Power is not a virtue.  It's how power is exercised that matters.  Over time, people and money follow the wise use of power, which is why the U.S. is in for a decline if it doesn't perform better on the world stage.

 

I am not interested in false, "moral" underpinnings, as they are meaningless in the trenches.

The decline of the U.S. would be no different than the decline of Britain, or France, or Spain.   The U.S. will not continue to carry the burden for many other nations.

I suspect that Canada more acutely fears the loss of such a cozy relationship with a U.S. superpower that no longer exists.

It would force Canada out of it's economic and military comfort zone.   It has happened before (fall of British Empire).

[bush_cheney2004]

Why is Canada so adamant that there must be a "replacement" at all ?   (The previous FTA would be defaulted to.)

Why is NAFTA more important to Canada and Mexico than to the USA?

[Zeitgeist]

Well, Canada is a country in the process of serious expansion.  Not only does it have tremendous natural resources and a highly skilled, well-educated workforce, it is welcoming to immigrants, tolerant, and on the right side of history in terms of progressive policy.  Of course there are setbacks and controversies.  Pipelines are a sticking point with environmentalists and there are social ills that need to be addressed.  I'm more interested in seeing what new trade relationships and possibilities lie within Canada's own borders than in past achievements.  It's an exciting time for the country, which is still quite young.

[bush_cheney2004]

No other country in world has more landed immigrants than the U.S., about 20% of the world's total.  

Canada trails far behind on total immigrants, pipelines, and environmental regulation (Canada imports many standards from the USA, if only because of economic "harmonization".)

Presuming that U.S. policies will remain the same for Canadian expansion is a serious mistake...Trudeau just proved that.

 

Edited June 4, 2018 by bush_cheney2004

[Centerpiece]

1 hour ago, bush_cheney2004 said:

NAFTA already has a chapter for any partner to leave the agreement after six months notice.   Why is Trump the bad guy for proposing that he exercise the negotiated NAFTA agreement to leave ?   

For those who are interested, here it is:

Link: http://www.sice.oas.org/trade/nafta/chap-22.asp

[Zeitgeist]

I agree that we've adopted many good U.S. policies.  We're lagging the U.S. on some environmental protections, more progressive than the U.S. in some other areas.  As you know, it varies greatly also by state/province.  With regard to "trails far behind on total immigrants, pipelines, and environmental regulation," you must not look at numbers without context.  The U.S. has almost 10 times Canada's population.  Does it have more than 10 times the immigrants, pipelines, etc.?  This is why comparisons between the two countries break down.  It's apples vs. oranges.  The U.S. has the advantage of economy of scale that Canada is just beginning to experience.  As the population grows, Canada will become more self-sufficient.  It's incredible that such a vast land with such a small population has the infrastructure and institutions that it has.  The economy is also surprisingly diverse.  Really, it's the part of North America most poised for growth in the long term, and I'm sure the U.S. will want in on the investment.

[bush_cheney2004]

34 minutes ago, Zeitgeist said:

.... As the population grows, Canada will become more self-sufficient.  It's incredible that such a vast land with such a small population has the infrastructure and institutions that it has.  The economy is also surprisingly diverse.  Really, it's the part of North America most poised for growth in the long term, and I'm sure the U.S. will want in on the investment.

 

The U.S. has already been in on the investment...to the point of excess dependence on U.S. capital and export market. 

When commodity prices fall, so does the value of the CAD.

Canada wants equal access to the world's largest economy while providing far less in return opportunity, research, and development.

Edited June 4, 2018 by bush_cheney2004

[Zeitgeist]

U.S. investors have benefitted greatly in terms of purchasing power from a lower Canadian dollar.  The lower dollar has made our goods cheaper for consumers in other countries.  It used to help our exports.  Not anymore, as Canada has a large trade deficit despite having a low Canadian dollar right now.  With regard to the large amount of American investment, Canada does attract a lot of foreign investment.  China has taken a great interest in recent years, especially in sectors like oil and gas.  My guess is that the U.S. would rather see American investment in the oil sands than Chinese.  I'm sure the Canadian government has felt the same way.  Given the U.S.'s recent moves on trade, I'm not sure that Canadian sentiment will remain.  As I said before, countries are watching the U.S.'s moves closely right now and setting policy accordingly. 

One more thing: You said that Canada wants equal access to the world's largest economy, but do you appreciate that in exchange the U.S. has as much access to Canadian natural resources as Canadians have under NAFTA?  I'm not sure that's a good deal for Canada.  If Trump wants to put America first, maybe we should put Canada first and protect our resources.  Norway nationalized its oil and has benefitted greatly.  The royalties from oil have given that country's citizens tremendous wealth.  Maybe that's the best move for Canada.  Perhaps the government's acquisition of the Trans Mountain Pipeline is a good first step in this process.  Canada has the third largest oil reserves in the world.

Edited June 4, 2018 by Zeitgeist

[bush_cheney2004]

20 minutes ago, Zeitgeist said:

U.S. investors have benefitted greatly in terms of purchasing power from a lower Canadian dollar.  The lower dollar has made our goods cheaper for consumers in other countries.  It used to help our exports.  Not anymore, as Canada has a large trade deficit despite having a low Canadian dollar right now.  With regard to the large amount of American investment, Canada does attract a lot of foreign investment.  China has taken a great interest in recent years, especially in sectors like oil and gas.  My guess is that the U.S. would rather see American investment in the oil sands than Chinese.  I'm sure the Canadian government has felt the same way.  Given the U.S.'s recent moves on trade, I'm not sure that Canadian sentiment will remain.  As I said before, countries are watching the U.S.'s moves closely right now and setting policy accordingly.

 

Not anymore...many foreign investors are fleeing Canadian energy projects because of higher risks in Canada.   Even Canadian energy companies are leaving Canada to set up rigs in the U.S. because costs are lower and federal/state barriers are much lower.   The Chinese will take up some of the slack, but not all.   Canadian "sentiment" has led to the present over dependence on U.S. capital and export market.   Should have changed long ago...the U.S. sentiment is competition.

 

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One more thing: You said that Canada wants equal access to the world's largest economy, but do you appreciate that in exchange the U.S. has as much access to Canadian natural resources as Canadians have under NAFTA?  I'm not sure that's a good deal for Canada.  If Trump wants to put America first, maybe we should put Canada first and protect our resources.  Norway nationalized its oil and has benefitted greatly.  The royalties from oil have given that country's citizens tremendous wealth.  Maybe that's the best move for Canada.  Perhaps the government's acquisition of the Trans Mountain Pipeline is a good first step in this process.  Canada has the third largest oil reserves in the world.

 

Canada could have done that decades ago (higher royalties), but it lacked (and still lacks) enough domestic capital to exploit those resources.   Bitumen trades at a steep discount compared to light crude, and to make matters worse, there is regional fighting over pipeline access and terminals for export.    Then Trudeau wants to add carbon taxes. It is little wonder that the Americans dominated this sector for transport (pipelines) and refining.

Edited June 4, 2018 by bush_cheney2004

[Zeitgeist]

I agree that there are political challenges for Canada inside its borders for building pipelines across jurisdictions, but those can be resolved and the oil isn't going anywhere until it's extracted.  We have time and oil is a limited resource.  The Canadian government has enough capital to nationalize large swaths of the oil sands, natural gas, and the refining of oil (too much of which is done in the U.S.), but it has lacked the political will because of previous battles with Alberta when the National Energy Program was set up.  The Canadian government, don't forget, bought BP in Canada and started Petro Canada, which it later sold off.  It isn't too late and I'd love to see the revenue from oil production go directly to all Canadians.  We have been giving away our natural resources to foreign energy companies for far too long.  It would be easier for Canadians to weigh the economic value of energy production against environmental costs if the benefits of energy production accrued to Canadians.

[bush_cheney2004]

Canada has not effectively dealt with these challenges in the past, sometimes leading to conflict and separatist movements.   It is repeating again...Trudeau has repeated the sins of his father.   This is not Trump's or America's problem to solve...America does not wait for Canada to pursue American economic interests, including energy development.

Canada imports about 1 million bpd of oil and distillates from the U.S. and other nations in the east because of decisions made in the past.   Canada is responsible for Canada....not Trump, not the U.S.A, not anybody else.

[Zeitgeist]

I agree that Canada is responsible for Canada.  I hope America is responsible for America.

[bush_cheney2004]

6 minutes ago, Zeitgeist said:

I agree that Canada is responsible for Canada.  I hope America is responsible for America.

 

A problem for Americans to solve, who do not look to Canada for economic stability.

[betsy]

10 hours ago, Zeitgeist said:

 

Another problem is that the U.S. has meddled in so many countries,

Never mind other countries!   being an ally, you can say that we've meddeld too.

 

Trudeau meddled in US politics by doing a drive-by attack on Trump even as early as the Primary election.  He's still doing so, with his latest poke at Trump in a US university, right at a time when they were negotiating NAFTA!  Despite what he claims.......Trudeau isn't playing nice.

 

 

Edited June 4, 2018 by betsy

[betsy]

Trade war.   Every country for himself.

 

The question is:   Are Canadians prepared for the hurting?  For how long?

Edited June 4, 2018 by betsy

[turningrite]

I think a big assumption held by many is that Trump was actually interested in renegotiating the NAFTA. I suspect he's been biding his time until killing the deal would provide him maximum political currency. With the U.S. midterm elections approaching, that time is probably quickly approaching. Only about one-quarter of Americans believe NAFTA benefits their country and support here isn't much more than paper-thin. More Canadians are afraid of the disruption that will be caused if the pact is terminated than are positive about its actual benefits. Our politicians simply haven't been honest with us about this.

I voted against the original FTA proposed by Mulroney in the 1980s, believing it would hollow out Canada's industrial economy, and it and the NAFTA have largely served to do so. What's left of the Canadian economy has adapted to the NAFTA environment, to which many still cling as the only hope for prosperity. But is  it? In his articles on the subject published in the Toronto Star, Thomas Walkom has noted that the NAFTA arrangements haven't always been beneficial to Canada and in many aspects will be replaced by WTO rules, which will remain in effect. Personally I won't grieve the demise of the NAFTA.