Should Canada play the long game with Trump?

[bush_cheney2004]

1 minute ago, Machjo said:

On the psychological front, Trump will feed anti-US sentiment for at least a few decades until it heels. In the mean time, maybe even for the next few decades, the US could find itself in a far more ineffective NATO as a result of hard feelings. For at least the next few decades, the US might find other countries more willing to play hard ball with it in trade negotiations while being more willing to lower barriers between each other. This could isolate the US relatively speaking for the next few decades. Trump does not understand human psychology. He does not understand how a person or a nation reacts to public humiliation. People and nations will react to save face, and not always in a healthy manner.

 

This is not inconsistent with Trump's objectives....he has specifically called for less of the "post WW2 burden" to preserve rules based order on mostly the U.S. dime.    America cannot sustain current levels of deficits and growth in national debt.     The U.S. is not a large export economy as a percentage of GDP compared to a nation like Canada.

Chrystia Freeland has repeatedly pounded the U.S. to continue paying the most in blood and treasure to preserve the favourite topic in her book, including human rights.   Trump, Obama , and other presidents have repeatedly pointed out that NATO members like Canada and Germany have refused to raise defence spending to agreed levels (2% of GDP).

[paxamericana]

14 minutes ago, Machjo said:

Trump does not understand human psychology. He does not understand how a person or a nation reacts to public humiliation. People and nations will react to save face, and not always in a healthy manner.

That is so canadian of you to say this. You guys are so sensitive to other's opinion. But if i'm honest, if we cared about what everyone else think of us a lot of things would not get done. This is the fundamental difference between Canadians and Americans. And that is why we are the most revolutionary force of democracy. The world belong to the brave and those who take risks. 

Edited June 16, 2018 by paxrom

[bush_cheney2004]

3 minutes ago, Machjo said:

I'll take a more basic example. Imagine a high-school bully beating up a weaker kid in the school yard. He might be stronger and might win the fight. But other kids in the yard will notice it, fear him, and so distance themselves from him and interact with one another instead. Trump promoting fear of the US does not help the US in the long run. Maybe in the short term, but not in the long term.

 

History says otherwise....the U.S. grew and thrived during generations of "bully" foreign policy, military interventions, and economic hegemony.

What the U.S. cannot stop is the change in global players and emerging economies.

[Machjo]

7 minutes ago, paxrom said:

That is so canadian of you to say this. You guys are so sensitive to other's opinion. But if i'm honest, if we cared about what everyone else think of us a lot of things would not get done. This is the fundamental difference between Canadians and Americans. 

In Canada, there is a legitimate fear. I support unilateral free-trade (not to be confused with multilateral or even bilateral free trade), but on the principle of good will. Trump has no good will as proved by his belligerence. This raises the question of if we give in to one demand, will he just make another and another and another?

That's one thing I would like about unilateral free trade: we could unilaterally drop our tariffs to the world and then show Trump the proverbial finger. No trade agreement with that fool, just unilateral free trade with the world. With multilateral or even bilateral free trade, we'd never get anywhere since each time we'd give an inch he'd ask for another mile. He will always push and push and push until his demands become intolerable to any reasonable person. He's just not the kind of person worth wasting Canada's time and energy to negotiate with. That's why I like the idea of unilateral free trade and then letting Trump do whatever the hell he wants to do.

 

We don't need an agreement with you. You go your way and we go ours.

 

 

Edited June 16, 2018 by Machjo

[bush_cheney2004]

2 minutes ago, Machjo said:

We don't need an agreement with you. You go your way and we go ours.

 

Non-starter, because Canada has specifically made itself so dependent on not just U.S. trade, but U.S. capital investment.   Americans own 50% of Canada's manufacturing base, and a large portion of foreign owned bitumen/oil production.   Yes, give the Americans the finger if it makes you feel better, but then come back to economic reality.

[paxamericana]

4 minutes ago, Machjo said:

In Canada, there is a legitimate fear. I support unilateral free-trade (not to be confused with multilateral or even bilateral free trade), but on the principle of good will. Trump has no good will as proved by his belligerence. This raises the question of if we give in to one demand, will he just make another and another and another?

That's one thing I would like about unilateral free trade: we could unilaterally drop our tariffs to the world and then show Trump the proverbial finger. No trade agreement with that fool, just unilateral free trade with the world. With multilateral or even bilateral free trade, we'd never get anywhere since each time we'd give an inch he'd ask for another mile. He will always push and push and push until his demands become intolerable to any reasonable person. He's just not the kind of person worth wasting Canada's time and energy to negotiate with. That's why I like the idea of unilateral free trade and then letting Trump do whatever the hell he wants to do.

 

We don't need an agreement with you. You go your way and we go ours.

 

 

Actually this is exactly what I suspect Trump will do. First raise tariff then suddenly drop them out of good will allowing people to save face and then coming to an agreement. 

[Machjo]

Just now, bush_cheney2004 said:

 

Non-starter, because Canada has specifically made itself so dependent on not just U.S. trade, but U.S. capital investment.   Americans own 50% of Canada's manufacturing base, and a large portion of foreign owned bitumen/oil production.   Yes, give the Americans the finger if it makes you feel better, but then come back to economic reality.

That's why I've proposed unilateral free trade with the world. That way, without needing to actually negotiate an agreement, Canadian consumers could still access US products and services. Should the US raise tariffs on all Canadian products, that would just push the CAD down relative to the USD until an equilibrium is reached at which point we could start to export to the US again while Canadians would just buy less from the US. We'd hurt, but we would adapt eventually and would not need an actual agreement with the US.

[bush_cheney2004]

1 minute ago, Machjo said:

That's why I've proposed unilateral free trade with the world. That way, without needing to actually negotiate an agreement, Canadian consumers could still access US products and services. Should the US raise tariffs on all Canadian products, that would just push the CAD down relative to the USD until an equilibrium is reached at which point we could start to export to the US again while Canadians would just buy less from the US. We'd hurt, but we would adapt eventually and would not need an actual agreement with the US.

 

OK, but that is not much different for the previous FTA/WTO rules based trade order.   There are several realities on the ground (pun intended) that prevent Canada from getting products and services to the rest of the world.   Some of these limitations are self inflicted (e.g. oil pipelines).

[Machjo]

3 minutes ago, bush_cheney2004 said:

 

OK, but that is not much different for the previous FTA/WTO rules based trade order.   There are several realities on the ground (pun intended) that prevent Canada from getting products and services to the rest of the world.   Some of these limitations are self inflicted (e.g. oil pipelines).

It's still slightly different though since Canada would go beyond the WTO rules to essentially unilaterally drop all trade barriers to the world. Of course this would mean Canada needing to abandon its sacred cows.

Edited June 16, 2018 by Machjo

[bush_cheney2004]

2 minutes ago, Machjo said:

It's still slightly different though since Canada would go beyond the WTO rules to essentially unilaterally drop all trade barriers to the world. Of course this would mean Canada needing to abandon its sacred cows.

 

Understood, but Canada cannot take advantage of such a trade scheme for logistical and market reasons.  

Other nations besides the U.S. are not just going to roll over on trade barriers just because Canada has done so.

[Machjo]

1 minute ago, bush_cheney2004 said:

 

Understood, but Canada cannot take advantage of such a trade scheme for logistical and market reasons.  

Other nations besides the U.S. are not just going to roll over on trade barriers just because Canada has done so.

They wouldn't need to. Even without reciprocity from the rest of the world, unilateral free trade on Canada's part would make imports less expensive. When we think of imports, we often mistakenly think of end-consumer products only. What we often forget is that manufacturers import too. They import parts, tools, machinery, software, etc. etc. etc. Unilateral free trade would give our manufacturers cheaper access to these and so allow them to produce more cheaply too.

 

Of course without a trade agreement, a protectionist US president could react to this trade advantage of Canada's by just raising tariffs against Canada. This however would make it more expensive for US factories to import the tools, machinery, parts, etc from around the world to make them more efficient. Canada would hurt, and hurt a lot no doubt. But once Canada eventually adapts to unilateral free trade, it would then become more difficult for other countries to hurt it later on.

[bush_cheney2004]

1 minute ago, Machjo said:

They wouldn't need to. Even without reciprocity from the rest of the world, unilateral free trade on Canada's part would make imports less expensive. When we think of imports, we often mistakenly think of end-consumer products only. What we often forget is that manufacturers import too. They import parts, tools, machinery, software, etc. etc. etc. Unilateral free trade would give our manufacturers cheaper access to these and so allow them to produce more cheaply too.

 

Wouldn't work well for many sectors, as allegations of dumping and other trade protocols would be fouled (e.g. intellectual property, "cultural" protections, etc.).

 

Quote

Of course without a trade agreement, a protectionist US president could react to this trade advantage of Canada's by just raising tariffs against Canada. This however would make it more expensive for US factories to import the tools, machinery, parts, etc from around the world to make them more efficient. Canada would hurt, and hurt a lot no doubt. But once Canada eventually adapts to unilateral free trade, it would then become more difficult for other countries to hurt it later on.

 

Maybe, but again we are back to focusing too much on the USA.   It is too U.S. centric for a solution to a problem.

[Machjo]

3 minutes ago, bush_cheney2004 said:

 

Wouldn't work well for many sectors, as allegations of dumping and other trade protocols would be fouled (e.g. intellectual property, "cultural" protections, etc.).

 

 

Maybe, but again we are back to focusing too much on the USA.   It is too U.S. centric for a solution to a problem.

How would unilateral free trade be too US-centric? It just involves Canada unilaterally dropping all intentional trade barriers against the rest of the world with no expectation of reciprocity. Hong Kong, Singapore, and New Zealand have done so and look at their economies today.

 

I suspect too that most US residents are more rational and fair-minded than their president. With that, I'm confident that if Canada adopted unilateral free trade, many in the US congress might choose to unilaterally reciprocate at least in part without any formal agreement.

Edited June 16, 2018 by Machjo

[bush_cheney2004]

5 minutes ago, Machjo said:

How would unilateral free trade be too US-centric?

 

Because your proposal is presented in the context of the present CanAm trade spat...a reaction to Trump.

Would you have proposed it regardless of existing trade conditions and partnerships ?

 

Quote

I suspect too that most US residents are more rational and fair-minded than their president. With that, I'm confident that if Canada adopted unilateral free trade, many in the US congress might choose to unilaterally reciprocate at least in part without any formal agreement.

 

Don't count on that...the U.S. is ten time the market size of Canada with a lot more competing interests at local, state, and federal levels.

[Machjo]

Just now, bush_cheney2004 said:

 

Because your proposal is presented in the context of the present CanAm trade spat...a reaction to Trump.

Would you have proposed it regardless of existing trade conditions and partnerships ?

 

 

Don't count on that...the U.S. is ten time the market size of Canada with a lot more competing interests at local, state, and federal levels.

I do support unilateral free trade independently of this trade spat. And I'm still not convinced that Americans in general are that malevolent. I suppose I could see US governments raising tariffs whenever they have a trade deficit with Canada and then dropping them once trade is balanced again. Canada would just need to keep its cool at those times and let the US do what it wants Since we'd have no trade agreement but just unilateral free trade, there would no contract for the US to respect. Trump and his supporters are the problem, not the US people.

[bush_cheney2004]

1 minute ago, Machjo said:

I do support unilateral free trade independently of this trade spat. And I'm still not convinced that Americans in general are that malevolent. I suppose I could see US governments raising tariffs whenever they have a trade deficit with Canada and then dropping them once trade is balanced again. Canada would just need to keep its cool at those times and let the US do what it wants Since we'd have no trade agreement but just unilateral free trade, there would no contract for the US to respect. Trump and his supporters are the problem, not the US people.

 

Again....too focused on what the U.S. would or would not do.   Unilateral free trade would only work for global markets, regardless of the USA.  

Americans in general are not so personally invested in trade policies....if I wanted to boycott Canadian products/services, I can't think of one off hand to stop buying.   There is no "Heinz ketchup" equivalent rally cry for Americans to vent their anger at Canadian policies, because the U.S. is not so dependent on Canadian imports/exports.

[Machjo]

1 minute ago, bush_cheney2004 said:

 

Again....too focused on what the U.S. would or would not do.   Unilateral free trade would only work for global markets, regardless of the USA.  

Americans in general are not so personally invested in trade policies....if I wanted to boycott Canadian products/services, I can't think of one off hand to stop buying.   There is no "Heinz ketchup" equivalent rally cry for Americans to vent their anger at Canadian policies, because the U.S. is not so dependent on Canadian imports/exports.

Well the US is our biggest trading partner and probably would remain so even if Canada adopted unilateral free trade with the world.

[bush_cheney2004]

Just now, Machjo said:

Well the US is our biggest trading partner and probably would remain so even if Canada adopted unilateral free trade with the world.

 

See ?   We are back to the root of the problem.   Until that changes, Canada will continue to chase its tail on trade.

The reason Americans don't/won't get upset at Canada so readily is because it doesn't matter as much.

 

[Machjo]

1 minute ago, bush_cheney2004 said:

 

See ?   We are back to the root of the problem.   Until that changes, Canada will continue to chase its tail on trade.

The reason Americans don't/won't get upset at Canada so readily is because it doesn't matter as much.

 

True. One advantage with unilateral free trade would be that Canada could diversify its markets at least somewhat more than it has so far. Also, it doesn't have to be all or nothing. Hong Kong, Singapore, and New Zealand have adopted unilateral free trade yet still participate in multilateral trade agreements. It's just that the dynamics of the negotiations are different. for example, when Canada negotiates with another country, it might talk about Canada dropping tariffs on X if the other country drops tariffs on Y. Hong Kong and Singapore can say 'we've already dropped all intentional trade barriers against you, so what can you do in reciprocation?'. Hong Kong and Singapore can also more quickly bypass discussions on tariffs and other intentional trade barriers in trade negotiations and just jump instead to discussing unintentional trade barriers like incompatible product or service standards for example.

 

Should Canada adopt unilateral free trade, it could still participate in trade negotiations with other jurisdictions around the world but would just now be in a position to jump straight to negotiating how to remove unintentional trade barriers.

[paxamericana]

40 minutes ago, Machjo said:

 

 

I suspect too that most US residents are more rational and fair-minded than their president. With that, I'm confident that if Canada adopted unilateral free trade, many in the US congress might choose to unilaterally reciprocate at least in part without any formal agreement.

not if we drop them first! 

[bush_cheney2004]

7 minutes ago, Machjo said:

Should Canada adopt unilateral free trade, it could still participate in trade negotiations with other jurisdictions around the world but would just now be in a position to jump straight to negotiating how to remove unintentional trade barriers.

 

Sure, but the devil is in the details.   Non-tariff trade barriers are more pervasive and difficult to remove than simple tariffs/duty.

Trade barriers have a long and complex history in the world as nations and trade zones seek some kind of advantage.   Also, there are other factors impacting the very nature of trade in goods and services that are out of the control of traditional barriers.

[Machjo]

Just now, paxrom said:

not if we drop them first! 

You'll obviously need a new president before that happens obviously. Unfortunately, we'd need a new PM too. And even more unfortunately, it would have to be someone other than one of our present major party leaders.

But yes, I hope Canada just adopts unilateral free trade and let the US tariff us to its heart's content. It might be painful initially. But once our economy would have adapted to it, it would then be more difficult for the US to try to hurt our economy with tariffs later.

[paxamericana]

1 minute ago, Machjo said:

You'll obviously need a new president before that happens obviously. Unfortunately, we'd need a new PM too. And even more unfortunately, it would have to be someone other than one of our present major party leaders.

But yes, I hope Canada just adopts unilateral free trade and let the US tariff us to its heart's content. It might be painful initially. But once our economy would have adapted to it, it would then be more difficult for the US to try to hurt our economy with tariffs later.

LOLS that's what the US has been doing since the marshal plan. That's why we're immune  to such things. 

[Machjo]

4 minutes ago, bush_cheney2004 said:

 

Sure, but the devil is in the details.   Non-tariff trade barriers are more pervasive and difficult to remove than simple tariffs/duty.

Trade barriers have a long and complex history in the world as nations and trade zones seek some kind of advantage.   Also, there are other factors impacting the very nature of trade in goods and services that are out of the control of traditional barriers.

True. But if a country is too busy defending agricultural tariffs and subsidies for example, then the negotiators are left with little time to negotiate non-tariff barriers and subsidies. If Canada unilaterally drops all tariffs and subsidies, then in future trade agreements, its negotiators can cut straight to the chase in non-tariff barriers.

Edited June 16, 2018 by Machjo

[bush_cheney2004]

2 minutes ago, Machjo said:

True. But if a country is too busy defending agricultural tariffs and subsidies for example, then the negotiators are left with little time to negotiate non-tariff barriers and subsidies. If Canada unilaterally drops all tariffs and subsidies, then in future trade agreements, its negotiators can cut straight to the chase in non-trade barriers.

 

Canada has another layer to the issue that goes beyond international trade barriers...provincial barriers are just as bad, and then there is Quebec.