Trade talks a dicey situation, Coyne says

Winnipeg | CNS Canada — With Canada in the midst of negotiations for two different trade agreements, the North American Free Trade Agreement and Trans-Pacific Partnership, trade concerns are getting muddled, according to Andrew Coyne.

“We need to be conscious of diversifying our trade interests beyond just North America. It would be extremely foolish that we allow (TPP) to fail and particularly (if) we were an instrumental part of that failure,” the National Post columnist told the Grain World conference Wednesday.

TPP is in a precarious position following Prime Minister Justin Trudeau’s failure to attend a negotiation talk in Japan earlier this week. Coyne is concerned Canada is getting too wrapped up in a “fortress North America” mentality.

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“We can have a lower rule of origin for TPP than we do in NAFTA and there’s nothing wrong with that. It may annoy Donald Trump, but who cares,” Coyne said.

NAFTA negotiations haven’t been going the best either, with Canada and Mexico having to familiarize themselves with U.S. President Donald Trump and his style of government.

Trump’s policies “are impossible to predict, partly because he doesn’t have many, or if he does he changes his mind depending on who he talked to last. He’s deeply ignorant with every major policy issue,” Coyne said.

His threats to do away with NAFTA are a concern, but Coyne said it’s not clear if he actually can get rid of the trade agreement. Trump may be able to give notice of withdrawing from NAFTA, but he would still have to repeal all the legislation enabling NAFTA.

“It’s far from clear that he can actually make good on this threat. But nevertheless it’s not entirely impossible and we have to be aware of it and we have to be frankly willing to entertain that possibility,” Coyne said.

If NAFTA is trashed it’s not clear exactly what would happen. Canada could revert to the original Canada/U.S. Free Trade Agreement, which Coyne said would be “bearable.”

“This is a government, a president that just fundamentally doesn’t believe in free trade. You look at some of the demands in the negotiating table, they’re preposterous,” Coyne said.

The rule of origin and the five-year sunset clauses have made for difficult negotiations, according to Coyne. As well, ending the Chapter 19 dispute resolution would be a huge loss as it was one of Canada’s biggest gains in NAFTA.

But Canada isn’t completely blameless in the negotiations, according to Coyne. Canada’s protectionist views have been put on full display throughout the rounds of negotiations.

“We’ve come to the table with some ridiculous demands of our own… mindful of new things that will appeal to (the government’s) Liberal constituencies,” Coyne said.

It’s farfetched to demand a climate change, Indigenous or gender chapter from Trump, Coyne said.

“There’s been a lot of showboating and I would say unrealistic demands on both sides. And there are some concessions we should make; if they want us to get rid of supply management I would sign up as fast as I possibly could,” he said.

— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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Ashley Robinson writes for MarketsFarm specializing in grain and commodity market reporting.

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