The surprises of the Trump administration just keeping coming, and frankly, sometimes they are welcome. In this case, we are talking about the sudden inclusion of Canada in the new trade agreement this administration is trying to cobble together in place of that old, hated pact referred to as NAFTA.
We, of course, are actually fans of the North American Free Trade Agreement. So we will take a minute to enjoy a little glee that Donald Trump now appears to be coming around to our point of view.
OK, that’s actually a bit of a stretch. The truth of it is that the Trump administration launched into this particular trade imbroglio on the promise (often dismissed by critics) that tossing the entire deal up into the air would serve as a good bargaining position. Count us among the skeptical about the soundness of such a strategy generally.
But in this specific case, the trade terms are being redrawn. And the new terms offer a few points to issue sighs of relief about. We’ll name just a few.
Throughout this process, the administration pushed for a sunset clause to the new trade deal of just five years. That would be very damaging because no multinational corporation would want to invest hundreds of millions of dollars if trade terms could change radically just about the time a new factory opened its doors. Thankfully, the deal that emerged sunsets in 16 years.
The dispute resolution of this agreement also has been streamlined in such a way as to make it less likely that foreign corporations could lodge complaints that are needlessly costly.
The revised deal also updates provisions on new technologies.
Trade deals are extremely complex, not least because now we will have to see how a number of multinational corporations reorder their supply chains. But the broad takeaway here is that we should be encouraged by the fact the Trump administration managed to open a door for Canada to walk through. Now let’s continue the project of expanding the American economy through a trading system that ensures North America rivals every other economic bloc in the world.
This article provided by NewsEdge.