“NAFTA is the worst trade deal maybe ever signed anywhere.”
Those are the words of the man now at the helm of Canada’s biggest trading partner, worth nearly $900-billion a year in some estimates.
On the campaign trail, Donald Trump pledged to renegotiate the North American Free Trade Agreement, or pull the U.S. out of it completely if he didn’t get what he wanted.
So will he pull the trigger?
“We are in uncharted territory and to deny that would be dishonest,” says Keith Head with the UBC Sauder School of Business, adding there’s nothing to stop the U.S. from leaving NAFTA with six months notice.
Head says Trump is the ultimate wildcard, and that no one knows what he will actually do now that he’s taking office. But he says despite that uncertainty, he doesn’t think we’ll see change any time soon.
“My feeling is it won’t happen immediately because his advisers will beg him and plead him not to do something crazy right at the beginning of his presidency,” he said.
David MacNaughton, Canadian ambassador to the U.S. said earlier today that Canada would be prepared to negotiate should Trump opt to reopen NAFTA.
MacNaughton said that while Canada has been largely happy with the deal, any agreement can be improved, and hinted Canada could be interested in working softwood lumber into the deal.
BC in good shape
Head says B.C. would weather a sudden change better than other parts of the country.
“[America’s] normal duties are zero for most of the stuff that we export from B.C. to the US.”
That’s in contrast to Ontario, where manufacturing exports could take a big hit.
Last year B.C. exported $18-billion worth of goods to the US.
As for softwood lumber, Head says he thinks the issue is likely near the bottom of Trump’s list of priorities and won’t see much change in the near term.
With files from Liza Yuzda