I wrote 4,000 words on the trade deal formerly known as NAFTA, coincidentally roughly as long as the agreement itself. By my count, there were five turning points over the last year and a half that shaped the pact we have today. Its all detailed here theglobeandmail.com/business/artic…
Credit to illustrator @antonyhare for making a trade negotiation look like a Belle Époque literary salon
In the end, there are two major, and probably unanswerable, questions left on Canada’s strategy: Was it the correct move to play hardball at first and steadily concede, rather than making concessions early in a bid for a fast deal?
Some will argue that Canada missed opportunities, even before talks began, to placate Trump. Others will contend that had Canada done that, it would have given up leverage early and Trump would still have demanded more
The other is whether laying down Chapter 19 as a red line from the start was a good idea. The Canadians correctly gambled that Trump didn’t much care about it, and they could ultimately use it rhetorically to claim victory
But advertising it let the Americans know exactly what Canada’s vulnerability was, and gave them a temendous amount of leverage
Similarly, there are a few different explanations for why a deal suddenly came together last weekend after so many previous opportunities to close passed by
The one that makes the most sense to me: Because Lighthizer decided it was time — either because he’d extracted enough from Canada to be satisfied, or because he really was serious about closing before EPN leaves office
Either way: Lighthizer ransomed Chapter 19, knowing it was Canada’s red line, for 14 months of negotiations. When he conceded it, there was a deal within the day
Lastly: You can see the resulting deal as glass-half-empty or half-full. On one hand, Canada conceded on just about every trade dispute its had with the U.S. over the last decade, from dairy to Super Bowl commercials, while the U.S. gave up almost nothing
On the other, Canada either defeated or watered down all of Trump’s most protectionist demands, from 50 per cent U.S. content in autos to the end of dispute resolution to a vast expansion of Buy American procurement rules
Both interepretations are correct. In the end, Canada’s an export-based country parked next to the world’s largest economy — it can’t *not* have a free-trade deal. I suspect the Trudeau government felt this was the best one they could realistically get in the Age of Trump
