Rohinga Crisis

Helping the Rohingya refugees is a real demonstration of the Trudeau government’s commitment that “Canada is back.” Canada alone cannot solve the Rohingya situation, but by keeping the international spotlight on their plight, as we did at the Commonwealth summit and G7 foreign ministers meeting, we significantly increase chances that they can eventually return home.

We need to maintain this focus at the Charlevoix G7 summit in Quebec. As host, Prime Minister Justin Trudeau should invite Bangladeshi Prime Minister Sheikh Hasina and Myanmar Foreign Minister Aung San Suu Kyi to explain what is going on. Nobel laureate Suu Kyi’s apparent indifference to the Rohingya is disheartening.

Bob Rae’s report, “Tell them we’re Human,“ is the right roadmap for further Canadian action. His recommendations include stepping up our aid and looking at resettlement options. Aid agencies such as Unicef Canada – more than half of the displaced are children – are already on the scene. While the Bangladesh camps have been in place for decades, the current crisis has more than quadrupled the number of refugees. Well over a million, they outnumber the local population. As Mr. Rae underlines, our support must also go to the host community.

The Rohingya exodus is another piece in a growing mass movement of people. According to the UN High Commissioner for Refugees, we are now witnessing the highest levels of displacement on record. Much of the new movement is borne out of civil war – Syria, Afghanistan, Iraq, Yemen – accentuated by flood, famine and pestilence. This is hard to repair and requires generational effort.

The Rohingya exodus recalls the ethnic cleansing that took place in the Balkans with the collapse of Yugoslavia. Yet Myanmar was on the road to success with its economy growing and nascent representative government. Instead, Myanmar’s military, the junta that grudgingly stepped aside in 2015, are still pulling the strings. Emboldened by rearmament, supplied by China and Russia, they appear ready for armed confrontation with Bangladesh.

As with any crisis there are winners and losers. The million-plus Rohingya people, camped in canvas huts spread over red dirt hills around Cox’s Bazar are the biggest losers, as is graphically portrayed in this year’s Pulitzer prize-winning photo. The 600,000 Bengalis in the district are also losers. Their local economy is shattered, straining public confidence in a Bangladesh government that faces an election in December.

Bangladesh has made remarkable progress in poverty reduction. It aspires to reach middle-income status by its 50th anniversary in 2021. The hurdles to get there include its poor infrastructure and climate change. Rising waters threaten to displace a population equivalent to that of Canada.

The “winners,” at least for now, are members of the former Myanmar junta, now operating from key cabinet positions. If they get their way, then democratic reform in Myanmar will be the next loser. Without international pushback, the fraying norms of the liberal international order take another hit. Mr. Rae recommends applying sanctions.

A solution to the Rohingya problem will require neighbouring countries, especially China, to step up and put pressure on the Myanmar military. Chinese President Xi Jinping says that China is retaking its place as a responsible great power, and he points to China’s significant contribution to peacekeeping operations. He needs to act now on the Rohingya crisis.

Islamic nations must also help their co-religionists. Their upcoming May foreign ministers’ summit in Dhaka is a moral test. More than 60 per cent of the displaced come from Muslim-majority countries, and the Gulf states in particular could do more to help.

Having taken on the cause of the displaced Rohingyas, the Trudeau government must keep shining a light on what UN High Commissioner for Human Rights Zeid Ra’ad Al Hussein calls “a textbook example of ethnic cleansing.”

In a world in disarray, Canada can be helpful fixers. It means identifying niches: Hosting the Vancouver meeting on North Korea to help contain nuclear proliferation and working with hemispheric partners on the Venezuelan crisis. It means using special envoys such as Mr. Rae. Following through is vital, as we now need to do with the Rohingya. This is how we demonstrate that “Canada is back.”

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A New Trade Agenda for Canada

JSGS Policy Brief

The Policy Brief is a digital and print publication, written by Johnson-Shoyama Graduate School (University of Saskatchewan and University of Regina) scholars and leading policy experts, to provide context and perspective on important public issues and to further discussion and debate within the public sector. It provides policy makers and those interested in policy formation with timely and expert analysis, observations and potential policy approaches to relevant issues concerning the public.

Ensuring prosperity: A new Canadian trade agenda

Trade is a cornerstone of Canada’s economy and society. The very idea of Canada was formed on the need to create a union based on trade and commerce.

The Case for Trade

Trade is a cornerstone of Canada’s economy and society. The very idea of Canada was formed on the need to create a union based on trade and commerce. The fathers of Confederation agreed to reduce inter-provincial trade barriers as part of creating a nation because they knew it would help the promotion of Canadian exports and attraction of the foreign investment necessary to build factories and finance the railways to transport our goods to market. Today, virtually every aspect of our standard of living as Canadians — most of what we eat, drink, wear and our modes of transportation — is made possible by trade. International trade represents 60 per cent of our GDP, and one in five jobs is linked to exports. Quite simply, the wellbeing and quality of life of Canadians depends on our ability to trade and attract investment.1 A liberal trade policy has been and remains fundamental to Canada’s prosperity.

The world has changed, but the trade realities that applied in 1867 continue to apply in 2018. The facts of Canada’s trade-based economy are undeniable. We still sell what we harvest from our oceans, fields and forests, and what we mine onshore and offshore. We still need more foreign investment as well as better infrastructure – rail, pipe, grids and ports – that is cyber-secure to get our products and services to our global customers. We also need continued effort to reduce pernicious inter-provincial trade barriers that continue to defy the logic and promise of Confederation. The Canada West Foundation estimates that more than 100, 000 jobs in Saskatchewan depend on foreign trade.2

Natural resources continue to anchor the Canadian economy and the monetization of these resources requires access to global markets. Canada ranks 12th in the WTO table of leading exporters, ninth as importers and 16th in trade in commercial services.3 Include interprovincial commerce, and 80 percent of the Canadian economy depends on trade – internal and external.4 Half of what Canadians produce is exported.5 For Saskatchewan it‘s approximately 70 per cent.6 The United States is the top market for both Canada and Saskatchewan, followed by China.

It’s also important to recognize that trade forms the sinews of the nation. In fact, nearly 40 per cent of Canadian trade occurs within our borders.7 Economists estimate provincial protectionism costs us billions annually. The dispute between Alberta and British Columbia over the new Kinder Morgan pipeline is just the latest in a series of inter-provincial disputes. Confederation was supposed to remove inter-provincial barriers. The federal government has the constitutional “declaratory” authority (Section 92.10) to approve “works and undertakings connecting the Provinces … or extending beyond the limits of the Province.”8 Also Section 121 states: All articles of the growth, produce or manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.”8

Unfortunately, the Supreme Court ruled in 1921 that “free” did not mean all products “of any of the provinces should be admitted into the other, but … they should be admitted ‘free’, that is to say without any tax or duty imposed as a condition of their admission.” The Supreme Court will soon hear a case on New Brunswick limiting the beer trade that a New Brunswick judge has ruled the restriction is unconstitutional, citing Section 121.9

If we could eliminate barriers between provinces,10 an exercise that western provinces have led on in recent years through the New West Partnership Agreement (2010) and now the Canadian Free Trade Agreement (2017),11-12 trade flows could be even higher, with commensurate benefits to consumers and gains to provincial coffers. As an aptly titled Senate study (2016) Tear Down These Walls argued “Canadians should be able to practise their profession or trade, operate a business whose goods and services can cross provincial/territorial borders, and purchase goods and services both freely and without penalty anywhere in this great country. The inability to do any of these diminishes us as a country, and makes citizens and businesses more tied to their region than to their nation.”13

Our history as a trading nation has earned Canada’s place in global supply chains, most notably in the manufacturing of passenger aircraft, trains, automobiles and energy-related products. We are also leaders in critical service industries like banking, insurance and engineering. Services are increasingly important to the Canadian economy, employing approximately three in four Canadians,14 and make up an increasing amount of our exports.15

In a world where trade linkages are an integral part of the global economy, trade has long since come out of the shadows and become part of the political dialogue. It is debate often framed by issues of sovereignty and self-determination, of economic efficiency and comparative advantage, of rich versus poor, developed versus developing nations.

Figure 1: Top Saskatchewan Trade Regions 2016.

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SOURCE: SASKATCHEWAN TRADE AND EXPORT PARTNERSHIP ANNUAL REPORT 2017

In fora, like the World Trade Organization (WTO), OECD, IMF and World Bank, Canada often plays the role of ‘helpful fixer’ and bridge to consensus. For a trade-dependent nation like Canada, it’s obviously in our self-interest and the right thing to do. Canada draws most of its annual income from trade.16 So it is good trade policy to pursue the current effort to renew secure access to the United States, our most important market, through the on-going NAFTA negotiations. The same is true of the new trans-Atlantic and trans-Pacific agreements—Canada Europe Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership CPTPP—which seek to broaden and secure market access to Europe and Asia.

Trade Once Divided Canadians, Now It Unites Them

The Wilfrid Laurier Liberals fought and lost an election in 1911 on a renewed Canada-USA reciprocity agreement. While the Conservatives traditionally opposed freer trade with the U.S., Brian Mulroney changed his mind, and that of his party, and negotiated a Free Trade Agreement (FTA) with the U.S. The free trade initiative drew on the intellectual heft of the Royal Commission on the Economic Union and Development Prospects for Canada originally commissioned by his predecessor, Pierre Trudeau.17

The real success of the FTA, and later the North American Free Trade Agreement (NAFTA), was the confidence it gave Canadians to compete internationally. If most premiers opposed freer trade in 1988, today it is the premiers who are the most active advocates for freer trade. Surveys consistently demonstrate the majority of Canadians believe that trade works to their advantage and that Canada can compete both with the USA and globally.18

Freer trade also became a catalyst for domestic economic reform. The restructuring included the introduction of a national valueadded tax—the GST—and the economic growth it spurred helped federal and provincial governments to reduce and eliminate their deficits. Since the negotiation of the NAFTA, the federal Conservative and Liberal parties have mostly shared a commitment to freer trade and have pursued this objective when in government.

A Renewed NAFTA?

Figure 2: Trilateral trade between Canada, Mexico and the United States

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SOURCE: AMERICAS SOCIETY COUNCIL OF THE AMERICAS

When it comes to trade, for Canada it will always be the United States, and then the rest. We cannot change our geography, nor would we want to. That’s why securing the Canada-U.S. FTA was a pivotal point in Canadian affairs because it gave us preferred access to what is the biggest market in the world. With President Donald Trump, an avowed economic nationalist subscribing to the mercantilist notion of protectionism to achieve a trade surplus, the U.S. administration continues to ramp up barriers against foreign competition.19 In recent months, the United States has hit Canada with punitive tariffs on lumber, jets and newsprint and now threats to aluminium and steel. We can expect more of the same.20

Foreign Minister Chrystia Freeland’s “hope for the best, prepare for the worst” is a fair characterization of NAFTA’s prospects.21 Whether we can renegotiate the NAFTA will pivot on three issues:

  1. Can we preserve dispute settlement as a check against unfair protectionism?
  2. Can we find an equitable formula around trilateral content rules for cars, our most traded commodity?
  3. Will government procurement stay open to all three nations?

If we cannot resolve these issues, then we have to look to life without the North American free-trade agreement.

President Trump’s repeated threats to rescind NAFTA have galvanized hitherto-silent U.S. support into action, making this a U.S. debate that will be decided by U.S. interests. The farm community and business, two vital groups in the Trump coalition, want NAFTA improved, not rescinded. Surveys show a majority of Americans like NAFTA, which explains why senators and members of the House of Representatives, especially those in the Midwest and from Texas, are pressing the President to do no harm to NAFTA.22 

For Americans, NAFTA is a litmus test of its place in the world. For the first time, the most important global economy wants to renegotiate a trade agreement by increasing trade barriers so as to balance its trade. With preferred access to the U.S. in question, Canada must look to market diversification, which means broadening our trade horizon.

Global Trade: A Spaghetti Bowl

The preferred venue for trade liberalization after the Second World War was the Geneva-based General Agreement on Trade and Tariffs (GATT), which eventually became the WTO as an institutional body to manage global trade.

Negotiations among the WTO’s 164 members is slower and requires more compromises. But that shouldn’t obscure the fact that the WTO is as an important international forum for trade discussions and the court for settlement of member trade disputes. For now, serious trade negotiations are conducted either bilaterally or regionally. Like-minded nations are turning to regional agreements like the CPTPP or bilateral accords like the Canada-Korea FTA to achieve trade liberalization. Increasingly, they address ‘beyond the border’ domestic regulations, such as public policy choices on investment, dispute settlement, innovation, intellectual property and, for Asia, state capitalism. The result is a ‘spaghetti bowl’23 of different agreements, of which the recently negotiated CPTPP is a good example. Companies parse the different agreements for advantages relating to differing rules of origin or intellectual property protection.

Ultimately, in an era where goods are “made in the world” of supply chains and of trade largely intra-firm or connected to global value chains (by some estimates, 80 per cent of all trade), business will demand one set of rules and the WTO likely will reassert its primacy as the main table.24-25

But good trade policy must also be coupled with good social policy. It must recognize that opening doors to trade inevitably involves the pain of economic dislocation and job loss for uncompetitive industries. Governments have an obligation to address adjustment needs through training in new skills. It also obliges government support for industry restructuring, as Canada did with its wine industry after the Canada-U.S. FTA by planting grape varieties producing wine that was good for more than taking the paint off cars.

Figure 3: Complex trade connections

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SOURCE: ITC MKI ANALYSIS

Looking Forward: A Strategy and Implementation

The ultimate test of our trade agreements is their ability to generate economic opportunity and growth. That means Canada needs to take advantage of its positive international brand and do a better job selling our goods and services. Surveyed in 2013, of the more than 1.09 million SMEs operating in Canada, only 41,000 were exporting.1 To capture the domestic benefits of trade, we must do better. Here’s how:

1. Develop a new Canada Trade and Export Strategy26

A Trudeau government ministerial-mandate priority, such an initiative would help Canadian exporters fill their order books and secure contracts. The Harper Government’s Global Markets Action Plan,1 rolled out in November, 2013 set our priority markets and incorporates key government agencies to assist in this task, including Export Development Canada,27 Canadian Commercial Corporation and the Business Development Bank of Canada.28-29

2. The Prime Minister should hold a First Ministers’ conference around a national trade promotion strategy.

A revised strategy needs to address:

  • International investment by Canadian firms, a necessary part of competing globally, including the role of pension funds;
  • Canadian business participation in development bank projects, especially infrastructure;
  • Foreign direct investment in Canada including state-owned enterprises and public-private partnerships;
  • Internationalization of start-ups through reciprocal softlanding arrangements in incubators and accelerators in the United States and abroad;
  • Target and encourage women-owned businesses to scale up and increase exports;
  • Identifying opportunities for Canadian cyber tools, technologies and services, especially in emerging markets;
  • Utilization of the Canadian diaspora and the family ties created by immigration to advance trade and investment;
  • Integrating international education, immigration and tourism into our strategy.

The first ministers should re-validate the target countries and get on with trade promotion. Saskatchewan’s Trade and Export Partnership (STEP) is a model for collaboration between business and trade promotion that other provinces could emulate.30

3. Revitalize Canada’s Trade Commissioner Service (TCS)31

The world’s oldest national trade promotion organization (1884), trade commissioners are door-openers, matchmakers and a source of market intelligence for Canadian business. They help with the challenges of foreign languages, customs and regulatory thickets. Every dollar spent on the TCS generates $27 in increased exports.32 Those that access TCS services export 18 per cent more than comparable firms.32

Final Observations

The Canada brand in the global economy is solid. We need to exploit it. Canadian services in banking, insurance, and engineering are efficient and trusted. We are global leaders in medical and energy innovation and digital technology. Canada ranks 14th in the Good Country index, defined by what each nation contributes to the common good of humanity.33The OECD Better Life index accords us a similar high ranking.34 As a trading nation we have become a nation of traders, and we need to commit to continuous improvement.

Our successful integration into North American markets, which account for almost 80 per cent of our trade, proves that Canadian business can successfully compete. We are meeting the Trump challenge by doubling down on our outreach and marketing into the U.S. Reminding Americans that Canada is their first market for 35 states and second or third for the other 15 states will help hone marketing skills that we need to apply globally.

Given the fundamental role trade has played historically in raising and maintaining Canada’s standard of living, we need to open new markets and expand our existing base. Trade and investment promotion will always be the main drivers, but we should broaden our marketing scope to include tourism, a money generator and a precursor to attracting international students to our colleges and universities.

As important as the U.S. market remains for Canada, the world trade map is being redrawn. The emergence of China specifically, and Asia more broadly, as a primary engine of global economic growth means a trade-dependent nation like Canada must adapt and adjust. This is a pivotal moment for trade policy in Canada. As history has demonstrated, nothing less than our standard of living and quality of life depend on getting it right.

 Download the Policy Brief.

Works Cited

1http://international.gc.ca/global-markets-marches-mondiaux/plan.aspx?lang=eng#message

2http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Language=E&Coutnry=CA

3www.gobal-economics.ca/northsouth.htm

4https://data.worldbank.org/indicator/tg.val.totl.gd.zs

5https://www.saskatchewan.ca/business/investment-and-economic-development/exporting-and-trade

6http://news.gc.ca/web/article-en.do?nid=877619

7http://laws-lois.justice.gc.ca/eng/const/index.html

8https://ipolitics.ca/2017/06/06/yes-the-feds-could-force-trans-mountain-on-b-c/

9http://www.theglobeandmail.com/report-on-business/economy/canada-competes/why-are-we-blocking-free-trade-between-provinces/article11541453/?page=all

10http://www.newwestpartnershiptrade.ca/the_agreement.asp

11https://www.cfta-alec.ca/

12https://sencanada.ca/content/sen/committee/421/banc/reports/2016-06-13_banc_fifthreport­_ss-2_tradebarriers(final)_e.pdf

13https://lop.parl.ca/content/lop/reserachpublications/2016-42-e.pdf

14http://www.international.gc.ca/trade-agreements-accords-commerciaux/topics-domaines/services/index.aspx?lang=eng

15http://www.international.gc.ca/economist-economiste/performance/state-point/state_2012_point/2012_7.aspx?lang=eng

16http://publications.gc.ca/site/eng/472251/publication.html

17http://www.latimes.com/world/mexico-americas/la-fg-canada-trade-20161030-story.html

18https://www.commerce.gov/news/press-releases/2108/01/us-department-commerce-issues-affirmative-final-determinations-fine

19https://www.theglobeandmail.com/report-on-business/us-newspapers-warn-of-devestating-impact-from-duties-on-canadian-newsprint/article37565314

20https://www.theglobeandmail.com/politics/freeland-on-nafta-hope-for-the-best-and-prepare/videodf63b038-9bea-43b8-b11d-ae5e541d6bca

21http://www.pewreserach.org/fact-tank/2017/11/13/americans-generally-positive-about-nafta-but-most-republications-say-it-benefits-mexico-more-than-u-s/

22http://www.rieti.go.jp/en/comlumns/a01_0193.html

23http://www.wto.org/English/news_e/sppl1267_e.htm

24http://unctad.org/en/publicationslibrary/diae2013d1_en.pdf

25http://pm.gc.ca/eng/minister-international-trade-mandate-letter

26https://www.edc.ca/en/pages/default/aspx

27http://www.ccc.ca/

28https://www.bdc.ca/en/about/who-we-are/pages/default.aspx

29https://www.sasktrade.com/

30http://tradecommissioner.gc.ca/index.aspx?lang=eng

31http://www.parl.gc.ca/content/hoc/committee/411/ciit/reports/rp5478079/ciitrp03-e.pdf

32https://goodcountry.org/index/results

33http://www.oecdbetterlifeindex.org/#/11111111111

 

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Summit of the Americas

Summit of the Americas presents opportunities for Canada

IPOLITICS by Colin Robertson
April 13, 2018

Success at this week’s Summit of the Americas in Lima, Peru should be measured by a re-commitment to liberal democratic institutions and freer trade. For Justin Trudeau the test will be to advance our trade objectives beyond NAFTA and actively support hemispheric democratization.

‘Democratic Governance against Corruption’ is the theme of this summit. The rule of law is a basic structural challenge across Latin America. Brazil’s Oderbrecht bribery scandal – Operation Car Wash- has toppled several leaders and it has regional scope.

Democratisation is the great achievement within Latin and Central America but is must be sustained. Presidential elections are scheduled this year in nine of the members, including the three biggest Latin America countries – Brazil, Colombia and Mexico, There is already Russian meddling in the Mexican election. President Vladimir Putin wants to discredit liberal democracy and create wedges in the US alliance system.

Working through the Organization of American States (OAS), Justin Trudeau should offer Canadian expertise on conducting and monitoring elections. When it comes to governance, Canada’s Parliamentary Centre, helping legislatures and legislators better serve their citizens should be enlisted. With fifty years experience, it has established its global credentials as a go-to center for governance expertise.

Hemispheric free trade remains elusive. US backing is essential but not with Donald Trump and ‘America First’.

The Lima summit, the eighth in a regular series, will bring together most of the 35 hemispheric leaders. President Bill Clinton hosted the first summit, in Miami (1994) to boost a hemispheric free trade area stretching from Alaska to Terra del Fuego. Negotiations began but the divides proved too big. There were subsequent summits in Santiago, Chile (1998) and Quebec City (2001) and then Mar del Plato, Argentina (2005) but with the discrediting of market fundamentalism – ‘the Washington consensus’ – the appetite for closer economic integration was gone.

Populist leaders led by Venezuela’s Hugo Chavez, Brazil’s Lula da Silva, Bolivia’s Evo Morales and Argentina’s Hector Kirchner derided the FTAA, labelling it Yankee neo-imperialism. Instead, they embraced ‘Bolivarianism’, creating their own regional trade part – Mercosur –  and development bank – Banco del Sur.

But if the Washington consensus was bitter medicine, especially for Argentina and Ecuador, ‘Bolivarianism’ was toxic. Banco del Sur was never capitalised and populist policies resulted in corruption, impeachments and economic catastrophe.

Venezuela, once the richest country in Latin America, is in economic free-fall. According to the IMF, the Venezuelan GDP has shrunk by 50 percent  in the last 5 years.  This economic collapse has caused untold human suffering and massive migration of Venezuelans to neighbouring countries (especially Colombia) in search of food, medicine and a future.

Venezuelan president, Nicolas Maduro is ‘disinvited’ to Lima. He fails the ‘democracy clause’ established by then Canadian prime minister Jean Chretien and other leaders at their Quebec summit. Managing a post-Maduro Venezuela will be on the agenda.  Canada is invested in this effort through the imposition of Magnitsky-style sanctions against Maduro associates and involvement in the Lima Group.

The looming Sino-American trade war will also be discussed. For most of the hemisphere, the US and China are thir biggest trading partners. These protectionist spiral and growing geo-political tensions, spelled out in a recent speech by former US Secretary Rex Tillerson,  risk significant collateral damage for the region.

Justin Trudeau can use the summit to advance Canada’s trade agenda. With its rapidly growing middle class and younger demographics, marketing Canadian schools should be part of every conversation.

Mr. Trudeau should establish a date for our associate membership in the Pacific Alliance with presidents Pena Nieto, Sebastien Pinera (Chile), Juan Manual Santos (Colombia) and Martin Vizcarra (Peru).

Freer trade with Mercosur is also a Trudeau objective. If Canada can help Mercosur put its protectionist past behind it then the recent initiative should include progressive trade provisions. Advancing the environment, labour, gender, and small business is a better way to address populist discontent.

Canada is a country of the Americas. Since NAFTA, especially with its re-negotiation, we have come to appreciate Mexico as our friend and partner.  Mexico and USA aside, there are 32 other nations whose votes we will need in our quest for a UN Security Council seat.

We now also have a growing hemispheric web of trade agreements buttressing our commercial interests – banking and mining but now including manufacturing and infrastructure. Migration has created growing Latin diasporas, especially in our cities. Tourism and student study will bring more. Devoting sustained attention to the Americas makes sense for Canada.

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NAFTA… and behind this door

Donald Trump has decided it’s “Let’s Make a Deal” time for NAFTA. Like in the long-running game show co-created and hosted by the late Canadian Monty Hall, there are three doors with different prizes: the big, the modest and the booby.

After deliberations last week in Washington by the key ministers − Chrystia Freeland, Ildefonso Guajardo and Robert Lighthizer − three doors lie before their leaders:

  • Pursuing a big deal with negotiations suspended until next year, after the Mexican inauguration and new U.S. Congress convenes.
  • Agreement now on a modest deal, such as the recent remake of the Korea-U.S. FTA.
  • The booby prize — Mr. Trump rescinds the NAFTA.

Calling NAFTA “the worst trade deal ever,” Mr. Trump has come close to scrapping it on several occasions. Farmers, auto workers and business, key components in the Trump base, now say “do no harm“ to NAFTA.

Congress is responding to their pressure by telling the U.S. President to reform NAFTA. After enduring 23 years as one of the scapegoats for job loss and illegal migrants, its threatened demise has rehabilitated NAFTA with half of Americans saying they want to keep it.

As Sino-American trade tensions continue to escalate, China requires sustained attention from the Trump administration.

If Mr. Trump wants to build international support to persuade China to curb its overcapacity in steel production and to follow international norms on intellectual property, then repairing neighbourhood relations makes good geopolitical sense. With the midterms approaching, it is also good politics.

So what would a revised NAFTA, even in a modest deal, look like?

Dispute settlement is the red line for Canada and Mexico. The Trump administration is applying trade retaliation as never before. Canada has felt the U.S. sting on softwood lumber, Bombardier jets and newsprint. We also face tariffs on steel and aluminium – exemption depends on the NAFTA talks. Canada and Mexico must have redress, beyond the U.S. court system, from unilateral U.S. trade actions.

A new content formula for North American autos appears within grasp, although Mexico will need to bend on the minimum-wage component.

Access to government procurement could be resolved by letting governors and premiers figure this out through regional reciprocity agreements. We did this in 2010. States and provinces handle most spending on infrastructure. Having a variety of vendors ensures better value and checks local gouging.

The Mexican idea of having a thorough review of the agreement after five years should satisfy the U.S. demand for a sunset clause.

If these pieces fall into place, resolution of other items should follow.

Canada would keep supply management of its dairy and poultry industry. In return, the United States will get increased quota access — what they would have got if they had stayed in the Trans-Pacific Partnership. The threshold after which duties apply on cross-border imports would be revised upwards from Canada’s $20 rate to that approaching the Mexican rate – $50 – but nowhere near the $800 U.S. rate.

The negotiators and ministers have gone as far as they can go. If Mr. Trump is set on a “quick“ deal, then the three leaders must weigh in.

With new auto-content rules and slight improvements on agricultural access, President Trump would claim victory for auto workers and farmers. Canada and Mexico would retain dispute settlement. There would be provisions on energy as well as environment, labour and gender – reflecting elements of the Trudeau progressive trade agenda.

For Mexico, the stakes are high. How will a deal affect campaigning for its July 1 presidential and congressional elections? President Enrique Pena Nieto’s chosen successor, Jose Antonio Meade, is currently running well behind the leftist former mayor of Mexico City, Andres Manuel Lopez Obrador.

And what about Congress? A modest deal won’t meet every local interest.

With effort, an agreement could be voted on during the lame-duck session after the Nov. 6 mid-term elections, but it would be tough. Mr. Trump may well decide to double down by introducing the new NAFTA and rescinding the current version, telling Congress to take it or leave it.

A modest NAFTA agreement would still be a win-win-win. North America would retain its top spot as a competitive trading platform. In time, there will be more improvements, whether through future NAFTA updates or when a future U.S. administration joins the Trans-Pacific partnership.

Monty Hall said that there were “some strange moments” on Let’s Make a Deal, like the time that there was an elephant behind one of the doors. Living in Trump times, we understand what he meant.

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