Wednesday, April 26, 2017

Brave New World - a rare political post for me

Well President Trump's White House has leaked that an Executive Order may be coming down the tube taking the United States out of NAFTA. Having watched in the 1990s as the introduction of NAFTA decimated the manufacturing section of southwestern Ontario, I greet this newest rumour in deep thought. Canada has suffered under NAFTA in a similar fashion to the United States but on the other hand both countries have benefitted from NAFTA. Eliminating it will certainly tell us of its value.

It will likely hurt Canada initially but there is an opportunity now for small business to flourish once again in Canada and grow with the competition gone from similar types of small businesses from the United States which made these much smaller similar enterprises not profitable. As I said in the title, it is a brave new world but I can actually see the light at the end of the tunnel. Canadians are hard workers and initiators and we will prevail.

It is interesting that we are one of the few countries in the world with whom the United States has a trade surplus; they sell 11.9 Billion dollars more to us then we sell to them as of December 2016. When President Trump started to attack us this past week, I decided to do a little research on what he was saying about us and the opposite is true with regard to trade between us.

We really would rather have our cheese made with fresh milk and that is all that this business with dairy is about. Freeze dried blocks of milk just do not cut it; we like our cheese and we like our small cheese makers here in the eastern part of Canada (and probably many other parts as well!). The United States still sells us 500 million dollars in milk product compared to the 100 million dollars that we actually ship to them. I am surprised that we actually sell milk to the United States (must be cheese) given that Wisconsin has more milk cows in that state than we have in all of Canada. New York State seems the most upset in that regard but they will really miss having that huge market in Toronto where their products typically sell. Our milk producers will have to work 24 hours a day to keep up with that demand! However, it is a decision that the United States must make. We can only tell them the actual numbers and what stands to be lost to them. They do have a trade surplus with us!

As for our softwood lumber and the tariff I have watched that come and go through my 71 years. First the tariff then we go to the World Trade Organization and they decide in our favour that our softwood is not subsidized (it isn't) and then we have a deal for ten years and we do the same thing decade after decade.

We love our American neighbours and we try to help them whenever our help is needed. We will miss the free flow of goods across the border back and forth. We will suffer for a bit but we will recover and move ahead. I suspect that our immigration will increase dramatically and more people make more industries and prosperity soon follows. One big plus is the hydroponic vegetables growing now in southwestern Ontario. With high tariffs it will be worthwhile to really expand their business and we will not need to buy any more fresh vegetables from the United States in the winter (they cross the border without tariff under NAFTA and Toronto eats a lot of fresh vegetable along with the rest of us!). Snow does rather impede our having fresh vegetables and fresh fruit!

After so many years with NAFTA, I think it is a good trade deal in the long run and we all benefit greatly from NAFTA; time will show that I expect. We will miss it for sure. But as always we will be here for our neighbours to the south ready to help them out whenever they need help. We have this shared continent with its wild weather and all that that brings and we have always passed back and forth helping each other.

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