The New NAFTA

I have had a chance to review the new USMCA agreement and my greatest response is "Is that it?"  Is that all we got from over a year of negotiations?

I realize this all started because of the ego and stupidity of the current occupant of the White House so I guess it is probably a bit of a blessing that things have not been changed drastically but I am still kind of surprised at just how much it has not been changed.

Then again, since we were dealing with a bloviating windbag it is impressive that the Canadian negotiating team did not have to make significant and potentially detrimental concessions in order to secure the new agreement.  

As I stated here I am not a true believer in free trade agreements in general and the NAFTA in particular.  It has done some good but it has also done alot of bad for the Canadian economy since its implementation.

All that being said there are a couple of changes in the new agreement that I believe make it somewhat better than the original.  The first is the virtual elimination of Chapter 11.  The idea that a company can no longer sue a government for taking actions to protect the environment, food and water supply and labour standards is an improvement.  The second is the change in the energy provisions that used to force Canada to sell its energy resources to the United States even during shortages, potentially leaving Canada short of these resources for its own use.  Brian Mulroney essentially sold Canada out on that provision in the original Canada/US FTA and it is significant that when the US asked Mexico to do the same thing in order to join NAFTA the Mexicans told the Americans to get bent (diplomatically of course).  This provision was one reason for the discount that Canadian firms had to sell their energy products to American firms so maybe the elimination of this provision will help improve that situation in the future.

The media and the other political parties are being their usual obtuse selves.  The other parties because the agreement is a win for the government, albeit a limited one, and they cannot have that.  They have to find some fault with it so they have focused on dairy.  It is true that the dairy industry has to allow more access to its markets but the amount is not that great.  It can easily be absorbed by the industry on its own and with the promised compensation the government has indicated they will give them no one in the dairy industry is going to lose their shirt.

The Globe and Mail had another angle yesterday in their Saturday paper editorial.  There is a provision of the new agreement that states that none of the signatories can enter into a free trade agreement with another country without approval from the other signatories.  This provision is aimed directly China.  The Globe and Mail seems to believe that this is a somewhat unreasonable infringement of Canadian sovereignty, which is silly.  Free trade agreements by their very nature are huge infringements on the sovereignty of the signatories and they have always been that way.  There is a reason why the Liberals ran a political advertizement showing a guy erasing the border between Canada and the US during the Free Trade election of 1988.  Everybody knew that the new FTA would reduce the sovereignty of both Canada and the US.  That did not seem to bother the Globe and Mail in 1988 or since.  Now they seemed to be bothered by this one provision.  Is this an indication that the Globe and Mail has a limit to how much an agreement can impact Canadian sovereignty or is this just the Globe and Mail quibbling because they believe they have to find something to criticise the government with in this treaty?  My guess is it is the latter.

The new USMCA is a slight improvement on the old NAFTA but it is still a flawed agreement like the NAFTA.  I doubt its will change how the three partners deal with each other in a significant fashion which kind of makes the whole past 13 months kind of pointless.  The government was forced into this situation by a sociopath so I guess we can be satisfied that the agreement that was finally signed should not do significant harm to the Canadian economy and society.