The reopening of the North American Free Trade agreement by the United States, a process initiated from the top with President Donald Trump pushing for a renegotiation of the deal has certainly put the future parametres of trade between the two countries into question.
There is no doubt the agriculture sector could be one seeing the greatest upheaval as a new deal is hammered out, if that process ever comes to an end which can see Canada, and Mexico inking a new deal with the United States.
As has been stated here before the only way a new deal may get done is for Canada and Mexico to signed a deal heavily in favour of the United States, forced into a lopsided agreement because of the importance of the huge, and close by, American market.
Over the years a goal for Canadian exporters has always been to grow alternate markets, recognizing reliance on a single market, even a massive one with a generally friendly country is not ideal.
The former Stephen Harper led government certainly pursued deals, and the new regime under Justin Trudeau appears interested in continuing to look for new trade partners.
In some respects Canada has been rather successful in inking deals. Canada has concluded free-trade agreements with more than 40 countries, including a rather recent deal with South Korea, which represents Canada’s first FTA with a partner in the Asia-Pacific region.
As of 2016, Canada had also concluded two trade agreements that are potentially bigger than NAFTA: the Comprehensive Economic and Trade Agreement (CETA) with the European Union and the twelve-nation Trans-Pacific Partnership (TPP). CETA has already been provisionally applied.
The list of countries where Canada has free trade deals includes a varied range from Chile to Peru to Honduras to Ukraine, but collectively the markets are not large, which illustrates that the larger the market the harder it is to hammer out a deal. There are simply more variables and a greater range of areas of contention which are harder to find common ground on.
But Canada keeps trying. The Reuters news service recently reported Canada and the South American trade bloc Mercosur will announce in December the opening of negotiations for a free-trade. Mercosur is a major South American trading block with Argentina, Brazil, Paraguay, and Uruguay as full members.
Again this would not be a huge agreement, at least based on current trade. Canadian trade with Mercosur countries is reported at about one-tenth the trade between the South American block and the United States as an example.
But trade deals are less about current movement, and more about smoothing the road to allow for greater trade moving forward.
While NAFTA will remain crucial for Canada, every other deal helps diversify trade and builds less dependency on the American market, currently a volatile one based on the man in the oval office.
Calvin Daniels is Editor with Yorkton This Week.