16 | LEXPERT • June 2017 | www.lexpert.ca/usguide-corporate/
The twirling carousel that has characterized the first few months of Donald Trump's
ascendance to the US presidency appears to have left the future of cross-border trade hanging
in the air, nudged here and there by the daily or weekly whims of the Oval Office.
What we do know is this: President Trump has called the North American Free Trade
Agreement (NAFTA), which received the approval of Congress in 1994, the "worst trade
deal ever." We also know that getting a better deal for the US is high on this administration's
agenda. President Trump and Canadian Prime Minister Justin Trudeau met in February
2017 to begin the dialogue. Meanwhile, Mexican President Enrique Peña Nieto hastily
called off his first encounter with President Trump after the US president signed an execu-
tive order authorizing a border wall between US and Mexico.
What getting a better deal means, however, is unclear. Does it portend the modification
of NAFTA, the end of NAFTA, the revitalization of the pre-existing Canada-US Free
Trade Agreement (CUSFTA), or whatever else President Trump may be considering? Will
Canada be in the crosshairs or merely sideswiped as Mexico, and its $60-billion trade surplus
with the US, takes the brunt? After all, the Canadian government's propaganda machine
has been ceaselessly pointing out that trade between Canada and the US reached $769 bil-
lion in 2015; that Canada is the primary trading partner for 35 US states; that nine million
American jobs depend on trade with Canada; that the pay scales of Canadian workers ap-
proximate those in the US; and that the US trade deficit with this country isn't significant.
Faced with all the uncertainty, pundits appear confounded. "That's not surprising when
you're dealing with a guy who operates by issuing threatening tweets," says Jack Millar of
Millar Kreklewetz LLP in Toronto. "There's a lot of uncertainty about whether or to what
degree the US is going to continue to conform to the traditional trading rules."
POLITICAL DIVIDE
Trade
UNCERTAINTY
The future of US-Canada
cross-border trade remains
uncertain, but both economies
are well integrated, and there's
increasingly unified political action
and lobbying by businesses
on either side of the border
BY JULIUS MELNITZER
PHOTO:
SHUTTERSTOCK
