Centre for Future Work

The Centre for Future Work’s new report on trade talks between Canada and the U.S. has received extensive coverage in Canadian media, as the August 1 deadline to reach a ‘deal’ with the U.S. looms. The report, “A Bad Deal With Trump is Worse Than No Deal At All,” lists several reasons why locking in one-sided U.S. tariffs in a non-binding memorandum with the erratic U.S. President would hurt Canada much worse than other U.S. trading partners, and reduce chances of rolling back Mr. Trump’s aggressive trade war through either international dispute settlement or in U.S. courts.

Report author and Centre for Future Work Director Jim Stanford was interviewed on CBC News Channel by Marianne Dimain. He explained that the current ‘deals’ Trump is reaching with several countries are not trade agreements in the conventional sense (which are legally binding and subject to parliamentary ratification by participating countries). Rather, they are non-binding frameworks that describe in broad terms future commitments by the two sides. They also maintain unilateral U.S. tariffs at significant levels (from 10% in the U.K. deal, to 47% for China), rather than the traditional approach of mutual reduction of trade barriers.

He pointed out that even though the final average tariff rate under a Trump ‘deal’ might seem lower than some of those other countries, Canada’s economy will be among the handful of hardest hit countries because of the unique role of U.S.-bound exports in overall GDP. Unfortunately, the willingness of some other countries which are less exposed to U.S. trade actions (including Japan and most recently the EU) to accept these one-sided ‘deals’ only enhances pressure on other countries (including Canada and Mexico) to buckle. “

The report’s arguments are summarized in this commentary in the Toronto Star. Stanford also discussed the report with Global TV, BNN, and several radio stations.

The post Trump’s “Shakedown” Must be Resisted: Media Coverage of Centre for Future Work Report appeared first on Centre for Future Work.

Trade negotiations between Canada and the U.S. are continuing, as the revised August 1 deadline approaches. Reports indicate that despite Canadian concessions (on border security, defense spending, and the Digital Services Tax), the U.S. is refusing to remove current and threatened tariffs on Canadian products. Last week Prime Minister Carney warned Canadians that an eventual deal with the U.S. will likely include continued substantial U.S. tariffs. An emerging narrative from government and business quarters suggests that if tariffs imposed on Canada are lower than on other countries (resulting in a less severe ‘average effective tariff’ rate), then Canada should count this as a victory.

A new report from the Centre for Future Work shows this optimism is unjustified and dangerous. Because Canada’s economy is uniquely dependent on exports to the U.S. (equivalent to over 25% of Canadian GDP), even tariffs that seem relatively favourable (compared to other countries) will still cause disproportionate and unprecedented damage to Canada. Even under favourable assumptions, Canada would still be among the handful of worst-hit countries.

The report shows that Trump’s current and threatened tariffs would exact a painful and lasting toll on Canada’s economy, making us among the worst-hit countries in the world. It also lists seven economic and strategic reasons why accepting a bad deal with Trump on August 1, is worse than reaching no deal. Instead, we should continue to resist Trump’s attacks, both at the negotiating table and through countervailing policy actions.

Contrary to Trump’s claims, Canada holds plenty of valuable cards in the current negotiations, based on our status as the largest export market for U.S.-made goods and services, and a dominant supplier to the U.S. of many vital industrial inputs. The federal and provincial governments should preserve our right to play those cards, while undertaking the other steps required to reduce our dependence on U.S. exports, and build a more sovereign, value-added, sustainable economy in the future.

Please see the full report, A Bad Deal with Trump is Worse than No Deal at All, by Jim Stanford, Director of the Centre for Future Work.

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