Canada given advance notice of Trump’s NAFTA demands

>Mr. Ross, 79, will run the trade file out of the sprawling Commerce department and work alongside Robert Lighthizer, the nominee for U.S. trade representative, and Peter Navarro, an economist and strident critic of China who will run the White House trade council.

>“The clear indication we have gotten from that side of the operation is that they are targeting Mexico and not us,” the official said. “We are keeping an open line of communication with them so we know what things they are planning to do with Mexico and that have a major knock-on effect with us.”

>Foreign Affairs Minister Chrystia Freeland has already contacted Mr. Ross, although the Trudeau government is relying heavily on former Progressive Conservative prime minister Brian Mulroney to act as an intermediary.

>Mr. Ross, who has an estimated fortune of $2.9-billion (U.S.), is a close personal friend of Mr. Mulroney and Mr. Trump. The private-equity titan attended the 2011 wedding of Mr. Mulroney’s son Nicholas in Toronto, and their families meet regularly during the winter in Palm Beach, Fla.

>Canada is the biggest trading partner of the United States, and Mr. Mulroney has strongly pressed the case about the importance of the Canadian economy to Mr. Ross and others, including the president-elect, a source said.

>Mr. Trudeau sounded a positive note when asked at an event in Fredericton, N.B., on Tuesday about the threat of U.S. protectionist measures and a border tax on Canadian products.

>“We are focused on having a constructive working relationship with the new administration and one in which we highlight the depth of integration and inter-connectedness between our two economies,” he told reporters. “Obviously, there are millions of Canadian jobs that depend on the U.S. market, but there are also millions of American jobs that depend on smooth integration and trade back and forth across the border of goods and services.”
...

>Mr. Ross will have his confirmation hearing before the Senate Commerce, Science and Transportation Committee on Wednesday. He has been a vocal critic of free trade, and long advocated renegotiating NAFTA and other deals.

>He has called NAFTA the “poster child for unbalanced trade and investment” and accused Mexico of importing auto parts from China for vehicles it ships duty-free to the United States.

>In an interview with Bell Media’s BNN in October, Mr. Ross said Canada would not have a “lot to fear” from a Trump presidency.

>“You don’t hear him voice huge complaints about Canada, and there’s a good reason for that,” he said. “In the case of the trade between the U.S. and Canada, it is relatively much better-balanced than is the trade between the U.S. and Mexico.”

>Known as a turn-around specialist, Mr. Ross revived troubled U.S. steel, textile and manufacturing companies, but also moved thousands of jobs offshore.

>Data obtained by Reuters through a Freedom of Information Act request show that textile, finance and auto-parts companies he controlled eliminated about 2,700 U.S. jobs since 2004 by shifting production to other countries, according to a Labor Department program that assists workers who lose their jobs due to global trade.

>Five ways Trump’s protectionism could be good for Canada

http://www.torontosun.com/2017/01/28/five-ways-trumps-protectionism-could-be-good-for-canada

>Throughout human history, with every economic disaster, crisis or trauma, there has also been economic opportunity.

>U.S. President Donald Trump is promising to “Make America Great Again”. But he could, albeit inadvertently, create an opportunity to make the Canadian economy greater than it is now.

>To be sure, economic protectionism in the U.S. under Trump could hurt our economy. The potential threats and negatives are obvious and right in our faces.

>If Trump carries out the protectionist policies he’s talking about, it will be blunt force trauma, readily apparent to everyone.

>Economic hardship is tough on individuals -- emotional and deeply personal in its impact. However, the new opportunities economic turmoil creates, while often hidden, do exist, although to take advantage of them requires courage.

>After all, it seems counter-intuitive to invest in future economic growth, when everyone around you is panicking and heading for the exits. It’s tough to double down if you could lose your house or the shirt off your back.

>That said, as counter-intuitive as it may seem, here are five reasons why Trump’s protectionist policies could be a good thing for the Canadian economy:

>1) Trump’s “wall with Mexico” and “ban on Muslims”: U.S. anti-immigration policies will push more high quality immigrants to Canada and Canada has always benefitted from immigration -- especially as our demographics skew to an older population. The federal task force set up by Prime Minister Justin Trudeau recommended increasing annual immigration from 300,000 to 450,000, but not just in gross numbers. To succeed it will require highly motivated immigrants who are likely to succeed in Canada, which Trump’s policies could send here.

>2) Protectionist taxes and levies: Protectionism hurts trade and will not be good for the U.S. in the medium and longer term. However, it may lead to a higher U.S. dollar in the short term, making Canadian exports even more affordable. Cheaper exports may lead to greater investments in the Canadian production of high value goods for export to the United States. The final product might be assembled in the U.S. to keep Trump happy, but more of the components would be from Canada.

>3) Trump ending the Trans Pacific Partnership: The end of TPP does not end trade deals. Canada will need to decide if it wants to participate in that other Pacific trade deal headed by China, which is now in its initial stages. Japan has also decided to consider new trade deals. With Trump rejecting the TPP, Canada could become the major entry point into the North American market for many products and services.

>4) Trump’s promise to the “Rust Belt” to bring back jobs. Automation killed more jobs in U.S. factories than trade deals. A focus on job creation at any cost by Trump will mean lower value jobs, while Canada is moving to higher value and higher income jobs, based on a comparably strong public education system, good health care, and reasonable labour laws and tax rates.

>5) Political uncertainty. This comes down to one word – trust. No one trusts someone who is erratic. We live in a global economy where investment is highly competitive. Trump can bully companies for now but his popularity will only last for so long. Eventually there will be the inevitable erosion in his support. By contrast, Canadian politics is solid and predictable. Conservatives and Liberals alike provide stable government. And where do entrepreneurs, both large and small, want to do business and make investments? In a stable political environment, where their investment is safe and they can trust the leader of the country to play by the rules.

>By contrast, Trump is creating economic uncertainty.

>The Canadian government must do everything it can to protect our economy. But Trump could, in spite of himself, end up being the best U.S. president for the Canadian economy, too.

>Jim Warren is a Liberal political strategist and media commentator. He worked for mayor Mel Lastman and premier Dalton McGuinty and is currently a principal at grgadvisors.ca and CEO of Riseley Gaming Inc.