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For Small Upstate Companies, Sustaining Strong Canadian Trade Ties is Critical
On Monday, President Trump announced the U.S. and Mexico had reached an agreement to revamp the North American Free Trade Agreement. Canada – the other member of Nafta – has not agreed to the new terms and is scheduled to hold discussions today.
Professor Peter Koveos is the Department Chair in Finance and teaches a range of courses in finance, international business and global entrepreneurship at Syracuse University’s Whitman School of Management. Koveos says the impact of Canada’s trade with Upstate New York companies is immense. For small companies especially, Canada is the first market they think of when deciding to expand internationally.
“We have very few details on the U.S.-Mexico Agreement…in fact, it’s not really an ‘agreement’ yet. We know that it primarily dealt with automobile production and the Investor-State-Dispute-Settlement (ISDS) rules. It also contained some changes regarding the duration of the agreement.
“Those on the Mexican side – and many members of the U.S. Congress – view Canada’s participation as fundamental to the overall success of the trade environment in North America. Despite some specific trade conflicts through the years, the U.S.-Canada relationship has been supported by every other President and Congress since then. Canada now has a few days to decide, but wants to examine the details. At the same time, President Trump threatens Canada with increased tariffs.
“The good news is that Prime Minister Trudeau places the welfare of Canada’s citizens above any personal insults thrown his way. I am sure that Canada has a strong preference to join, but will not be forced into unfavorable terms. Given the time pressure, perhaps an intermediary ‘agreement to agree’ could be reached by Friday.
“The situation, of course, is even further complicated by domestic policies (especially in the U.S. and Mexico). So, as long as economic issues are at the mercy of politics, the outcome is even more uncertain. One has to ask: What are we trying to accomplish by eliminating Nafta?”
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