USMCA: A trade deal that does no harm, but breaks no ground | National Post

Repost

Kevin Carmichael: Trudeau and Chrystia Freeland achieved none of the things they identified as Canadian goals with the new pact

The romantics who think international commerce works best when bureaucrats determine trade flows will be pleased.

Canada’s new trade agreement with the United States and Mexico — the United States-Mexico-Canada Agreement, or USMCA — is a step back to the time when doing business with America meant limiting your exports, no matter how badly Americans themselves might want them.

Perhaps the biggest cost of securing commercial peace with President Donald Trump was sacrificing Canada’s commitment to freer trade, a pillar of this country’s economic policy for at least three decades, albeit one championed hypocritically on occasion.

The USMCA, assuming the new Congress in 2019 is of a mind to work with the Trump administration, will limit the number of cars and the value of automobile parts that Canada can ship to the United States without paying higher duties.

It will force Canada and Mexico to respect the excessively long patents the U.S. gives to its pharmaceutical companies. The agreement opens the door for one party (Washington) to influence trade talks another party (Ottawa, Mexico City) have with a “non-market economy,” such as China. The new terms might even force the Bank of Canada and the Bank of Mexico to keep an eye on Washington as they set monetary policy, thanks to the introduction of a committee that will review the conduct of macroeconomic policy in the three countries.

Continue reading...