# Any thoughts on what will happen with NAFTA?



## TomB19 (Sep 24, 2015)

I've made sure to have some cash on hand but I'm not braced for the dissolution of NAFTA.

With the opening volleys of the Chinese trade war, the US could use a win. On the other hand, this is Trump we are talking about so who knows what might happen.

I try to have 10% cash, as a minimum, at all times but this might be a period of time where the folks who have their fallout shelters well stocked may have the last laugh.

Any thoughts?


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## new dog (Jun 21, 2016)

I still think Mexico is the one that has the most worry about NAFTA. Canada will of course take a few hits like it already has on lumber and such things but I think Canada will be fine.


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## TomB19 (Sep 24, 2015)

I worked with a grain handling firm for 15 years and was under the impression soybeans were a niche crop in Canada. A little research indicates we actually have quite a bit of area planted with soybeans.

If China tariffs American soybeans, that could be a nice thing for Canada, particularly if we reduce trade to the US in a post-NAFTA environment.


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## Daniel A. (Mar 20, 2011)

China holds a great deal of the USA debt 1.189 trillion as of October 2017 should they start dumping that debt it will hit the financial markets. 

The USA is Canada's biggest trade partner Canada would take more than a few hits without NAFTA.
There are no winners in a trade war bad for us bad for the USA.


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## humble_pie (Jun 7, 2009)

Daniel A. said:


> China holds a great deal of the USA debt 1.189 trillion as of October 2017 should they start dumping that debt it will hit the financial markets.



when brazil, russia, india & china set up that new BRIC bank a few years ago - to replace USD as the world's prime currency - i recall reading that china dumped something like a third of her US T-bills at that time. The T-bills she had been holding for aeons, at least since the presidency of richard nixon.

the BRIC bank was HQ'd in china & was to all intents & purposes a china trade bank with window dressing. We don't hear much about it these days. China already is said to be a major holder of gold. If they redeem those close-to-2-trillion-$$ in US T-bills, where are they going to invest the proceeds? china may not have any other major alternative at present. Although we could assume that a trade war would mean another downward adjustment in chinese investment in american gummint paper.

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## ian (Jun 18, 2016)

I think the Canada portion will get tweeked. Why not, after the agreement is long in the tooth and probably needs some tweeking. We have smart people working on this. And, Trump is desperate to get this done for political reasons which may play in our favour.

It is not unusual for US politicians to claim that Canada got the better of them. Johnson apparently voiced his upset with Pearson et at over the original Autopact treaty claiming it worked to Canada's favour at the expense of the US. Politicians....like some people's kids.

I suspect Mexico will loose a little.

Trump will get what he wanted all along. Not necessarily big change to the agreements but he will certainly use this to claim a huge victory for the USA. Those that want to believe this will do so, despite what the facts may or may not be.


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## james4beach (Nov 15, 2012)

Being selfish here... my comment is only about a small part of NAFTA, the provisions for professional labour mobility across the border (TN). This is currently how I am employed in the US.

I've read a lot of material on this and consulted with a lawyer. I currently believe that the US/Canada arrangement for this category of labour mobility will remain, even if NAFTA is cancelled. Before NAFTA existed, there was a Canada/US trade agreement that had effectively the same status (TC). So I don't think it will disappear. I've also read the US govt documentation on NAFTA strategy and there is no mention of overhauling labour provisions and cross-border agreements, so I think workers like myself are safe.

I don't think NAFTA will be thrown out the window entirely, in any case. This hubbub is more about the Mexico part of NAFTA, and I think much of the Canada/US agreement will remain -- if not called NAFTA, then something else.

However I am somewhat concerned that NAFTA drama could impact both Canadian & US stock markets, and currencies. Some dysfunction in NAFTA will hurt North America overall. Somewhat as a hedge against this, I'm holding gold and foreign (EU & JP) bonds... though I would hold the gold anyway due to my permanent portfolio.


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## Eclectic12 (Oct 20, 2010)

Hmmm ... makes me wonder if the disruption for TN visa at the Windsor/Detroit border has resulted in directives to other spots that renew TN visas to avoid a repeat.
http://www.cbc.ca/news/canada/windsor/canadian-nurses-working-in-us-rejected-1.4026554
https://www.freep.com/story/news/lo...9/canadian-specialized-nurses-visas/99390430/


Cheers


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## Rusty O'Toole (Feb 1, 2012)

Am I the only one who remembers the thousands of jobs that left Canada because of NAFTA? Maybe we will get them back. Except the Canadian government no doubt will find a way to stop that happening.

NAFTA was a disaster for Canadian manufacturing.


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## bgc_fan (Apr 5, 2009)

I doubt we'd get back any manufacturing. But if we did, it wouldn't amount to as many jobs because we'd be starting from ground up, and most likely leveraging technology to rebuild the capability. It's the same in the states. Their manufacturing sector has grown, but not the employment because there is more automation.

An aside, but perhaps something that may affect NAFTA negotiations is the fact that Trump is revisiting the TPP.


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## ian (Jun 18, 2016)

We in Canada have lost far more jobs to manufacturing efficiencies than we have to Mexico. Our economy has been steadily changing over the past ten years. Those jobs won't be coming back.


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## AltaRed (Jun 8, 2009)

I agree. Rusty might be getting suckered into the kind of rhetoric spouted by CCPA, a pretty wacko socialist group. NAFTA had virtually nothing to do with loss of manufacturing jobs, a few Mexican plants aside. The threat comes from automation, better quality elsewhere, low wage countries like Vietnam, and the ridiculously high cost of doing business in places like ON and QC. The ON Liberals did more damage with their increasing burden on business than anything else and it still continues to grow.


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## Eclectic12 (Oct 20, 2010)

I agree with the main point, especially now.

I question the "virtually nothing" as I can recall the US buyer of the Canadian plant having a spokesperson telling the Canadian reporter that "it is perfectly legal to fire people for refusing overtime" and that the owner was prepared for a long strike. Shortly after the "clarification" interview that "corrected" this to say that from management's perspective, firing for refusing OT wasn't the issue - the owner closed the plant to open another one in Mexico.

I can also recall the profitable plant being closed down in favour of a Mexican one as "while good, the profits are not high enough".


I'd have to check the years to confirm the conservatives were in power in ON.


This does not change the current business environment in regards to automation or the ON liberals.


Cheers


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## AltaRed (Jun 8, 2009)

I said 'virtually nothing' because it is almost ONLY closures resulting in a movement of operations to Mexico that makes Central Canada news. CBC, the Red Star, and others have to have their anti-business bias days in the limelight. How many manufacturing jobs were actually created as well? True, a lot of auto manufacturing has gone the way of Mexico, but US automaker manufacturing has been in a slide for a long time. You have to make good products to sell them competitively with offshore product. The Brits with their junk learned the hard way and have been totally hollowed out.

Same with the Heinz closure of the Leamington plant for ketchup. The 'sky is falling' was all over Canadian news. Why in the world would they not consolidate manufacturing in an economies of scale plant in a jurisdiction of lower wages, lower energy costs and lower taxes? And yet many Heinz products are still made at Highbury-Canco, some for export. How many Canadians have heard about that? http://windsorstar.com/news/local-news/heinz-boycott-could-hurt-leamington

It would be much better to dig into detailed Stats Can data for facts.


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## OnlyMyOpinion (Sep 1, 2013)

AltaRed said:


> ... You have to make good products to sell them competitively with offshore product...


Case in point: ALLISTON, ON, Jan. 9, 2017 /CNW/ - Honda of Canada Mfg. (HCM), a division of Honda Canada Inc., announced today that it will invest* $492 million* over the next three years to allow the company to modernize its Ontario manufacturing facilities and significantly improve its manufacturing carbon footprint, which is part of Honda's global initiatives. The new investment brings Honda's total Canadian facilities investment to *over $4.7 billion*. In 1986, Honda became the first Japanese auto maker to build a manufacturing facility in Canada...
https://www.newswire.ca/news-releases/honda-of-canada-mfg-to-invest-492-million-in-its-ontario-manufacturing-plants-610159095.html


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## ian (Jun 18, 2016)

Automobile manufacturers are investing in Canada. And production among some brands may be increasing. BUT....the real issue is how many assembly line workers are required to produce 1000 automobiles. This number continues to decrease with each new investment in technology. Their ongoing business goal is to build better cars with fewer people. They are succeeding. One upside for the consumer is that the product quality on some brand continues to increase.

Our auto industry has to export. They are facing three domestic threats. The first is automation and increased productivity. The latter is the key to continued wage increases. Other costs included in the cost of doing business are increasing disproportionately. Electricity being one of them. The third threat is the market. Millennials are not exhibiting the same desire to own cars or change them out as often. Our love affair with cars is waning.

If I were a young person today I would not be setting my sights on an automobile assembly line job. Or any assembly line job for that matter. Better to focus in industrial automation, IT cyber security, finance, or health services.


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## AltaRed (Jun 8, 2009)

We are getting sidetracked off the main topic, but NAFTA has produced more GDP for all 3 countries than had we all hunkered down into fortress protectionism over the past 20 years. Virtually no manufacturing jobs will come back if NAFTA collapses and border tariffs go up. Automation is key to manufacturing survival at many levels, as it is in many other industries as well. It takes less people to drill oil wells today and less to operate oil sands plants as well. As mentioned elsewhere, Suncor and others will soon have totally driverless truck fleets in the mining industry. There are no more telephone operators either. 3D printing is also changing the world. 

Only the most uniformed of people in the economic workings of their country could believe that protectionism will bring back jobs.


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## ian (Jun 18, 2016)

Absolutely agree.


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## sags (May 15, 2010)

Trump got elected because people were fed up losing their jobs. My guess is they would disagree with the sentiments expressed here.


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## AltaRed (Jun 8, 2009)

sags said:


> Trump got elected because people were fed up losing their jobs. My guess is they would disagree with the sentiments expressed here.


Probably but they are not the sharpest knives in the drawer either. It will make no difference as they continue to lose jobs going forward regardless of who is president. The coal miners are a classic example. Snookered and hoodwinked into believing jobs would return when in fact coal fired generating stations continue to be retired and Appalachian coal production will continue to decrease.


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## TomB19 (Sep 24, 2015)

Most of my friends are Trump voters. I'm talking about AR, open carry, Trump voters. Suffice to say, I'm a tolerant friend. 

There are a few things going on but, as best I can tell, the primary motive behind voting Trump is being out of their heads with frustration over what is going on in government and wanting to back any potential disruption. They see Trump as a grenade they can lob into that arena.

There are several other things going on there also but this is one area I feel I can follow their line of thought.

And yeah, every one of them has started multiple facebook posts that start with the phrase, "Unfriend me right now if......" lol!


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## sags (May 15, 2010)

Protectionism has worked very well for China. We are past the point of regaining our lost industries and now have to figure out a way to tax the imports to pay our people not to work.


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## Eclectic12 (Oct 20, 2010)

AltaRed said:


> ... You have to make good products to sell them competitively with offshore product.


Neither of my examples were having any problems selling domestically or internationally ... and they didn't make the Central Canada news that I am aware of.


But yes, detailed stats as well as digging for a more complete picture would be better.


Cheers


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## TomB19 (Sep 24, 2015)

sags said:


> Protectionism has worked very well for China. We are past the point of regaining our lost industries and now have to figure out a way to tax the imports to pay our people not to work.


While this is the direction we are going, I think "have to" isn't accurate. We broadly agree but I think it will be interesting to see how the US makes out with Trump declaring a trade war with China. At this point, it appears China has backed down.


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## humble_pie (Jun 7, 2009)

sags said:


> Protectionism has worked very well for China. We are past the point of regaining our lost industries and now have to figure out a way to tax the imports to pay our people not to work.




sags respectfully i disagree. The above is way too pessimistic. You are posting about a morgue economy with a few near-corpses still twitching, but that's not the canada i see.

you've left out agriculture, it rivals mining as the biggest component of GDP i believe. Plus ag is sustainable. One can include fishing among important sustainable food product industries. Then there's forest products, not quite as sustainable in our cold northern climate but managed forests are doing OK. 

me i keep sounding the trumpet for a hemp fibre industry although so far nobody pays any attention. Tough long-strand hemp fibres have been used to make paper & textiles for thousands of years. They've even discovered knitted hemp shoes for a child in a 7th century viking burial mound. Hemp is a sustainable annual crop, easy to grow, pretty near disease-free & well-suited to our cold climate. 

with the age of e-com & coming soon drone delivery direct to our homes, re-usable hemp fibre shipping cartons make sense. Can be composted after final stage usage. Makes no sense cutting down all those trees to fabricate traditional cardboard.


as ian says, younger canadians can look to the brainiac industries - industrial automation applications, IT, cyber security, health care, finance:




ian said:


> Our auto industry has to export. They are facing three domestic threats. The first is automation and increased productivity. The latter is the key to continued wage increases. Other costs included in the cost of doing business are increasing disproportionately. Electricity being one of them. The third threat is the market. Millennials are not exhibiting the same desire to own cars or change them out as often. Our love affair with cars is waning.
> 
> If I were a young person today I would not be setting my sights on an automobile assembly line job. Or any assembly line job for that matter. Better to focus in industrial automation, IT cyber security, finance, or health services.



.


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## kcowan (Jul 1, 2010)

TomB19 said:


> They see Trump as a grenade they can lob into that arena.


I agree that that is the motivation of many Trump voters. But a good portion of those voters are unhappy with his actual methods. The best response is to attack his individual actions, not him personally.


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## fatcat (Nov 11, 2009)

i think attacking his actions is fine but its hard to know where to begin, as for attacking him, of course we all know obama endured vicious attacks for 8 straight years 

the chaos and damage he is doing to the republic is both destabilizing dangerous and inexcusable, he is the decider and the crazy, chaotic disconnected shite that is coming out of his "administration" (and the term really belongs in quotes since he actually just randomly spewing tweets rather than actually administering anything ... his daily schedule often shows nothing on it ... the guy is just basically watching tv)

a good example, scott pruitt wants to change auto emission standards and there are rules in place that go way back and are a substantial body of regulations

pruitt filed a 38-page brief that was entirely a cut and paste wish-list of comments by the auto industry and it is completely devoid of any research and scientific analysis to back it up and this despite a report by the epa that affirmed that auto industry is meeting its objectives 



> It concluded in July 2016 that the auto industry had handily met lower carbon-emission limits from 2012 through 2017—at lower cost and with more conventional technologies, requiring less costly electrification, than anticipated when the rules were drafted in 2010.
> Those conclusions were issued in July 2016 in the form of a 1,217-page Draft Technical Assessment Report


https://www.greencarreports.com/new...n-38-page-intention-vs-1217-pages-of-analysis

legal experts say that pruitts filing is so weak that it almost certainly will fail in court

https://www.nytimes.com/2018/04/07/climate/scott-pruitt-epa-rollbacks.html

pruitt is a bozo being led by a bozo ... the overall quality of trumps team is extremely poor with some few exceptions (nikki haley, mattis) and that always reflects the guy at the top


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## ian (Jun 18, 2016)

I get tired of the protect our industry folks. I recently read an NPR article that highlighted an example of the real issue. In 1980 it took 10 man hours to produce a ton of steel. Today, it takes 2 hours. Employment in the industry is down by 80 percent since that time. Hardly a surprise. The coal industry is not much different. 

Tariffs and trade agreements may help marginally for a limited period of time however the real issue is automation and our changing economy. Labour leaders and do nothing politicians will feed on the former to enhance their images and their chances of election/re-election. We need to address the real issue not the bogeyman.


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