Transcript: NAFTA in the Balance | Sep 07, 2018

Steve sits in the studio. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a gray suit, pale blue shirt, and checked blue tie.

A caption on screen reads "NAFTA in the balance. @spaikin, @theagenda."

Steve says MANY PEOPLE AGREED
THAT THE NORTH AMERICAN FREE
TRADE AGREEMENT NEEDED AN UPDATE.
THEN PRESIDENT DONALD TRUMP TOOK
THAT TO A WHOLE NEW LEVEL.
IT'S BEEN A WILD FEW MONTHS AS
MEXICO AND THE U.S. HAMMERED OUT
THEIR VERSION OF THE AGREEMENT.
NOW IT'S CANADA'S TURN IN THE
PRESSURE COOKER THAT IS
RENEGOTIATING A
MULTI-BILLION-DOLLAR TRADE DEAL.
JOINING US NOW ON THE UPS, DOWNS
AND SOMETIMES SIDEWAYS OF THE
NAFTA TALKS:
IN THE AMERICAN CAPITAL, VIA
SKYPE:
INU MANAK, SHE IS VISITING
SCHOLAR AT THE CATO INSTITUTE.

Inu is in her thirties, with long wavy brown hair. She's wearing glasses, a gray blazer and a green shirt. A wall banner behind her reads "CATO."

Steve continues IN OUR NATION'S CAPITAL:
CRAIG ALEXANDER, PARTNER AND
CHIEF ECONOMIST AT DELOITTE CANADA.

Craig is in his late forties, clean-shaven and bald. He's wearing glasses, a gray suit, blue shirt, and striped blue tie.

Steve continues AND HERE IN OUR STUDIO:
MARK WARNER, PRINCIPAL CANADIAN
AND AMERICAN TRADE LAWYER AT MAAW LAW...

Mark is in his fifties, clean-shaven, with short-cropped gray hair. He's wearing a gray suit, pale blue gingham shirt, and red tie.

Steve continues AND, JIM STANFORD, THE HAROLD INNIS INDUSTRY PROFESSOR IN
ECONOMICS AT McMASTER UNIVERSITY
AND HONORARY PROFESSOR OF
POLITICAL ECONOMY AT THE
UNIVERSITY OF SYDNEY IN AUSTRALIA.

Jim is in his fifties, clean-shaven, with short brown hair. He's wearing a gray suit, white shirt, and printed purple tie.

Steve continues JIM, ALWAYS DELIGHTED TO WELCOME YOU BACK TO THESE PARTS.
MARK, GOOD TO SEE YOU AGAIN.
CRAIG IN OTTAWA.
INU, FIRST TIME ON THE PROGRAM.
WE'RE GLAD TO HAVE YOU HERE.
LET'S PUT YOU TO WORK RIGHT AWAY
HELPING US UNDERSTAND SOME OF
THE INTRICACIES OF THESE
NEGOTIATIONS.
WE HEAR A LOT OF TALK ABOUT THE
SO-CALLED CHAPTER 19 OF NAFTA
AND WHY IT'S SO CRUCIAL TO THE
RESUMPTION OF THESE TALKS.
HELP US UNDERSTAND.
WHAT IS CHAPTER 19?

The caption changes to "Inu Manak. Cato Institute."
Then, it changes again to "Chapter 19 Deadlock."

Inu says SO CANADIANS ARE
VERY SIMILAR WITH THE SOFTWOOD
LUMBER DISPUTE AND THE FACT THAT
THAT DISPUTE RESULTED IN
ANTIDUMPING AND COUNTERVAILING
DUTIES BEING IMPOSED BY U.S.
AGENCIES.
NOW, NORMALLY WHAT HAPPENS WHEN
SUCH DUTIES ARE IMPOSED IS THAT
COMPANIES CAN BASICALLY COME TO
A U.S. DOMESTIC COURT AND APPEAL
THAT AGENCY DECISION.
WHAT CHAPTER 19 DOES IS SET UP A
SPECIAL APPEALS PROCESS THAT IS
AN AD HOC PANEL THAT CAN THEN
BASICALLY ACT JUST LIKE A TRADE
COURT IN THE UNITED STATES BY
REVIEWING THE APPLICATION OF
U.S. LAW AND THAT'S EXACTLY WHAT
CHAPTER 19 DOES RIGHT NOW.

Steve says AND IN YOUR VIEW,
DOES IT WORK?

A map of Washington DC pops up on screen.

Inu says WELL, IN THE '80s, WHEN
THIS WAS FIRST THOUGHT UP, THERE
WERE SPECIFIC PROBLEMS WITH THE
COURT OF NATIONAL TRADE.
FOR ONE, THEY TOOK TOO LONG TO
WORK OUT CASES.
THERE WAS SOME EVIDENCE THAT
THEY WERE BIASED AGAINST
FOREIGNERS, AND THAT THEY DIDN'T
HAVE ENOUGH EXPERTISE ON TRADE
MATTERS.
BUT LARGELY THAT'S BEEN
RESOLVED.
AND WHAT WE SEE WITH CHAPTER 19
IS THOUGH IT MAY HAVE BEEN
SUCCESSFUL IN THE EARLY YEARS,
WE STILL HAVE A SOFTWOOD LUMBER
PROBLEM AND WE STILL HAVE NOT
SOLVED THAT.
SO OVERALL I WOULD SAY THAT
CHAPTER 19 HASN'T WORKED FOR
CANADA AND THEREFORE IT'S NOT
REALLY THE HILL THEY WANT TO DIE
ON IN THESE NEGOTIATIONS.

Steve says MARK, WE CERTAINLY
HEAR THAT CANADA IS DIGGING IN
ITS HEELS AND WANTS CHAPTER 19
TO STAY.
IN YOUR VIEW, DOES IT WORK?

The caption changes to "Mark Warner. MAAW Law."

Mark says I THINK GOING
BACK JUST A LITTLE BIT EARLIER
THAN WHAT INU STARTED WITH.
WE PUT THIS IN THE CANADA-U.S.
TRADE AGREEMENT.
THAT WAS IN 1987-88.
SO IT'S BEFORE WE HAD A STRONGER
DISPUTE SETTLEMENT SYSTEM IN THE
WTO WHICH CAME ON BOARD IN...

Steve says THE WORLD TRADE
ORGANIZATION.

Mark says IF YOU TAKE THE TIME MACHINE
BACK TO 1997, YOU DEFINITELY
WANT CHAPTER 19 BECAUSE YOU HAD
NO WHERE ELSE TO GO.
NOW EVEN THOUGH TRUMP MAKES
NOISE ABOUT THE DISPUTE
SETTLEMENT SYSTEM, THE AMERICANS
CONTINUE TO PLAY IN THAT SYSTEM
IN TERMS OF RESPONDING TO
DISPUTES AND THAT SORT OF THING.
THE QUESTION IS: WHAT DOES
CHAPTER 19 GIVE US NOW, NOW THAT
WE HAVE THAT WTO SETTLEMENT
SYSTEM, I DON'T THINK IT GIVES
US VERY MUCH.
IN OTHER WORDS, WHAT ARE WE
TRADING FOR?
WE'RE TRADING FOR SOMETHING WE
KNOW, AND SOFTWOOD LUMBER IS A
BIG CASE THAT INU MENTIONED, THE
U.S. HASN'T REALLY FOLLOWED WHAT
THEY'VE BEEN TOLD TO DO IN
CHAPTER 19, THERE ARE QUESTIONS
OF CONSTITUTIONALITY, AND EVERY
TIME WE GET A RULING LIKE
SOFTWOOD LUMBER, A LAWYER SUCH
AS MYSELF WILL GO RUNNING OFF TO
THE COURT AND SAYING IT'S
UNCONSTITUTIONAL AND CANADA WILL
HAVE TO FIND SOME OTHER
SETTLEMENT.
THE QUESTION IS WHAT IS IT WORTH
TO US?
IT'S WORTH A LOT TO THE PEOPLE
WHO NEGOTIATE IT, WITH ALL DUE
RESPECT TO THEM.
IT WAS A SINGULAR ACHIEVEMENT IN
1987 AND THERE'S A LOT OF PRIDE
OF AUTHORSHIP AROUND IT.

Steve says LET'S GET CRAIG
ALEXANDER TO WEIGH IN ON THIS.
IS THIS SOMETHING THE TRUDEAU
GOVERNMENT OUGHT TO BE DIGGING
ITS HEELS IN?

The caption changes to "Craig Alexander. Deloitte Canada."

Craig says I THINK CHAPTER 19 IS SOMETHING WORTH FIGHTING FOR.
I'M NOT SURE I'D BE WILLING TO
SACRIFICE NAFTA OVER IT.
AT THE END OF THE DAY, THE ISSUE
IS REALLY HAVING THE OPTION TO
TAKE A TRADE DISPUTE TO AN
INDEPENDENT ARBITRATOR TO GET TO
A RESOLUTION.
YES, YOU KNOW, THERE ARE OTHER
OPTIONS.
YOU KNOW, THE... YOU CAN GO TO
THE U.S. COURT SYSTEM AND, YOU
KNOW, WE HAVE SEEN THAT IN
RECENT YEARS THAT HAS WORKED
PERFECTLY FINE.
BUT THERE'S NO GUARANTEE THAT
THE TIDE WON'T SHIFT.
AND WE COULDN'T SEE THE U.S.
COURT SYSTEM GO BACK TO BEING
BIASED.
SO YOU CAN GO TO THE WTO, BUT
THE ARBITRATION PROCESS, YOU
KNOW, IN THEORY, SHOULD BE
FASTER.
SO I THINK IT'S A USEFUL TOOL,
BUT I DON'T THINK I'D BE WILLING
NECESSARILY TO SACRIFICE NAFTA
OVER.

Steve says JIM, WHAT'S YOUR VIEW?

The caption changes to "Jim Stanford. McMaster University."

Jim says WELL, STEVE,
I DON'T THINK WE SHOULD BE UNDER
ANY ILLUSIONS THAT THE U.S.
GOVERNMENT, WHETHER IT WAS TRUMP
IN CHARGE OR SOMEBODY ELSE, IS
EVER GOING TO BE TOTALLY HELD TO
ACCOUNT BY SOME KIND OF NEUTRAL
INTERNATIONAL BODY.
THAT JUST ISN'T THE REALITY OF
HOW TRADE POLITICS WORKS.
SO I THINK IT WAS NAIVE IN THE
FIRST PLACE, IN '87, WHEN THE
CANADIANS WENT IN, AND THIS IS
WHAT IT WAS ALL ABOUT.
MULRONEY, PRIME MINISTER
MULRONEY AT THE TIME, PROMISED,
WE WILL GET EXEMPTION FROM U.S.
TRADE ACTIONS IF WE JOIN THIS
FREE TRADE DEAL.
THAT'S WHY WE GAVE UP OUR ENERGY
AND ALL THE OTHER THINGS WE GAVE
UP IN THAT AGREEMENT, AND IT
NEVER REALLY WORKED.
BUT IT WON'T REALLY WORK WITH
THE WTO EITHER.
SOMEONE LIKE TRUMP OR SOMEONE
WHO COMES AFTER TRUMP CAN
EQUALLY THUMB THEIR NOSE AT
THOSE TRADE RULES AND SAY, NO,
I'M GOING TO COME DOWN, FOR
USUALLY POLITICAL REASONS, ON
THE SIDE OF SOME AMERICAN
CONSTITUENCY THAT WE WANT TO
PROTECT.
SO THE IDEA THAT THERE WILL EVER
BE A NEUTRAL TRADE RULE SYSTEM
THAT CAN HOLD PEOPLE LIKE TRUMP
TO ACCOUNT I THINK IS NAIVE.
CHAPTER 19 HASN'T LIVED UP TO
IT.
NEITHER HAS THE WTO, FRANKLY.

Steve says WHILE YOU'VE GOT THE
FLOOR I WANT TO STICK WITH YOU
BECAUSE YOU'RE THE CAR MAN HERE.
YOU SPENT MANY YEARS WITH THE
CANADIAN AUTO WORKERS.
ONE OF THE THINGS WE HAVE SEEN
NOW IS THAT THE UNITED STATES
WANTS TO INCREASE THE PERCENTAGE
OF CARS THAT MUST BE MADE FROM
NORTH AMERICAN SOURCES, I GATHER
THE FIGURE IS CURRENTLY 62.5 percent.
THE UNITED STATES HAS PROPOSED
RAISING THAT TO 85 percent.
WHAT IMPACT WOULD THAT HAVE ON CANADA?

The caption changes to "Auto tariff threat."

Jim says I THINK POTENTIALLY, IF IT
WAS PART OF A BALANCED THREE-WAY
DEAL, IT COULD BE VERY
BENEFICIAL FOR THE CANADIAN
INDUSTRY.
IT MEANS YOU'RE GETTING MORE
NORTH AMERICAN CONTENT IN ALL
THE VEHICLES THAT ARE MADE,
WHETHER IT'S IN MEXICO, THE
U.S., OR CANADA WHERE THE FINAL
ASSEMBLY OCCURS.
IT MEANS MORE STEEL, ALUMINUM,
PARTS AND THE POWER TRAIN WILL
BE MADE IN NORTH AMERICA.
AND I THINK THEY'VE MADE SOME
PROGRESS TOWARDS LIFTING THAT
OVERALL LEVEL AND ALSO TRYING TO
ENSURE IT DOESN'T ALL GO TO
MEXICO.
THIS WAS PART OF THE U.S.-MEXICO
TALKS THAT WERE OCCURRING, WAS
TO MAKE SURE THAT THE LOW WAGES
THAT ARE PAID IN MEXICO, BECAUSE
OF THE... OBVIOUSLY THE POVERTY
THERE AND THE LACK OF FREE TRADE
UNIONS, DOESN'T SUCK ALL THE
INVESTMENT DOWN THERE.
POTENTIALLY THAT COULD BE
BENEFICIAL.

Steve says WE SHOULD JUST GET A
LITTLE MORE SPECIFIC ON THAT.
I GATHER PRESIDENT TRUMP WANTS A
PROVISION IN THE NEW AGREEMENT
THAT SAYS YOU'VE GOT TO PAY YOUR
WORKERS 16 BUCKS AN HOUR U.S. OR
ELSE YOU CAN'T BE PART OF THE AGREEMENT?

The caption changes to "Jim Stanford, @JimboStanford."

Jim says AS I UNDERSTAND IT... AND OF
COURSE IT'S NOT PUBLIC, SO WE
DON'T SEE THE DETAILS... IT
WOULD BE A CERTAIN PROPORTION OF
THE CAR HAS TO BE MADE BY PEOPLE
WHO ARE MAKING AT LEAST 16 dollars AN HOUR.

Steve says THAT SEEMS TO TAKE AIM AT MEXICO, OBVIOUSLY.

Jim says EXACTLY.
THAT PROPOSAL ORIGINALLY CAME
FROM THE TWO AUTO UNIONS IN
CANADA AND THE UNITED STATES,
UNIFOR AND THE UNITED AUTO
WORKERS PUT FORWARD THAT IDEA
AND IN FACT IT GOT TAKEN UP IN
THE DISCUSSIONS.
IT IS IN A WAY A WAY TO MAKE
SURE THE WHOLE INDUSTRY DOESN'T
FLOW SOUTH TO MEXICO FOR LABOUR
COST REASONS ALONE.
THAT COMBINED WITH OTHER
MEASURES SUCH AS STRENGTHENING
REQUIREMENTS ON MEXICO TO ALLOW
FREE TRADE UNIONISM, WHICH ISN'T
THE CASE TODAY, THOSE I THINK
COULD ENSURE THAT THE OVERALL
NORTH AMERICAN INDUSTRY REMAINS
MORE BALANCED ACROSS THE THREE
COUNTRIES, RATHER THAN MIGRATING
SOUTH, AS HAS BEEN THE CASE.

Steve says LET'S GO BACK TO
WASHINGTON.
INU, WHERE ARE YOU WITH REGARD
TO WHAT'S HAPPENING WITH THE CAR
ASPECT OF NAFTA RIGHT NOW?

The caption changes to "Inu Manak, @inumanak."

Inu says I THINK IT'S
POTENTIALLY PROBLEMATIC TO
INCREASE THE RULE OF ORIGIN
CONTENT REQUIREMENT FOR NAFTA.
IF YOU LOOK AT RULES OF
ORIGINAL, THEY'RE ALREADY MORE
STRINGENT THAN MANY IN THE WORLD
AND THE PROBLEM IS THAT
INCREASING NORTH AMERICAN
CONTENT KIND OF WORKS COUNTER
PRODUCTIVELY TO THE WAY THAT
GLOBAL SUPPLY CHAINS NOW WORK
TODAY.
THERE'S A LOT OF INPUTS THAT WE
GET FROM EUROPE, FROM ASIA, AND
THAT'S GOING TO PUSH THOSE OUT
OF IT.
THE CURRENT REQUIREMENTS PUT
FORWARD 75 percent ON NORTH AMERICAN
AUTO REQUIREMENT.
MEXICO WOULD PROBABLY MEET ABOUT
70 percent OF THAT.
BUT 30 percent THEN WOULD... 2.5 percent MOST
FAVOURED NATIONS TARIFF THAT
BASICALLY ALL COUNTRIES THAT
DON'T HAVE A TRADE AGREEMENT IN
THE UNITED STATES HAVE TO PAY.
THAT'S GOING TO BE A TAX ON
THOSE ADDITIONAL AUTOS AND I
THINK THAT'S GOING TO BE A MAJOR
PROBLEM.

The caption changes to "Connect with us: Twitter: @theagenda; Facebook, agendaconnect@tvo.org, Instagram."

Steve says MARK, LET'S PLAY
THIS OUT.
PRESIDENT TRUMP CAME INTO OFFICE
PLEDGING TO DO SOMETHING FOR
THE, FOR EXAMPLE, AUTO WORKERS
IN THE UNITED STATES WHO HAVE
LOST THEIR JOBS BECAUSE THEY
WERE MAKING... WHATEVER... 25,
30 BUCKS AN HOUR COMPARED TO
THE FOLKS IN MEXICO MAKING 3 dollars AN
HOUR AND OBVIOUSLY THE JOBS WENT THERE.
CAN NAFTA ADDRESS THAT?

Mark says WELL, IT CAN'T COMPLETELY.
PARTLY WHAT'S GOING TO END UP
HAPPENING IS COMPANIES ARE
EITHER GOING TO MAKE A DECISION
WHETHER THEY'RE GOING TO GO
ALONG WITH THESE RULES OF ORIGIN
OR THEY'LL PAY, AS INU SAID, THE
MFN TARIFF.
ALSO TRUMP HAS THREATENED THIS
25 percent NATIONAL SECURITY TARIFF ON
AUTOS.
HE HASN'T DONE IT YET.
HE HAS THE AUTHORITY TO DO IT.
HE HASN'T DONE IT.
AND I GUESS THE QUESTION WOULD
BE, IF TRUMP WERE TO SEE THAT
THE PRODUCTION PATTERNS DON'T
CHANGE, WOULD HE, ON NEW
PRODUCTION, HAMMER THEM WITH
THAT 25 percent TARIFF?
SO FAR, IN TERMS OF THE
U.S.-MEXICO PIECE, HE'S LEFT
HIMSELF THAT OPTION.
ON THE MARGINS PROBABLY IT'S
GOING TO END UP LEADING TO MORE
AUTOMATION IN MEXICO.
FEWER MEXICAN WORKERS.
I'M NOT SURE IT'S GOING TO
CHANGE THE FUNDAMENTAL PATTERN
OF FORCING PARTS IN MEXICO.

Steve says CRAIG, WE DON'T KNOW
IF THIS STORY IS TRUE.
PRESIDENT TRUMP SAID IT THE
OTHER DAY.
HE SAID WHENEVER NEGOTIATIONS
GET STICKY WITH CANADA, HE HOLDS
UP A PICTURE OF A CHEVY IMPALA,
TO SAY YOU BETTER WATCH OUT, IF
YOU DON'T DO WHAT WE LIKE WE'LL
PUT A 25 percent TARIFF ON THIS THING
AND SEE HOW MANY YOU SELL.
WHAT KIND OF IMPACT IS THE CAR
THING HAVING RIGHT NOW ON TRYING
TO GET NAFTA TO THE FINISH LINE?

Craig says WELL,
AUTOS ARE KEY PARTS OF THE
DISCUSSIONS.
FROM A CANADIAN ECONOMY POINT OF
VIEW, YOU KNOW, THE RISK OF
HAVING A 25 percent TARIFF PUT ON
CANADIAN AUTO SHIPMENTS TO THE
UNITED STATES AND SAY A 10 percent
TARIFF ON PARTS WOULD BE REALLY
SIGNIFICANT.
IT WOULD LOWER ECONOMIC GROWTH
IN CANADA BY PROBABLY HALF A
PERCENTAGE POINT.
BUT BECAUSE OF THE CONCENTRATION
OF THE AUTO SECTOR IN ONTARIO,
IT COULD ACTUALLY KNOCK ABOUT 2
POINTS OFF OF ONTARIO'S ECONOMIC
GROWTH, AND THAT LIKELY WOULD
ACTUALLY LEAD TO A MILD
RECESSION IN ONTARIO.
SO WHEN PRESIDENT TRUMP MAKES
THE THREAT OF APPLYING TARIFFS
ON AUTOS, HE IS MAKING A THREAT
THAT WOULD CARRY ECONOMIC HARM.
BUT THE CHALLENGE IS THAT IT
WOULD ALSO HURT AMERICA VERY
SIGNIFICANTLY BECAUSE WE REALLY
DO HAVE NORTH AMERICAN SUPPLY
CHAINS.
PARTS THAT GO INTO CREATING A
FINAL VEHICLE CROSS THE BORDER
MANY TIMES, AND AS A
CONSEQUENCE, YOU KNOW, THE
TARIFFS WOULD HURT CANADA, BUT
THEY WOULD ALSO HURT THE U.S.
AUTOMAKERS VERY SEVERELY.
AND I THINK THAT, IN A SENSE,
YOU KNOW, WATERS DOWN THE
THREAT.
SO IT IS A CREDIBLE THREAT BUT
IT'S ALSO ONE THAT YOU NEED TO
KEEP IN PERSPECTIVE IN TERMS OF,
HOW WOULD CONGRESS FEEL ABOUT
THESE TARIFFS BEING APPLIED ON
CANADIAN VEHICLES THAT ARE PART
OF A NORTH AMERICAN SUPPLY CHAIN
THAT WOULD HURT U.S. PRODUCERS
IN A VERY SIGNIFICANT WAY AS WELL?

Jim says STEVE, LET ME
JUMP IN ON THE STORY OF THE
IMPALA WHICH IS KIND OF INTERESTING.
I THINK CHRYSTIA FREELAND SHOULD
HOLD UP A PICTURE OF AN F-150
PICKUP TRUCK AND A SPORT
UTILITY.
THE REALITY IS IN ADDITION TO
THE SUPPLY CHAIN THAT CRAIG
MENTIONED THE AMERICANS SELL A
HUGE AMOUNT OF VEHICLES BACK IN
CANADA.
WHAT DO THEY THINK IS GOING TO
HAPPEN IF THEY PUT A 25 percent TARIFF
ON VEHICLES FROM US?
CLEARLY THE REVERSE IS GOING TO
HAPPEN FROM CANADA AS WELL.

Steve says THE CANADIAN
GOVERNMENT WOULD PUT TARIFFS ON
THE AMERICAN PRODUCT?

Jim says THAT'S BEEN THEIR RESPONSE SO
FAR TO ALL OF TRUMP'S OTHER
UNILATERAL THINGS.
WE OBVIOUSLY CANNOT STOP THE
AMERICANS FROM CUTTING OFF THEIR
NOSE TO SPITE THEIR FACE, IF
THAT'S WHERE THE PRESIDENT WANTS
TO GO.
BUT IN ECONOMIC TERMS, THERE'S
NO LOGIC FOR THE AMERICANS TO DO
THAT.
IT IS ABOUT PRE-BARGAINING
THREATS FROM TRUMP.

The caption changes to "Mark Warner, @MAAWLAW."

Mark says I THINK THIS
IS WHERE YOU HAVE TO BE VERY
CAREFUL IN CANADA ABOUT THIS.
IN THE PAST WE'VE HAD TRADE
DISPUTES WITH THE UNITED STATES,
WE'VE DEALT WITH AN AMERICAN
TRADE ARCHITECTURE THAT HAS A
RELATIVELY FREE TRADING
PRESIDENT AND A RELATIVELY
PROTECTIONIST CONGRESS.
SO THE STRATEGY HAS BEEN, LINE
UP THE DOMESTIC CONSTITUENCIES
IN THE UNITED STATES AND
CONGRESS WILL ACT.
TRUMP IS A FORMER CEO.
HE RAN HIS OWN COMPANY.
THE ONE PLACE WHERE HE CAN
ACTUALLY USE HIS FULL EXECUTIVE
AUTHORITY IS SOMETHING LIKE
THOSE NATIONAL SECURITY TARIFFS.
SO ALL OF THIS TALK ABOUT
CONGRESS STEPPING IN TO HELP US,
WHAT IT WOULD TAKE, STEVE, IN
REALITY, IS A VETO-PROOF
MAJORITY IN TWO HOUSES OF
CONGRESS.
THAT'S NOT GOING TO HAPPEN.

Steve says THAT DOESN'T EXIST.

Mark says RIGHT.
I THINK THIS IS WHAT CANADIANS
NEED TO KEEP IN MIND.
TRUMP HAS THAT POWER.
SO IF WE'RE NEGOTIATING WITH THE
UNITED STATES WITH THE IDEA, OH,
IT'S JUST A PRE-NEGOTIATION THREAT.
WE'RE GOING TO SHOW THEM
PICTURES AND TIT FOR TAT THREATS
ARE GOING TO MAKE THEM COME TO
THE TABLE, THAT MIGHT COME TO
THE TABLE IF YOU WERE DEALING
WITH THE CONGRESSPERSON FROM MICHIGAN.
YOU MIGHT COME TO THE TABLE IF
YOU'RE DEALING WITH SOMEBODY
FROM INDIANA.
THE AUDIENCE WE HAVE IS AN
AUDIENCE OF ONE, AND THAT'S
DONALD TRUMP.
THAT'S BEEN I THINK THE PROBLEM
IN THE CANADIAN APPROACH TO
THESE NEGOTIATIONS ACROSS THE
BOARD, IS THEY'VE TRIED TO DO
THESE END-RUNS AROUND HIM AS
OPPOSED TO REALIZING THAT HE HAS IT.
AND AS WE SAW ON STEEL AND ALUMINUM, HE'S PREPARED TO USE IT.
THAT'S WHY WE CAN'T OVERBARGAIN
FOR THINGS LIKE CHAPTER 19 OR
DAIRY OR CULTURE BECAUSE I THINK
THAT HE'S THE KIND OF GUY WHO
HAS SHOWN US THAT HE'S PREPARED
TO USE THE POWER THAT HE HAS.

Steve says LET ME PICK UP ON THAT.
YOU MENTION THE STEEL AND
ALUMINUM TARIFFS WHICH MR. TRUMP
HAS ALREADY MOVED ON.
INU, I'LL BRING YOU BACK IN AT
THIS POINT.
THERE HAVE BEEN PLENTY OF
AMERICAN STAKEHOLDERS IN THE
UNITED STATES WHO ARE
SIGNIFICANT PLAYERS IN THE
ECONOMY, WHO HAVE CONSTANTLY
REMINDED THIS PRESIDENT THAT
EVERY TIME HE PUTS A TARIFF ON
SOMEBODY ELSE, THE SOMEBODY ELSE
TENDS TO PUT ONE BACK ON
AMERICA, AND AT THE END OF THE
DAY, IT'S WORSE FOR THE AMERICAN
ECONOMY.
HE SEEMS NOT TO BE PERTURBED BY
THAT.
IT SEEMS NOT TO BE A FACTOR IN
HIS DECISION-MAKING.
WHY DO YOU THINK... WHY DO YOU
THINK THAT IS?

Inu says I'M NOT QUITE
SURE WHY EXACTLY THAT'S THE CASE.
I THINK THERE'S BEEN A LOT OF
PUSHBACK FROM U.S. INDUSTRY,
ESPECIALLY ON IMPOSITION OF THE
STEEL AND ALUMINUM TARIFFS.
BUT AT THE END OF THE DAY, THERE
ARE SPECIFIC INTERESTS THAT HE'S
TRYING TO SERVE AND THAT'S WHAT
HE'S CARVED THIS OUT FOR.
SO WE REALLY CAN'T DO ANYTHING
ABOUT THESE 232 TARIFFS RATHER
THAN TAKE A CHALLENGE TO THE WTO
AND HOPE THAT THAT PREVAILS.
BUT IN THE MEANTIME WHAT WE CAN
DO IS SIT DOWN AND NEGOTIATE AND
HOPE THAT THEY'LL LIFT THOSE
TARIFFS AS WELL AS PART OF THAT
NEGOTIATING.
I KNOW MINISTER FREELAND HAS
SAID IT'S A SEPARATE PROCESS,
BUT I THINK HE REALLY SEES THIS
AS LEVERAGE IN THE BARGAINING
AND NEGOTIATING PROCESS IN NAFTA.

Steve says LET ME GET YOU TO
FOLLOW UP WITH THIS.
OF COURSE IN THIS COUNTRY THE
CONVENTIONAL WISDOM IS WE IN
CANADA NEED THIS DEAL FAR MORE
THAN YOU IN THE UNITED STATES
NEED THE DEAL, AND IF THE
PRESIDENT GETS SUPER TOUGH
DURING NEGOTIATIONS, WE MAY JUST
HAVE TO BITE THE BULLET IN ORDER
TO GET SOMETHING AT THE END OF
THE DAY.
DO YOU AGREE WITH THAT ANALYSIS,
THAT AT THE END OF THE DAY,
CANADA IS GOING TO HAVE TO
SACRIFICE MORE TO GET A DEAL
THAN THE AMERICANS WILL BECAUSE
WE NEED IT MORE?

The caption changes to "The politics of trade."

Inu says I DON'T THINK IT'S
NECESSARILY TRUE THAT CANADA
NEEDS IT MORE THAN THE UNITED
STATES.
IN FACT, BOTH COUNTRIES HAVE A
RECIPROCAL TRADE RELATIONSHIP,
INTEGRATED SUPPLY CHAINS, AND AN
INTEGRATED NORTH AMERICAN MARKET
THAT THEY'RE PART OF.
SO I THINK GETTING RID OF NAFTA
WOULD BE THE EQUIVALENT OF THE
U.S. SHOOTING ITSELF IN THE
FOOT.
IT'S NOT GOING TO BE GOOD FOR
THE UNITED STATES.
I THINK THIS IS EXACTLY WHY A
NUMBER OF MEMBERS OF CONGRESS
HAVE BASICALLY SAID AND COME OUT
AND SAID THAT THEY WILL NOT
SUPPORT A BILATERAL NAFTA
AGREEMENT THAT DOESN'T HAVE
CANADA IN IT.
THEY WANT A TRILATERAL DEAL.
AND I THINK CONGRESS REALLY WILL
PUSH HARD ON MAKING THIS HAPPEN
AS MUCH AS THEY CAN.
SO I THINK CANADA WILL HAVE TO
GIVE SOMETHING.
BUT AT THE SAME TIME IT DOESN'T
HAVE TO GIVE EVERYTHING IN THIS
NEGOTIATION.

Watch us anytime: tvo.org, Twitter: @theagenda, Facebook Live."

Mark says THERE ARE TWO
STEPS TO THIS, TO PIGGYBACK OFF
MY PREVIOUS COMMENTS.
THERE ARE TWO SEPARATE ISSUES.
ONE ISSUE IS CAN TRUMP GET A NEW
NAFTA, REVISED NAFTA, BILATERAL,
OR ONE ALONE WITH MEXICO
THROUGH?
YES, CONGRESS COULD HAVE A LOT
TO SAY ON THAT.
THE THREAT... AND TRUMP GETS HIS
THREAT.
HE GETS WHAT HIS AUTHORITY IS.
HE HAS TWO PLACES WHERE HE CAN
COUNTER THAT.
ONE IS HE CAN USE HIS EXECUTIVE
AUTHORITY TO WITHDRAW FROM
NAFTA.
THAT WILL LEAD TO A LOT OF
LITIGATION AND LAWYERS WILL
DEBATE IT.
THE GENERAL VIEW, THE BETTER
VIEW I THINK FROM A LOT OF
AMERICAN LAWYERS IS HE HAS THAT
AUTHORITY, CERTAINLY TO
TERMINATE, TO GIVE NOTICE TO
CANADA AND MEXICO.
AND THEN WHAT HAPPENS TO THE
EXISTING NAFTA?
THAT'S HIS THREAT.
HIS OTHER THREAT WE TALKED ABOUT
IS THE THREAT TO GO FORWARD WITH
THOSE SECTION 232 TARIFFS.
EITHER ONE OF THOSE CASES WOULD
REQUIRE THE HOUSE AND THE SENATE
BASICALLY COUNTER MANNING HIM.
YES, THE VOTES ARE THERE PERHAPS
TO STOP HIM FROM REVISING NAFTA.
BUT IF HE GETS ANGRY AND SAYS YOU'RE NOT REVISING NAFTA ALONG
THE WAYS I LIKE, SO I'M JUST
GOING TO GET RID OF WHAT'S THERE
NOW AND HE'S SHOWN US THAT
CAPRICIOUSNESS.
THAT'S WHY I GET A LITTLE BIT
CONCERNED THAT WE PUSH BACK A
LITTLE BIT TOO HARD IN CANADA
AND THINK ALL OF THESE
CONGRESSIONAL PEOPLE RIDE TO THE
RESCUE.
UNLESS WE CAN BE SURE THAT THEY
RIDE TO THE RESCUE IN A VETO
VETO-PROOF WAY, THESE ARE
DANGEROUS THREATS WE'RE MAKING.

Steve says YOU KNOW THAT IN
CANADA, AT LEAST MOST OF THE
VOICES I HEAR IN CANADA QUOTED
ON THIS ARE SAYING THE PRESIDENT
IS BEING A BULLY AGAINST CANADA.
NUMBER ONE, DO YOU AGREE WITH THAT?
IF SO, NUMBER TWO, WHAT ARE WE
SUPPOSED TO DO ABOUT IT?

The caption changes to "Craig Alexander, @CraigA_Eco."

Craig says I THINK
TRUMP IS TRYING TO BARGAIN FOR
THE BEST DEAL HE CAN GET WITH
THE MOST ADVANTAGE FOR AMERICA,
AND IT'S COMING ACROSS AS
BULLYING.
BUT YOU CAN UNDERSTAND WHAT THE
INTENT IS.
BUT I WOULD ARGUE THAT, YOU
KNOW, WHILE THERE IS THIS THREAT
THAT HE COULD PUT TARIFFS ON
CANADIAN... THE CANADIAN AUTO
SECTOR, ON SORT OF A NATIONAL
SECURITIES GROUND, BECAUSE HE'S
USING... JUST WITH STEEL AND
ALUMINUM, HE'S USING SORT OF A
WTO LOOPHOLE TO BE ABLE TO APPLY
THESE TARIFFS.
BECAUSE CLEARLY, CANADIAN AUTO
EXPORTS TO THE UNITED STATES DO
NOT POSE A NATIONAL SECURITY
THREAT.
BUT AT THE SAME TIME, WHILE WE
HAVE TO BE MINDFUL THAT HE DOES
HAVE THE CAPACITY TO PUT THOSE
VERY PAINFUL AND ECONOMICALLY
HARMFUL TARIFFS ON CANADIAN
AUTOS, LET'S REMEMBER THAT WE'RE
ACTUALLY NEGOTIATING A NAFTA
THAT HAS TO SURVIVE WHAT WE WANT
TO BASICALLY BE A NEW DEAL
THAT'S GOING TO LAST FOR
DECADES.
WE'RE TRYING TO RENEGOTIATE A
NAFTA THAT WE'RE GOING TO LIVE
WITH LONG AFTER HIS TERM IS
OVER.
AND IF CANADA GIVES UP A LOT AT
THE BARGAINING TABLE NOW, IT
COULD BE VERY HARD TO ACTUALLY
MAKE MODIFICATIONS AFTERWARDS,
AFTER TRUMP HAS GONE.
SO, YOU KNOW, IT IS IMPORTANT
FOR CANADA AT THE NEGOTIATIONS
TABLE TO, YOU KNOW, GET THE BEST
DEAL THEY CAN FOR CANADA AND IN
A SENSE STAND UP TO THE PRESSURE
THAT THE PRESIDENT IS PUTTING ON
US.
BUT WE DO NEED TO BE MINDFUL OF
THE FACT THAT THIS ISSUE AROUND
APPLYING TARIFFS ON A NATIONAL
SECURITY BASIS IS SOMETHING HE
CAN DO OUTSIDE OF THE NAFTA
PROCESS.

Steve says JUST BEFORE I GET
JIM STANFORD IN FOR HIS COMMENT
ON THIS, LET ME DO A QUICK
FOLLOW-UP WITH YOU, CRAIG.
WE WELL REMEMBER NEARLY 30 YEARS
AGO, BRIAN MULRONEY WALKED AWAY
FROM THE TABLE.
HE HAD HIS NEGOTIATOR SIMON
REISMAN ACTUALLY LEAVE THOSE
FREE TRADE NEGOTIATIONS WITH THE
UNITED STATES, AND HE BELIEVED
IN HINDSIGHT THAT LED THE
AMERICANS TO GET MORE SERIOUS
AND EVENTUALLY GET TO THE FINISH LINE.
ANYBODY TALKING THAT WAY THIS TIME?

Craig says I DON'T
KNOW IF THEY'RE TALKING THIS WAY
BUT, YOU KNOW, THIS IS A GOOD
POINT FROM A POINT OF VIEW OF
PEOPLE OUTSIDE THE BARGAINING
ROOMS TO BE MINDFUL OF.
WHAT YOU SEE IN TERMS OF THE
PUBLIC DISCOURSE, THE QUOTES AND
THE STATEMENTS, THIS IS ALL
POLITICAL POSTURING AND
POSITIONING, RIGHT?
EVERY TRADE DEAL COMES DOWN TO
THE ELEVENTH HOUR.
EVERY TRADE DEAL IS ACTUALLY
DARKEST BEFORE IT'S SIGNED.
AT THE END OF THE DAY, I
WOULDN'T BE SURPRISED IF THE
U.S. OR CANADA STORMS AWAY FROM
THE BARGAINING TABLE BEFORE WE
ACTUALLY REACH A DEAL.
SO WE NEED TO BE A LITTLE
CAREFUL IN TERMS OF HOW WE
RESPOND TO THE NEWS WE'RE
GETTING IN TERMS OF HOW THE
NEGOTIATIONS ARE GOING.

Steve says JIM, THANKS FOR YOUR PATIENCE.

Jim says I AGREE WITH
CRAIG THAT IT IS ABOUT
POSITIONING FOR BARGAINING AND
IT HAPPENS IN ANY KIND OF
BARGAINING PROCESS.
I'VE SEEN IT IN A LOT OF
LABOUR-MANAGEMENT NEGOTIATIONS.
YOU CAN GO TO THE FLEA MARKET
AND NEGOTIATE OVER A USED COFFEE
TABLE.
AND IF YOU GO INTO THAT
NEGOTIATION SAYING, "I'M GOING
TO DEAL WITH YOU NO MATTER
WHAT," YOU'RE GOING TO GET TAKEN
TO THE CLEANERS.
SO BOTH SIDES HAVE TO BE IN A
POSITION TO SAY, "NO, I'M NOT
GOING TO ACCEPT ANY DEAL," AND
IT SEEMS TO ME THAT'S EXACTLY
WHAT THE CANADIANS HAVE ALREADY
SAID.
WE WILL SIGN A DEAL IF IT'S GOOD
FOR CANADA BUT WE'RE NOT GOING
TO SIGN ANY DEAL.
I THINK THAT'S APPROPRIATE.
ESPECIALLY GIVEN THE ECONOMIC
REALITY UNDERPINNING IT, IS THAT
THE AMERICANS DO AT LEAST GET AS
MUCH BENEFIT FROM THE TWO-WAY
TRADE RELATIONSHIP DOES AS
CANADA DOES.
NO DOUBT ABOUT IT.

Steve says 673 BILLION dollars A YEAR
IN TRADE BETWEEN OUR TWO COUNTRIES.
THERE IS SO MUCH AT STAKE HERE.

Jim says THAT'S NOT THE WHOLE OF IT EITHER.
THAT'S THE TWO-WAY TRADE IN
MERCHANDISE.
BUT THERE'S TENS OF BILLIONS OF
TWO-WAY TRADE IN SERVICES, WHERE
THE AMERICANS HAVE THE
ADVANTAGE.
WE HAVE A SMALL SURPLUS ON GOODS
TRADE, SMALL RELATIVE TO THE
OVERALL FLOW.
THE AMERICANS HAVE A SURPLUS ON
SERVICES TRADE.
THEN THERE'S THE FOREIGN
INVESTMENT.
THE AMERICANS TAKE BACK
26 BILLION dollars A YEAR IN NET PROFIT
ON THEIR FOREIGN INVESTMENTS
HERE RELATIVE TO WHAT WE TAKE
BACK ON OUR INVESTMENTS FROM
AMERICA.
SO ALL OF THAT TOGETHER, THEY'VE
GOT AT LEAST AS MUCH AS STAKE
HERE.
WHETHER TRUMP IS ERRATIC OR NOT,
AT THE END OF THE DAY I THINK
THAT ECONOMIC SELF-INTEREST IS
GOING TO MEAN SOMETHING IN THE
U.S. CALCULATIONS.

Mark says WE HAVE TO
MAKE SURE WE'RE NOT TRYING TO
CONVINCE OURSELVES OF CERTAIN
THINGS.
THE GUY WE HAVE TO CONVINCE IS
THE GUY IN THE WHITE HOUSE.
IT IS IN NO SENSE THE SAME THAT
WE HAVE THE SAME HARM OR THE
SAME IMPORTANCE.
A THIRD OF OUR GDP COMES
ESSENTIALLY FROM EXPORTS TO THE
UNITED STATES.
THAT IS NOT TRUE OF THE UNITED
STATES.
WE LIKE TO TALK ABOUT A LOT...
THE GOVERNMENT'S TALKING POINT
ABOUT ALL THESE DIFFERENT STATES
THAT HAVE THE LARGEST
DESTINATION OF THEIR EXPORTS IN
CANADA.
MOST OF IT IS 10 percent.
THIS IS AN ASYMMETRICAL
RELATIONSHIP.
WE ARE ONE-TENTH THE SIZE.
I DON'T BELIEVE THE ARGUMENT WE
CAN MAKE THEM BLEED A LITTLE BIT
TOO.
WE WILL MAKE THEM BLEED A LOT
LESS.
WE SAY NEGOTIATIONS ALWAYS COME
DOWN TO THE ELEVENTH HOUR, THIS
IS WHERE WE GOT OURSELVES INTO
DIFFICULTY WITH THE MEXICANS.
THE MEXICANS HAVE A NEW
PRESIDENT COMING IN WHO DOESN'T
WANT TO SPEND HIS FIRST THREE
YEARS ARGUING ABOUT NAFTA.
WE CAN PUSH THIS OFF, DRAG THE
PUCK, WHATEVER METAPHOR YOU
LIKE, BUT TWO OF THE OTHER DANCE
PARTIES MAY HAVE A SENSE THAT WE
ALREADY ARE AT THE ELEVENTH
HOUR.
SO THE QUESTION FOR CANADA IS
ARE WE ACTUALLY GOING TO GIVE IN
ON CHAPTER 19, SOMETHING THAT
DOESN'T WORK, IN MY ESTIMATION.
IT WAS USEFUL IN '87.
OR ARE WE GOING TO FIGHT ABOUT
IT TO SAY WE'RE FIGHTING.
DAIRY, A LOT OF CANADIANS WOULD
BENEFIT FROM CHEAPER DAIRY.
ARE THE HOLDOUT ISSUES WORTH
HOLDING OUT FORGIVEN THE
IMPORTANCE OF THIS ECONOMIC
NATURE.
CULTURE?
THAT'S A NEW ONE THAT HAS COME BACK...

Steve says I WANT TO COME BACK
TO BOTH THINGS, THE DAIRY AND
CULTURE.
IN YOUR VIEW, WHAT'S THE
ABSOLUTE BOTTOM LINE?
WHAT'S THE ONE THING WE SHOULD
NOT GIVE IN ON REGARDLESS?

Mark says I'M NOT SURE I KNOW THE
ANSWER TO THAT.
I DON'T THINK THERE'S ANYTHING
ON THE TABLE NOW THAT WE SHOULD
HOLD OUT ON.
I MEAN, CHAPTER 19 TO ME IS
RIDICULOUS TO HOLD OUT ON.
I TOTALLY GET WHY MULRONEY
WALKED AWAY FROM THE TABLE ON
THAT IN '87.
EVERYBODY LOVES TO GO BACK TO
THAT HISTORICAL EXAMPLE.
WE WALKED AWAY FROM IT BECAUSE
WE DIDN'T HAVE THE WTO DISPUTE
SYSTEM THAT CAME INTO EFFECT IN
'95.
IT'S KIND OF A SILLY POINT.
WITH ALL DUE RESPECT TO YOU, BUT
OTHERS KEEP MAKING IT.
THE DAIRY PART, IT'S PRETTY
CLEAR TO MOST TRADE PEOPLE WHAT
WE HAVE TO DO TO GET OUT OF
DAIRY, IS PRETTY MUCH MAKE A
CONCESSION ALONG THE LINES AS WE
DID IN THE TRANS-PACIFIC
PARTNERSHIP.
LOOK IT, THAT'S NOT GOING TO
HURT US GREATLY, A FEW DAIRY
PRODUCERS, BUT IT'S PROBABLY
GOOD FOR THE CANADIAN ECONOMY
GENERALLY.
I DON'T REALLY SEE THE ISSUES...
HERE'S WHAT I THINK: ARE WE
TRYING TO SAVE THE FURNITURE OR
TRYING TO SAVE THE HOUSE THAT'S
BURNING?
I THINK WE'RE TRYING WITH THIS
ROUND OF NAFTA WITH THIS
INTERLOCUTOR TO SAVE SOME
FURNITURE.
IF YOU WANT TO LET THE WHOLE...
LET EVERYTHING GO UP IN FLAMES
AT THIS POINT, DOESN'T SEEM TO
MAKE SENSE TO ME.

Steve says INU, LET ME GET YOU
ON THIS.
THERE ARE GREAT DEBATES
HAPPENING IN CANADA ABOUT HOW
FIRMLY THE CANADIAN GOVERNMENT
OUGHT TO GO TO BAT FOR CULTURAL
INDUSTRIES, THE DAIRY INDUSTRY,
WE HAVE SPECIAL AND SPECIFIC
RULES ON THAT TO PROTECT THOSE
TWO THINGS.
THEY ARE LONG LEGACY FILES FOR
ANY CANADIAN FOREIGN MINISTER.
WHAT'S YOUR VIEW ON HOW HARD
CANADA OUGHT TO FIGHT TO KEEP
THOSE TWO THINGS UNDER THOSE
SPECIAL CONSIDERATIONS?

Inu says WELL, I THINK
CANADA REALLY HAS SHOWN THAT IT
CAN ACTUALLY MOVE ON SOME OF
THESE ISSUES.
WE'VE SEEN THAT AS PART OF THE
TRANS-PACIFIC PARTNERSHIP.
WE SAW THAT IN THE CANADA-E.U.
TRADE AGREEMENT.
I THINK THERE HAS TO BE SOME
FLEXIBILITY.
I THINK LARGELY WHAT WE SEE FROM
MINISTER FREELAND AND PRIME
MINISTER TRUDEAU HAS BEEN A LOT
OF NEGOTIATING BLUSTER.
WE'VE SEEN THAT ON THIS SIDE TOO
IN THE UNITED STATES.
SO I THINK THEY HAVE TO
BASICALLY RAMP UP THEIR RHETORIC
A LITTLE BIT TO SHOW THAT THEY
CAN HAVE A WIN WHEN THEY COME
BACK HOME.
AND THAT'S THE BIG ISSUE HERE.
SO I THINK A LOT OF THIS CAN BE
RESOLVED.
IT'S JUST A MATTER OF BOTH SIDES
COMING DOWN AND SAYING, WHAT'S
THAT COMPROMISE NUMBER?
THERE HAS TO BE A MEDIUM IN
BETWEEN THAT FIGURE THEY CAN
SETTLE ON IN BOTH OF THESE
ISSUES.
CULTURE MIGHT BE A DIFFICULT
ONE.
CANADA HAS BEEN ADAMANT AT
KEEPING THAT EXCEPTION IN.
MAYBE THEY CAN GET THAT IF
THEY'RE WILLING TO GIVE UP
CHAPTER 19.

Steve says JIM, SHOULD
AMERICANS BE ALLOWED TO BUY CTV
OR GLOBAL?

Jim says NO, CERTAINLY
NOT, STEVE.

Steve says YOU WANT TO KEEP THAT...

Jim says ABSOLUTELY.
I THINK IT'S ESSENTIAL TO OUR
IDENTITY AND HOW WE FUNCTION AS
A SOCIETY AND EXPLAINING WHY
WE'RE DIFFERENT THAN AMERICAN.

Steve says YOU'D GO TO THE WALL
FOR THOSE?

Jim says WE CAN GO TO THE WALL.
EVEN ON THINGS LIKE DAIRY.
THE AMERICANS HAVE THEIR OWN
HOLY GRAILS THEY'RE NOT
TOUCHING.
IF YOU WANT TO GET INTO
AGRICULTURAL PROTECTIONISM, GO
TO THE UNITED STATES AND LOOK AT
THE WHOLE LITANY OF RULES AND
LIMITS AND EVERYTHING ELSE
THAT'S THERE.
SO THERE'S A NATURAL
GIVE-AND-TAKE, WHERE THE TWO
SIDES HAVE TO SIZE UP WHAT'S
REALLY IMPORTANT AND WHERE CAN
THEY MAKE SOME PROGRESS?
AND AT THE END OF THE DAY IF
ECONOMIC RATIONALITY PREVAILS,
AND OF COURSE THAT'S AN IF, THEN
THEY WILL MAKE THEIR TRADE-OFFS
AND COME TO A DEAL.
SO THAT SHOULD BE POSSIBLE HERE.

Steve says LET ME GET TO CRAIG
ON THIS.
I HAVEN'T HEARD FROM YOU AS TO
HOW HARD NEGOTIATORS OUGHT TO GO
TO THE WALL TO PROTECT SUPPLY
MANAGEMENT, OUR DAIRY INDUSTRY,
AND OF COURSE OUR CANADIAN
CULTURAL EXEMPTIONS.

Craig says I THINK
WHAT WE'VE SEEN IS OVER TIME
ALMOST EVERY TRADE DEAL CANADA
ENGAGES IN, WE END UP ALLOWING
MORE FOREIGN ACCESS TO THE
CANADIAN SUPPLY MANAGEMENT
INDUSTRY.
WHEN WE NEGOTIATED FREE TRADE
WITH EUROPE, ONE OF THE
CONCESSIONS WE HAD TO MAKE WAS
TO ALLOW MORE EUROPEAN DAIRY
ACCESS IN CANADA.
UNDER TPP, IT WAS THE SAME
STORY.
SO I THINK WE CAN TELL WHERE THE
GLOBAL TRADE NARRATIVE LIES IN
TERMS OF SUPPLY MANAGEMENT.
I THINK ULTIMATELY OVER TIME...
I DON'T THINK THE CANADIAN
GOVERNMENT IS GOING TO BE
PREPARED TO GIVE UP SUPPLY
MANAGEMENT, BUT I THINK THEY'RE
LIKELY GOING TO END UP OR AT
LEAST CONSIDER GIVING GREATER
FOREIGN ACCESS AND THEN
ADDRESSING SOME OF THE IMPACT
THAT THAT HAS ON THE DOMESTIC
PRODUCERS IN ORDER TO RECOGNIZE
THE FACT THAT THIS IS GOING TO
CREATE ECONOMIC CHALLENGES FOR
THEM.
THE CULTURAL INDUSTRY ISSUE I
THINK IS DIFFERENT, RIGHT?
I THINK FROM AN ECONOMIC POINT
OF VIEW, I DON'T SEE IT BEING A
BIG ISSUE FOR THE UNITED STATES
IN TERMS OF ACCESS TO THE
CANADIAN MARKET, AND AT THE SAME
TIME, I THINK IT'S REALLY A
CANADIAN IDENTITY ISSUE.
AS AN ECONOMIST, I TEND TO BE
VERY MUCH IN FAVOUR OF FREE
TRADE AND OPEN MARKETS.
BUT WHEN IT COMES TO CULTURE, I
THINK THERE IS ACTUALLY A
LEGITIMATE ARGUMENT FOR WHY, YOU
KNOW, WHEN YOU'RE A RELATIVELY
SMALL COUNTRY THAT'S BASICALLY
THE SIZE OF CALIFORNIA WHEN YOU
THINK OF POPULATION AND ECONOMY
SIZE, YOU MIGHT WANT TO PROTECT
YOUR CULTURAL INDUSTRIES BECAUSE
IT IS PART OF THE CANADIAN
IDENTITY AND THE CANADIAN
CHARACTER. IT'S HOW CANADIAN
STORIES GET TOLD. IT'S HOW
CANADIAN HISTORY'S COMMUNICATED.
IT'S HOW CANADIAN NEWS IS
COMMUNICATED.

Steve says CRAIG, LET ME JUMP IN.
I'VE GOT 20 SECONDS LEFT, MARK.
CAN YOU WRAP IT UP?

Mark says I WANT TO PUT
IT AS A CAUTION.
I'M NOT SO SURE THAT THIS
CULTURE BUSINESS IS ACTUALLY AN
AMERICAN DEMAND. IT WASN'T IN
THEIR NEGOTIATING PRIORITIES.
IT HASN'T REALLY FIGURED IN A
LOT OF THE PUBLIC CONVERSATION
AROUND THE AGREEMENT UP UNTIL NOW.
I HAVE A FEELING THAT THIS IS
BEING PUT ON THE TABLE EITHER TO
MASK A CANADIAN CONCESSION THAT
THEY'LL MAKE ELSEWHERE OR TO
STRENGTHEN THE AMERICAN
BARGAINING POSITION ON THINGS
THEY REALLY WANT, YOU KNOW,
INTELLECTUAL PROPERTY LIKE
COPYRIGHT, TERM, AND NOTICE OF
TAKEDOWN AND BIOLOGICS AND
PHARMA. SO I'M A BIT SKEPTICAL
OF WHAT I SEE TO BE COMING
MOSTLY FROM CANADIAN SOURCES
ON CULTURE.

The caption changes to "Producer: Meredith Martin, @MeredithMartin."
Then, it changes again to "tvo.org/theagenda agendaconnect@tvo.org"

Steve says ONE THING I CAN SAY
IS I THINK OUR VIEWERS
UNDERSTAND THIS ALL A LOT BETTER
NOW THANKS TO THE FOUR OF YOU.
INU, WE THANK YOU FOR BEING WITH
US FROM THE CATO INSTITUTE IN
WASHINGTON, D.C.
CRAIG ALEXANDER, FROM THE
NATION'S CAPITAL. HE WITH
DELOITTE CANADA. JIM STANFORD,
WE LOVE IT WHEN HE VISITS US AS
HE SPENDS TOO MUCH TIME DOWN IN
AUSTRALIA. JIM, WE LOVE HAVING
YOU BACK. AND MARK WARNER, THE
PRINCIPAL OF MAAW LAW. HE'S A
CANADIAN AND AMERICAN TRADE
LAWYER EXPERT. GOOD TO HAVE ALL
FOUR OF YOU ON TVO TONIGHT.
THANK YOU.

Watch: NAFTA in the Balance