By Jamie Barrie W ith NAFTA securing the majority of business headlines these past months as Canada, the USA and Mexico head into round eight of talks that have led many observers to speculate that the Trump administration will withdraw from the 24-year- old deal. Considering this, the Conference Board of Canada is downplaying the negative that a NAFTA termination would have on Canada. Now don’t get us wrong, as there will be a negative impact should an agree- ment not be reached. However, the board predicts a 0.5 percent decline in the economy, and the loss of about 91,000 jobs with 85,000 of those within the first year, should the North American Free Trade Agreement be terminated. While the board’s best case scenario suggests a modest impact on the Canadian economy however, several possible reactions are possible that could further impact the economy, such as increased U.S. trade actions, including non-tariff barriers with the largest impact being the motor vehicle and parts exports industries.
Increased tariffs and a depreciating loonie would also boost the price of U.S. imports into Canada.
Investment could decline in the long term, as the collapse of NAFTA would hurt Canada’s ability to attract business invest- ment based on less access to the U.S. market, further affecting long-term economic growth.
Canada and Mexico still share the together everyone achieves more attitude towards NAFTA, but it is unsure what risks the current Trump administration will take on in order to make America great again.
SPOTLIGHT ON BUSINESS MAGAZINE • MARCH 2018
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