In the review of Canada’s U.S. trade pact, the most important factor is China

By Wolfgang Alschner, associate professor, University of Ottawa
The Globe and Mail
October 18, 2024
Category: Business & Politics
Region: Canada, United States

Regardless of who sits in the White House, the 2026 review over USMCA, the extension of the North American free-trade pact, will be dominated by a country that does not sit at the bargaining table: China. Yes, Canada’s dairy market, softwood lumber duties and Canada’s digital service tax will be thrown into the mix. But… In 2018, Canada was caught off guard by U.S. preoccupations with competition between the great powers. That resulted in USMCA’s “China clause,” discouraging free-trade agreements by the USMCA members with non-market economies. …In 2022, Jake Sullivan, the U.S. national security adviser, outlined the American economic security policy vis-à-vis China as a “small yard, high fence” strategy. …Canada can help keep the fence high, but only if the yard stays small. That maxim should ultimately appeal to both Canada and the U.S. …The USMCA review therefore provides an important opportunity to demarcate the yard and to reinforce the fence. [to access the full story a Globe and Mail subscription is required]

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