'China or The US?' Canada Has To Make A Choice Soon

U.S. President Donald Trump delivers remarks on the United States-Mexico-Canada Agreement (USMCA)
While the Trump administration was all praises for the revised NAFTA, some analysts said USMCA offered nothing radically new.

(Photo: REUTERS/Leah Millis)

Canada's ability to engage in a free-trade with China in the near future might be hindered by the recent North American Free Trade Agreement renegotiation. After the Trudeau government agreed to sign a revised NAFTA free trade deal, some analysts claimed that Canada also inadvertently agreed to join the United States President Donald Trump's trade war against China. 

After the new United States-Mexico-Canada Agreement was rolled out, President Trump's National Economic Council director Larry Kudlow asserted that the whole continent is now unified in combatting unfair trading practices. He even detailed the existence of a coalition that will specifically stand up to China. "There is a trade coalition of the willing that is going to fix a lot of broke areas of international trade [by] getting on the same page and co-operating. And that coalition will stand up to China," he said

This statement might cost Canada's chances of engaging in free trade with China, something that the former needs as well. Most officials in Canada have claimed that the most significant contention they have with Chinese trade is not that amount is too small, and therefore, they wanted more. Given Canada's desire to seek economic development and growth beyond the United States, a trade deal with China is crucial. Experts are now worried that the new NAFTA deal has just removed all these chances. 

In an editorial by the Globe and Mail, China may want to engage in a free trade deal with Canada, but NAFTA just created too many risks for this to happen. There are at the present, real worries that Canada just transformed itself into an "economic vassal" of the United States.  Under the new USMCA, the two partner states of Canada have the right and ability to investigate free trade deals that Trudeau's government will enter with any non-market country. According to analysts, this clause is undoubtedly written with China as the primary consideration or target.

Still, some analysts remain optimistic. They claimed that there is only a need to clarify terms. The relationship between the two economies have been described as mature, so this should not be a problem. Both can also benefit from mutually trading with each other. Even if there is no bilateral trade, the two can engage in plain old trade and growth can still ensue. For them, Canada might be in a crossfire between the two warring economic giants, but it has its development and growth to focus on instead of letting either decide what it should engage in or partner with.  

According to the former Canadian prime minister, Stephen Harper, however, it is apparent that the United States stands to benefit more from the new deal than Canada. 

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