stats
globeinteractive.com: Making the Business of Life Easier

   Finance globeinvestor   Careers globecareers.workopolis Subscribe to The Globe
The Globe and Mail /globeandmail.com
Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space


Search

space
  This site         Tips

  
space
  The Web Google
space
   space



space

  Where to Find It


Breaking News
  Home Page

  Report on Business

  Sports

  Technology

space
Subscribe to The Globe

Shop at our Globe Store


Print Edition
  Front Page

  Report on Business

  National

  International

  Sports

  Arts & Entertainment

  Editorials

  Columnists

   Headline Index

 Other Sections
  Appointments

  Births & Deaths

  Books

  Classifieds

  Comment

  Education

  Environment

  Facts & Arguments

  Focus

  Health

  Obituaries

  Real Estate

  Review

  Science

  Style

  Technology

  Travel

  Wheels

 Leisure
  Cartoon

  Crosswords

  Food & Dining

  Golf

  Horoscopes

  Movies

  Online Personals

  TV Listings/News

 Specials & Series
  All Reports...

space

Services
   Where to Find It
 A quick guide to what's available on the site

 Newspaper
  Advertise

  Corrections

  Customer Service

  Help & Contact Us

  Reprints

  Subscriptions

 Web Site
  Advertise

  E-Mail Newsletters

  Free Headlines

  Globe Store New

  Help & Contact Us

  Make Us Home

  Mobile New

  Press Room

  Privacy Policy

  Terms & Conditions


GiveLife.ca

    

PRINT EDITION
Why the U.S. ignores Canada's trade deal with 'non-market' Vietnam
space
space
By BARRIE MCKENNA
  
  

Email this article Print this article
Monday, November 26, 2018 – Page B1

There has been a lot of angst in Canada about the socalled "China clause" in the country's recently negotiated trade deal with the U.S. and Mexico.

Under the proposed U.S.-MexicoCanada Agreement, or USMCA, any country can quit the deal on sixmonths notice if another member enters a separate trade pact with a "non-market country."

Prime Minister Justin Trudeau and other top Canadian officials insist the clause will in no way limit its ability to pursue a free-trade deal with China.

Other trade experts see something more ominous - a potential U.S. veto over how Canada and Mexico conduct trade policy in the future. The U.S considers China a nonmarket country, arguing that export subsidies, foreign investment restrictions and the activities of its state-owned enterprises badly distort how prices are set in the country.

Well, guess what? The U.S. also brands Vietnam a non-market economy. And Canada recently ratified a major new trade agreement with Vietnam and 10 other Pacific Rim countries - the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Mexico is also a signatory of the trade pact.

So, surely, if the Americans had a problem with non-market countries, Canada would have got an earful from the Trump administration.

But it hasn't.

There are many possible reasons for the silence. Perhaps U.S. President Donald Trump and other officials have been too busy to notice, preoccupied as they were with the recent midterm elections and the constant turmoil inside the administration.

Perhaps Vietnam gets a pass because the USMCA has not yet been signed (although that could happen as early as this week).

More likely, the reason for the U.S. silence is because the clause isn't really about non-market countries, writ large. It is all about its escalating trade showdown with China.

The USMCA leaves it up to member countries to determine if another country operates as a market economy.

At the end of the day, the verdict is political.

The six-point test the U.S.

Commerce Department uses to determine whether a country has a non-market economy is highly subjective. It covers such factors as how wages and prices are set, characteristics of a country's currency, curbs on foreign investment and the role of government ownership in the economy.

But there are no hard and fast rules on how the test is applied.

For example, what amount of state intervention or foreign ownership control is permissible? After all, most countries routinely engage in these things.

The USMCA's non-market clause is in the agreement because the Trump administration wants to isolate China, which it believes has exploited the global trading system.

The United States is poised to impose another wave of tariffs that would result in duties of up to 25 per cent on virtually everything China sells.

Canada is not alone in fretting about the language in the USMCA. Several industry advisory groups that give input to U.S.

Trade Representative Robert Lighthizer expressed concern about the non-market-country clause. The Industry Trade Advisory Committee on Services - made up of companies such as Visa, FedEx, Walmart and the Motion Picture Association of America - opposed the clause, calling it "a blunt instrument to effectuate policy changes" that could wind up hurting U.S. companies.

Another advisory committee representing U.S. small businesses warned the Trump administration that the non-market rule could wind up killing the USMCA if Canada pursues a free-trade deal with China, exposing U.S.

companies to higher tariffs on their exports.

Beyond the symbolic value of aggravating the Chinese, the non-market-country provision is pointless. It's unlikely the U.S.

would ever invoke it. No U.S.

president would want to kill the USMCA just because Canada negotiated slightly better access for its wheat and lumber in China.

Worse, it could prove to be counterproductive. China is reportedly interested in joining the CPTPP, a move that would force it to play by stricter trade rules.

That's something the United States should want. After all, it helped write the CPTPP rules, before Mr. Trump abruptly pulled the U.S. out of the deal last year.

Unfortunately, Washington won't have a say whether China joins what would become the largest regional trade pact in the world.


Huh? How did I get here?
Return to Main Rob_Carrick Page
Subscribe to
The Globe and Mail
 

Email this article Print this article

space  Advertisement
space

Need CPR for your RSP? Check your portfolio’s pulse and lower yours by improving the overall health of your investments. Click here.

Advertisement

7-Day Site Search
    

Breaking News



Today's Weather


Inside

Rick Salutin
Merrily marching
off to war
Roy MacGregor
Duct tape might hold
when panic strikes


Editorial
Where Manley is going with his first budget




space

Columnists



For a columnist's most recent stories, click on their name below.

 National


Roy MacGregor arrow
This Country
space
Jeffrey Simpson arrow
The Nation
space
Margaret Wente arrow
Counterpoint
space
Hugh Winsor  arrow
The Power Game
space
 Business


Rob Carrick arrow
Personal Finance
space
Drew Fagan arrow
The Big Picture
space
Mathew Ingram arrow
space
Brent Jang arrow
Business West
space
Brian Milner arrow
Taking Stock
space
Eric Reguly arrow
To The Point
space
Andrew Willis arrow
Streetwise
space
 Sports


Stephen Brunt arrow
The Game
space
Eric Duhatschek arrow
space
Allan Maki arrow
space
William Houston arrow
Truth & Rumours
space
Lorne Rubenstein arrow
Golf
space
 The Arts


John Doyle arrow
Television
space
John MacLachlan Gray arrow
Gray's Anatomy
space
David Macfarlane arrow
Cheap Seats
space
Johanna Schneller arrow
Moviegoer
space
 Comment


Murray Campbell arrow
Ontario Politics
space
Lysiane Gagnon arrow
Inside Quebec
space
Marcus Gee arrow
The World
space
William Johnson arrow
Pit Bill
space
Paul Knox arrow
Worldbeat
space
Heather Mallick arrow
As If
space
Leah McLaren arrow
Generation Why
space
Rex Murphy arrow
Japes of Wrath
space
Rick Salutin arrow
On The Other Hand
space
Paul Sullivan arrow
The West
space
William Thorsell arrow
space





Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space

© 2003 Bell Globemedia Interactive Inc. All Rights Reserved.
Help & Contact Us | Back to the top of this page