After months of swaying, the Trump administration of the United States finally reached a consensus with Canada and Mexico to reach the USMCA. Some economists believe that this is an agreement that is favorable to the Canadian economy. As for the USMCA, there are clauses (called "* pills") that need to be notified to members in advance when they sign free trade talks with non-market economy countries. The negative impact on Canadian economy may not be as big as some people think. .


Pan Dilan, senior economist at GaveKal Dragonomics, said the USMCA terms are not much different from the original North American Free Trade Agreement (NAFTA). In July, the United States and the European Union urgently reached an agreement to postpone the implementation of automobile tariffs and continue to negotiate. This is to confirm that Trump is thunderous and rainy, and the initial price is extremely high, but finally What the United States has won is not really that much. Pan Dilan pointed out that on the most critical issue, USMCA retained the dispute mechanism of hate disputes in the United States, and Canada won a complete victory. The price paid by Canada is only to slightly open up its strictly protected dairy market, allowing more US dairy products to be imported into Canada, with a total value of about US$ 560 million per year, equivalent to 3.6% of the Canadian dairy market.


In addition, the USMCA gives Canada and Mexico much higher than the previous export of US car quotas, and Canada and Mexico will not have to pay tariffs on car imports to the United States for many years to come. Although USMCA gives US pharmaceutical companies a longer patent protection period, there is no big difference between what Canada is willing to accept in the Trans-Pacific Partnership Agreement (TPP).


Iris Au, an associate professor in the Department of Economics at the University of Toronto, Scarborough, said that after the USMCA was signed, it eliminated the uncertainties in Canada's trade prospects and helped boost Canada's economic growth. She agrees with Pandilan that although Canada needs to sell some local dairy products to US exporters, the ratio is limited.


Some people are worried that "* pills" will hinder Canada and China from continuing to discuss the free trade agreement between Canada and China. District Beauty believes that this may be too much concern and too early. She pointed out that after the suspension of the free trade agreement negotiations between Canada and China at the end of last year, they have more urgent needs to deal with. Moreover, the Canadian government does not appear to have reached an agreement on revisiting the free trade agreement with China. The Chinese side is working hard to cope with the economic growth slowdown and some of the obstacles encountered in the "One Belt, One Road" initiative. District Mei Shi continued to say that from the perspectives of market, geography, business culture and cooperation, the United States is far more important to Canada than China. Even if the Canada-China Free Trade Agreement brings huge potential benefits to Canada, it will take time to implement, and Canadian companies must realistically take into account the key US market. Further, limited to language, geography and business habits, it is still difficult for local companies to expand into the Chinese market.


District Mei Shi believes that "* Maru" is Trump's "by-product" for China, and it is necessary to restrict China's closer trade cooperation with other countries including Canada.


Pan Dilan pointed out that unlike other trade wars that Trump is free to launch, the confrontation between the United States and China is not mainly driven by Trump, but by a combination of strong trade protectionists and national security hawks. The people of these two factions have always worried that the rise of China will threaten the dominant position of the United States. They now find a rare opportunity to suppress China.


Pandilan continued, the challenge they faced was how to stop Trump from firing with other countries and instead focus on the real opponent of China. They let Trump gain a reputation for revisiting NAFTA, but it is also for their own benefit. Because this can help Trump establish an image of good negotiation and agreement, but at the same time it does not damage his tough image.


She added that an important constraint for NAFTA to revisit is that the largest export market in 36 states in the United States is Canada. Failure to reach an agreement will create a huge political loophole. In addition, Canada, Mexico and the EU countries are traditional American allies or friendly countries and will not pose a threat to the geopolitical dominance of the United States.


In contrast, the only trading partner of only five states in the United States is China. In the eyes of American hawks, China hopes to surpass the United States in key new technologies such as artificial intelligence, which is clearly a strategic competitor of the United States and aims to replace the US hegemony in Asia. In short, the power to drive the US-China confrontation is much stronger than the negotiating opponents of NAFTA and TPP, but the power to suppress this confrontation is much weaker.

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