Automotive News Canada - February 2020 - v2 - 11

11

* F E B R U A R Y 2020

U.S. election could put a stick in the spokes of USMCA
RATIFICATION OF THE NEW
North American trade pact
might appear inevitable, but
the auto industry should keep
its guard up as the United
States works through its 2020
election cycle.
Virtually every Canadian
auto-industry executive and
analyst I've spoken with since
the United States-MexicoCanada Agreement was written has expressed a similar
sentiment: It provides the
industry more certainty.
Whether they favour the trade
agreement or think it is flawed
or even a step back, just
about everyone agrees that
having an agreed-upon set of
rules is vastly preferable to
being completely unsure of
what those rules will be, as
we all were for much of 2017
and 2018.

wing, however, appears divided. Sen. Elizabeth Warren of
Massachusetts said during
the debate that she would
support the deal, calling it a
"modest improvement" over
NAFTA that could lead to further improvements down the
road.
However Sen. Bernie
Sanders of Vermont blasted
the trade deal as one that
would "result in the continuation of the loss of hundreds of
thousands of good-paying jobs
as a result of outsourcing."
Sanders also criticized it

for not doing enough on environmental issues.
That's worth noting
because Sanders in January
was rising in nationwide and
state-level polls and could be
emerging as the biggest threat
to Biden, the front-runner for
the Democratic nomination.
And if Sanders becomes the
nominee and defeats Trump,
Canada and Mexico could
soon find themselves negotiating with the United States
on trade yet again.
And then of course there's
Trump, whose erratic, unpre-

dictable behaviour as president means the door is
always open to setbacks on
trade. It's easy to imagine a
second-term Trump, emboldened by his reelection, making an impulsive decision that
could set back trade relations
or perhaps again using trade
as a bargaining chip to extract
concessions from Canada or
Mexico on any given issue.
So, breathe that sigh of
relief, but stay on your toes.
The North American trade
uncertainty might not necessarily be resolved. - ANC

Sen. Bernie Sanders is one U.S.
presidential hopeful who opposes the
USMCA. P H O T O : R E U T E R S

FROM TORONTO

JOHN IRWIN
COMMENT
This makes sense, obviously. The North American
auto industry has complicated, delicate supply chains
borne out of the original North
American Free Trade
Agreement. Going years without knowing whether those
supply chains could continue
to exist would be good for no
one.
But while it's fine to
breathe a sigh of relief, it
would be naive to think that
industry doesn't have to worry
about trade uncertainty in the
foreseeable future. And as
with the original NAFTA renegotiations that began in
2017, U.S.
politics can
Trade was
be blamed
for that.
a hot topic
The United
in the 2016
States is
U.S. election; going through
election
with a looming its
cycle, one
2020 election, that figures
to be just as
it's naive to
and
think that the heated
divisive as
USMCA is a
the 2016
election camdone deal.
paign, perhaps even
more so. As in 2016, trade
could be a major issue.
The Democratic Party is in
the midst of determining
which of its presidential candidates will be nominated to
battle President Donald Trump
in November. And if it wasn't
clear before, it was certainly
clear while watching January's
Democratic debate that the
party is far from united on
trade.
Unsurprisingly, the top candidates representing the party's moderate wing - former
Vice-President Joe Biden and
former South Bend, Ind.,
Mayor Pete Buttigieg - have
signaled support for the deal.
The party's progressive

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Automotive News Canada - February 2020 - v2

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