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With primary election campaigns underway in the United States, candidates are already starting to make bold promises. It may be easy to watch from north of the 49th parallel thinking none of it really matters for Canadians; this however, is not correct. Businessman turned politician, Donald Trump is gaining traction among voters. One statement of note for Canadians is his position on the North American Free Trade Agreement, or NAFTA for short, which he may cancel if elected or at least renegotiate. This could be disastrous for both Canadian and Mexican manufacturers that rely on exporting their goods to the United States.
If high tariffs are added to goods manufactured in Canada and Mexico, it may become impossible for businesses to stay profitable. Canadian markets just don’t have the size needed for many manufacturers, and closing off the massive U.S. market would be very detrimental to many companies. NAFTA has been responsible for greatly boosting trade between Canada, the United States and Mexico with $337 billion dollars of trade between the 3 countries in 1993, before NAFTA was ratified, up to $1.182 trillion in 2011. Moving towards protectionism in the United States would in theory, keep jobs in the country. This would come at the expense of Canadian and Mexican businesses, forced to close because it was no longer profitable to export to other North American nations. The United States has to think carefully of the consequences for business owners and workers across North America before making a rash isolationist decision.
NAFTA has caused a rise of employment in North America by nearly 23%, and the benefits of this agreement are not limited to Canada and Mexico. U.S. based companies such as Caterpillar Inc., and Mary Kay Inc. have seen sales skyrocket thanks to the North American Free Trade Agreement. Politicians may critique this international agreement in order to gain political points, but it has truly helped countless people across North America.
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