The successive ads of the president of the United States, of agreements established reference tariffs in the European Union and Japan, are causing questions about whether they are a road map for Canada to continue in commercial conversations.
The president of Trump and the European Commission, Ursula von der Leyen, described the bones of an agreement on Sunday.
It establishes tariffs through 15 percent in most European Union exports to the United States, together with a European commitment to invest $ 600 billion of the US. In the US economy and spend $ 750 billion in US energy products. UU., Although there is still a lot of small impression to come.
That makes it widely comparable to the agreement that Trump announced last week with Japan: a 15 percent rate through the board and a Japanese commitment to invest $ 550 billion in the United States.
Trump threatened to hit Europe with reference tariffs of 30 percent and Japan with 25 percent on August 1, so both commercial blocks are selling agreements as victories.
Because Canada faces the threat of 35 percent tariffs in some goods on the same date, does that mean that Canada should be pointing to a similar agreement?
Prime Minister Mark Carney certainly doesn’t say it. When asked if any next agreement will be “in the stadium” of these reference rates of 15 percent, he emphasized the differences between the commercial relationship of Europe and Canada with the United States.
“We are in a different position, and that is why these negotiations … are different,” said Carney on Monday, citing the geographical proximity of Canada and energy exports to the United States.
“Europe, in that agreement yesterday, promised to buy American energy,” he said at a press conference on Prince Eduardo Island. “The United States needs Canadian energy.”
When a journalist asked him if Canada could see a similar commercial agreement with the United States such as that of the European Union, which includes a 15 percent rate, Prime Minister Mark Carney said that Europe and Canada have different relations with the United States, particularly because the United States needs Canadian energy.
Tariffs through the board ‘difficult for Canada to accept’
There are many reasons why a reference tariff rate of 15 percent is not something for Canada Aspire, since its economy is proportionally much more dependent on the US market than Europe and Japan.
Jonathan O’Hara, International Commerce Lawyer at McMillan LLP Ottawa’s lawyers, said Canada should establish a better treatment than the negotiated EU or Japan since it is already very well integrated with the US economy.
“On a wide level, having some kind of tariffs throughout the board, I think, would be very difficult to accept for Canada,” O’Hara said in a weekend interview with CBC News.
The president of the United States, Donald Trump, and the president of the European Commission, Ursula von der Leyen, announced the framework of a new commercial agreement that includes a 15 percent rate for most EU imports.
However, it seems that Canada does not really face the possibility of tariffs that are really on the board. That is because it has something that neither the European Union nor Japan has: a real free trade agreement.
Trump’s “emergency emergency rates”, currently established by 25 percent, which threatens to increase 35 percent on Friday, only reach those goods that do not comply with the rules of origin in the Canada-Mexico Agreement (Cusma).
That means that the great most of Canada’s exports to the US are currently crossing the border rate.
Steel and aluminum rates a great question
That may be the reason why the Liberal Government of Carney does not feel the same type of pressure as Europe and Japan to obtain an agreement in Trump’s timeline, said Drew Fagan, professor at the School of Global Affairs and Public Policies of Mock from the University of Toronto.
“In general, the average tariff of Canadian goods that go to the United States is as low as anywhere in the world,” he told CBC News.
“The important thing for us is that [CUSMA] The free trade agreement continues to have. If you will do it in the future, of course, it is a fundamental question. “
The biggest exceptions to the mostly free access of Canada rates to the United States are steel and aluminum, affected by the global Trump rate while trying to underpin that sector at home.
In their agreements reached with the USA, neither the EU nor Japan drops that rate. While Canada is surely distressed by something better in steel and aluminum, such as the 25 percent rate of the United Kingdom, potentially aimed at zero, European and Japanese agreements suggest that it will be difficult to achieve.
Carlo Dade, director of International Policy of the School of Public Policy at the University of Calgary, said that Canada will probably face a tariff rate comparable to that of Europe.
“Americans have decided to readjust the terms of trade,” Dade said. “The price of access to the US market is increasing worldwide. It seems that everyone will have to pay greater cost.”
There are many signs that suggest that the perspectives are scarce for Canada to reach an agreement with the Trump deadline on Friday: Carney said that the conversations are complex, its main commercial negotiators are minimizing the importance of the deadline and that Trump says that there is no agreement at all.
