Mary Scianna, editorClick image to enlargeby Mary Scianna

 

 As uncertainty continues to loom amidst ongoing NAFTA negotiations between Canada and the US, many have begun to imagine what the manufacturing environment in North America could look like with a different kind of trade relationship.

By most accounts, the likelihood of dismantling NAFTA completely remains slim and what we may see instead is a revamped agreement. If, however, the US decided to kill NAFTA, what would happen to Canada’s economy? Despite the Canadian government’s initiatives to build free trade agreements with other countries, the US remains Canada’s biggest trading partner with exports to the US reaching a value of close to $400 billion in 2016.

Canada sans NAFTA–or a revamped agreement–wouldn’t devastate the economy, although it would reduce growth for many of Canada’s key manufacturing sectors, such as automotive and aerospace, according to economists interviewed by the Toronto Star’s Washington bureau chief Daniel Dale quoted in a November 17, 2017 article.

For instance, in the “return-of-tariffs scenario” Scotiabank’s deputy chief economist Brett House notes in the Toronto Star story that the bank would expect growth to fall 1.2 per cent in 2019 rather than 1.5 per cent expected under NAFTA, and 1.3 per cent in 2020 rather than the 1.5 per cent expected under NAFTA.

“It’s not like they come in and just shut down the auto industry in Ontario and move it wholesale,” states Philip Cross, a senior fellow at the Macdonald-Laurier Institute and former chief economic analyst for Statistics Canada in the Toronto Star article. “These plants are worth something, these workers are trained. So they just gradually run it down. They don’t invest anymore. And then you wake up after 10 years and go, ‘Gee, we used to have a good auto industry in Ontario, what happened?’”

One US demand that could be a glimmer of a future scenario is the US demand to introduce a sunset clause that could terminate NAFTA every five years. While this could create long-term uncertainty for manufacturers, a January 2018 report by RBC “What Canada Needs to Consider to Save NAFTA” notes that there could be an opportunity for “creative, politically face-saving alternatives. One would be to include a clause that ensures periodic, targeted reviews every five years, or periodic improvements to the agreement (provided all sides agree) as the economy evolves, but with a ratchet that ensures existing NAFTA market access gains are not rolled back.”

Canada and the US have a long trading history beyond NAFTA. Thousands of businesses in both countries have built their companies through trade and people on both sides of the border recognize the benefits. Trade agreements may change but they won’t disappear. SMT

Boost profits & productivity with R&D

by Andrew Milivojevich 

Improvements in production equipment can fall under SR&ED claims

Cut, Fabricate, Weld

CanWeld 2016 is a premier conference and exhibition for Canada’s fabricating and welding industries

A Few Words to Describe 2020

è

During the past eight months I have heard this year described in a vast number of ways. I won’t list them, but a lot of them were fearful, most of them were cautious, many of them colourful and almost all of them decidedly negative. 

Federal Budget 2017

Anyone looking for specific support for manufacturing in the 2017 Federal Government’s Budget will be disappointed.

Robotic/AI lab opens in China’s manufacturing hub

Chinese social media giant Tencent has announced plans to open a manufacturing-oriented robotics/AI development lab in Shenzhen.

Cut down your machine buying cycle

by Bryan Jacobs

Be ready to produce production parts prior to machine delivery

Advanced and smart

by Mary Scianna

Soft robot inspired by snakeskin

A team of researchers from the Harvard John A. Paulson School of Engineering and Applied Sciences has developed a soft robot inspired by snakeskin, and made using kirigami, an ancient Japanese paper craft.

Labour saving breakthroughs

A roundup of new labour saving technologies including a printer that prints roads.

Industry 4.0 for Fabricators

by Robin Stuhler

Countering increasing market pressure with interconnected solutions

Multi-axis turning-milling machine in action

The Chevalier FNL 220LSY multi-axis turning-milling machine in action. The machine, available in Canada from Heinman Machinery, can turn and mill complex parts in a single machine.

Seven real-life transforming vehicles

Here's a look at seven "transformers" that actually exist.

Assessing the Best Round Tool Concepts

by Andrei Petrilin 

Tips for selecting the right attributes in cutting tools

Manufacturing: Enough is Enough

The world is tired of the endless negative news about manufacturing and despite the ongoing economic upheaval in Europe, the global economy is saying "enough is enough and it’s time to move on.”

Stay In Touch

twitter facebook linkedIn