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

Welding galvanized steel

by Shaun Relyea

What is it and why use it?

A medical fix

Growing medical device market may be good for the health of your manufacturing business

by Tim Wilson

To get a handle on Canada's medical industry, it is important to know that Canada has four classes of medical devices.

Tech Tips: Smarter drilling

by Sam Matsumoto

Selecting the right drill for stainless steel and titanium

Gas Management For Industry 4.0

by Professor Emil Schubert

RCAF gets new helicopters

Their arrival may have been a long time coming, but new Cyclone helicopters have finally been rolled out by the Royal Canadian Air Force. The RCAF showed off the first of its new aircraft in the skies over Halifax on July 13.

Made to Measure

Metrology tools for your manufacturing operation

FIELD NOTES: GAA-500-90 automatic up-cut circular saw

supplier: Scotchman Industries

end user: Motis Inc.

Most amazing shipping container homes

Looking for an inexpensive home? Have you considered a shipping container? Check out these shipping container homes.

Expansion strategies

Market diversification as a competitive tool for manufacturing growth

by Tim Wilson 

Canada is an energy giant.

Building space stations

Want to build a space station? Here's what you need to know.

Time lapse suspension bridge construction

Time lapse sequences make the construction of this massive suspension bridge – the Osman Gazi bridge over the Gulf of Izmit in Turkey, opened in 2016 – look a lot easier than it actually was.  

World's steepest funicular rail line in Switzerland

The world's steepest funicular railway has opened to the public in Switzerland. Specially constructed cylindrical carriages have been used to ensure that passengers can stay upright. The floors tilt, adjusting to the slope as the funicular climbs 110 m (360 ft) over a distance of 100 m at the steepest point.

Pull studs: under pressure

by Alan Miller

Why pull studs are under more pressure than ever before

The construction robots are coming

A look at how robotic systems are playing an increasingly important role in the construction industry.

10 Ways To Reduce Weld Fumes

by Nestor Gula

A systematic approach to reducing weld fumes 

Stay In Touch

twitter facebook linkedIn