Here’s what Canada’s consul general said to Northeastern students about the new NAFTA deal - News @ Northeastern
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Here’s what Canada’s consul general said to Northeastern students about the new NAFTA deal

David Alward, Canada’s consul general to New England, said on Thursday that the new trade agreement between the United States, Canada, and Mexico is “all about finding common ground.”

The new deal represents a revision of the North American Free Trade Agreement, which was renamed the United States-Mexico-Canada Agreement. President Trump has called NAFTA the worst deal ever, but Canadians disagree, according to Alward.

“On average they think it’s benefited the nation,” Alward told a group of international business students at Northeastern. “So from Canada’s perspective, the fact that we’re at least preserving these supply chains, that’s good for all countries because there will continue to be trade and community between us.”  

Although trade between these countries will continue under the new deal, the terms of some of their agreements could change as soon as the second half of 2019.

Alward said the auto and dairy industries will be most affected. Here are some of the biggest changes:

Auto industry

Seventy-five percent of a car’s components must be created in the United States, Mexico, or Canada to qualify for zero tariffs, up from 62.5 percent under the old trade agreement deal.

Thirty percent of the work done to manufacture cars must be completed by workers who receive more than $16 an hour. That number increases to 40 percent by 2023. For reference, $16 an hour is about three times what a typical auto worker in Mexico makes.

These changes are expected to increase the cost of cars in Canada and the United States. “The auto sector is a global supply chain, so with the percentage numbers changing, it could impact the cost of vehicles,” Alward said.

Dairy industry

Canada will open its highly-regulated dairy market to U.S. dairy farmers. Moving forward, U.S. farmers will be able to export products such as infant formula and milk powder to Canada.

This was a point of contention between the two countries, but Alward said the U.S. and Canada seemed to reach a common ground on the issue. “What we’ve been able to do is find something that will be better for both of us going forward,” he said.

Alward connected the new deal to a wave of nationalism that he said is sweeping across the globe. “We can blame someone across the border who has stolen our jobs, but quite frankly, governments need to find better ways for people to adapt and move on to new industries,” he said.

Will the United States-Mexico-Canada Agreement reinforce these feelings of nationalism or assuage them? No one knows, of course. But Alward said that “making good public policy and investing in people and stable economic environments” are good places to start.

“We are not an island,” he said, “That’s not the reality of the world today. The world wants what we have, and that’s not a negative thing.”

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