Article

Trump’s threat to "blow up" NAFTA has industry stakeholders wary

0 270 Government

by Warren Frey

The North American Free Trade Agreement (NAFTA) may be no more.
Several construction industry stakeholders are waiting to see what will happen with NAFTA renegotiations between the U.S., Mexico and Canada. They are worried pre-NAFTA labour mobility agreements might be invalidated by the renegotiation and are also concerned about the impact on inter-provincial tariffs, specifically for rebar and drywall.
Several construction industry stakeholders are waiting to see what will happen with NAFTA renegotiations between the U.S., Mexico and Canada. They are worried pre-NAFTA labour mobility agreements might be invalidated by the renegotiation and are also concerned about the impact on inter-provincial tariffs, specifically for rebar and drywall. - Photo: FILE PHOTO

U.S. President Donald Trump has recently indicated he may "blow up" NAFTA, though Canadian and Mexican leaders are playing down his threat.

At the industry level, construction leaders see room for improvement and cause for concern.

"The issue goes to whether Canada has benefited from NAFTA and the reviews are compelling; Canada has long benefited from secure access to our largest market," said Independent Contractors and Businesses Association president Chris Gardner.

"Renegotiating the agreement is of tremendous importance to Canada and to our economy. If we went back to the old regime, the U.S. picking and choosing would have a significant negative impact on the economy. Protectionism is not the way to go."

The fate of public works procurement is a concern, Canadian Construction Association president Michael Atkinson said.

"The construction industry would like to see public works procurement at the sub-national level, for both states and provinces," he said.

The recent Canadian-European Union Comprehensive Economic and Trade Agreement (CETA) already has such provisions, Atkinson said, and had it gone through, the Trans-Pacific Partnership (TPP) would have held similar provisions.

"It's a trend you're seeing in international agreements, and with good reason, since infrastructure spending is often delegated down to the provincial and municipal level," he added.

Not only contractors but construction suppliers could be at risk, Atkinson warned, citing the policies of the previous American administration.

"'Buy American' during the Obama administration cut out Canadian steel (from the market)," he warned.

BC Building Trades executive director Tom Sigurdson also expressed concern that pre-NAFTA labour mobility agreements might be invalidated by renegotiation.

"Skilled labour mobility is an important requirement and we want to be certain we have access when required to skilled labour where we need it," he said.

Sigurdson pointed to the modernization of the Kitimat aluminum smelter, B.C.'s largest project to date, as an example of needed foreign workers. Only one per cent of the workers on the project were from the U.S., he said, but without them the project might have experienced significant delay.

"If we don't have access to skilled workers from the U.S. and they don't have access to skilled Canadian workers, it can bottleneck a project on either side of the border," he said.

Atkinson also expressed concern on the future of labour mobility under a renegotiated NAFTA agreement.

"Why couldn't an agreement like NAFTA apply to the skilled trades?" Atkinson asked. "The construction industry was hit much harder in 2008, and people in the U.S. left the industry. (Worker mobility) would also help work out the undocumented worker problem in the United States."

Gardner pointed to inter-provincial tariffs as another problem, specifically for rebar and drywall.

"The government thinks U.S. produced drywall and rebar are unfairly priced and affect eastern Canadian producers, but that affects the cost of construction here," he said.

"Consumers pay more when the cost of drywall goes up and big projects will cost more when the cost of rebar rises."

Governments have also not made their citizenry aware of the benefits of free trade, Gardner said.

"Free trade is fundamental to the economy and we have agreements with the U.S. that provide certainty and market access. But governments haven't educated their citizens on the benefits of free trade, and where there are adverse effects, the government is poor at providing transition training and tools," he said.

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