Economic Discussions Conclude at Davos: What is the Prognosis for NAFTA and the TPP?
January 26, 2018
The World Economic Forum took place this week in Davos, Switzerland. Global business and political elite gathered to set the agenda for international commerce. The theme of this year’s forum was “Creating a Shared Future in a Fractured World”
In a speech to Davos delegates, Prime Minister Trudeau noted that Canada is working hard to “make sure ‘our neighbour to the south’ realizes that protecting NAFTA is in everyone’s best interests”. In a subsequent private round table, Trudeau told global business leaders that he continues to be confident that NAFTA can continue.
Trudeau spent time lobbying American CEO’s to convince them to sell the benefits of NAFTA to American workers, and to urge them to continue investing in Canada.
Earlier this week, U.S. Commerce Secretary Wilbur Ross criticized Trudeau for using Davos to “put pressure” on the U.S. for NAFTA negotiations, but Trudeau denied this, pointing out that his position on NAFTA has been consistent: “it is a good deal for Canada, for the United States…[i]t has created millions of jobs on both sides of the border and in Mexico over years and it has created economic growth that has been remarkable.”
The beginning of the Davos Forum coincided with a progression in talks on the Trans-Pacific Partnership (TPP), which was almost scrapped last year when President Trump withdrew. However, at negotiations in Tokyo earlier this week the 11 prospective members nations agreed to new language and hope to finalize the partnership by March.
Trudeau met with leaders of Italy, Israel, Germany, India, and Argentina.
Trudeau and Trump did not meet in person, with Trudeau leaving Switzerland before Trump arrived. Trudeau defended his decision by explaining that he did not seek a one-on-one meeting in order to allow other world leaders to press their issues.
The U.S. Agenda
President Trump is the first U.S. President to attend Davos since President Clinton attended in 2000.
In a speech given today, Trump reiterated his “America First” stance, and noted that such a policy would benefit other countries as well, noting:
America first does not mean America alone. When the United States grows, so does the world. We cannot have free and open trade if some countries exploit the system at the expense of others. We support free trade, but it need to be fair, and it needs to be reciprocal.
Trump tempered his comments on favouring free trade by noting that he is all for it as long as “abusive trade practices” by other countries are limited. He did not mention NAFTA at all, but did address the TPP saying that the U.S. was committed to bilateral trade deal, and that a trade deal with TPP nations as a group might be possible “if it is in the interests of all”.
Trump invited assembled business leaders to invest in the U.S., saying “now is the perfect time to bring your business, your jobs and your investments to the United States.”
Trump met with Israeli Prime Minister Benjamin Netanyahu and British Prime Minister Theresa May.
Now that Davos has concluded, we will continue to follow developments on both NAFTA and the TPP, and provide updates as they become available. If you have started to anticipate what impact any changes may have on your business in the U.S. or in Canada, contact the knowledgeable team at Feigenbaum Tax Law. To make an appointment, contact us online, or call our office toll free at (877) 275-4792.