Many smaller companies currently selling (or thinking of selling) cross-border ask, “What should I think about the NAFTA negotiations?”. My short answer is, “business as usual”.
Obviously, there is no definite answer, but using common sense and parsing the rhetoric leads me to these conclusions: (1) Serious negotiations are continuing in good faith; (2) All three countries want a deal, sooner rather than later; and (3) Canada may be in a stronger position than Mexico because, if NAFTA was actually cancelled, the USA and Canada would automatically revert back to the original 1988 bi-lateral Canada-United States Free Trade Agreement (with, of course, continuing negotiations).
Bottom line: Current economic and foreign exchange conditions are much too favorable for a company to sit on the fence waiting for governments to provide them with a safe solution
According to a recent article in Business in Vancouver, a minority government in BC could be the “Worst fear for BC Business”. Besides creating more uncertainty, they indicate that the “Future of some major resource and infrastructure projects would be in doubt under a government dependent on co-operation of opposition parties.”
If they hadn’t already made plans based on the continuing weak loonie and increasingly strong U.S. economy, savvy BC business entrepreneurs will view this additional news as a strong signal to seek business and marketing opportunities in the USA. And, for those worried that the new president will close the border, our advice is GET OVER IT! While some trading relationships will obviously be reviewed, U.S. businesses and consumers will continue to consume foreign goods and services in even greater volume. Start planning right now to earn your fair share of the predicted extra-heavy fall and holiday buying season.
TradeTips blog is published by UCanTrade, Inc., your cross-border experts since 1984.
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