Yuri Bilinsky, New Pathway – Ukrainian News.
On Sunday, the U.S. and Canada reached a deal to update the North American Free Trade Agreement and sign the United States Mexico Canada Agreement.
Bohdan Leshchyshen, a former member of the Board of Directors of Canada-Ukraine Chamber of Commerce, who holds a Chartered Financial Analyst designation and has extensive experience in investment research and the financial services sector, had this to say about the new deal:
“First of all it is good that the Canadian government finally entered into transaction and concluded negotiations with the American government. Had we not had the agreement there was a big possibility that the US would put tariffs on our automobile industry which is about a trillion dollar industry that would cause huge economic problems. The U.S. also would put additional tariffs on our aluminum industry. It looks like they reached an agreement not to have tariffs on automobiles and to review tariffs on aluminum. They also left the dispute mechanism in place which is the only thing to protect us from the States in case something happens.
“So, they won on some things but what they lost is they are allowing the U.S. dairy industry to enter into Canada. This what the European industry is now allowed to do but from what I understand they are not doing it that much. The American industry will be doing that because their selling prices are lower than in Canada. I believe personally that the Supply Management system we have Canada is not conducive to running businesses properly. We have marketing boards for beef, pork, milk, poultry and eggs. These all restrict the ability of business people to make good business decisions because there are quota systems, they restrict how much you can sell and the selling prices. The agreement with the U.S. will create problems for some of these farmers initially but it will bring proper pricing and proper supply management of these commodities which most consumers are overpaying for. From the economic point of view, this will not have as big an effect as it would if tariffs had been slapped on the automobile industry.
“I guess the government had to make a decision where it is going to compromise and from the political point of view it was the right decision. It is interesting that the concessions on the supply management were opposed from both sides of Parliament. Part of the reason this is happening is that the dairy industry is very powerful in Quebec and both parties want to win seats in Quebec away from the NDP. Initially, there will be opposition from the farmer community but overall it’s a positive thing – the stock market is up already. It’s the best they could do under trying situation.”