Interview: NAFTA must be Trudeau's focus at Davos -- scholar

by Christopher Guly

OTTAWA, Jan. 23 (Xinhua) -- While Canadian Prime Minister Justin Trudeau is spending the next few days at the World Economic Forum in Davos, Switzerland, he had best keep his eye back home as Canadian negotiators meet their American and Mexican counterparts to seek some commonality on the imperiled trilateral trade pact between them, warns a Canadian expert.

The North American Free Trade Agreement (NAFTA), which U.S. President Donald Trump has threatened to abrogate, must be Trudeau's focus at Davos, said Ian Lee, an associate professor in the Sprott School of Business at Carleton University in Ottawa, in an interview on Tuesday.

"Some very powerful, very influential and very important investors are at the forum and know that Trump is hostile to trade agreements, particularly NAFTA," said Lee, who teaches international business courses as a visiting professor around the world.

"Trudeau has to counter that narrative and promote investing in Canada, which is declining, yet is one of the best predictors of a country's competitive and economic growth."

Business investment in Canada represents about 11 percent of Canada's gross domestic product (GDP), ranking the country 16th out of 17 developed countries of the Organization for Economic Cooperation and Development, according to an October 2017 Fraser Institute study by Philip Cross, former chief economic analyst at Statistics Canada.

Lee said that although Canada is diversifying trade through agreements with the European Union (EU) and, as of Tuesday, with the 11-nation Trans-Pacific Partnership, its strongest relationship is with the United States.

Businesses could avoid investing in Canada if it does not have a formal trade pact with its southern neighbor, which represents two thirds of Canada's global trade and has a GDP 10 times the size of Canada's.

"The prime minister of Canada has two major responsibilities as part of his job description: one is to keep (the French-speaking province of) Quebec in the country. The other is to maintain the relationship with the United States and not allow it to deteriorate -- because if you do, you'll pay with your job," Lee told Xinhua.

He believes Trudeau's aides should arrange a meeting in Davos between him and Trump, who is expected to arrive in the Swiss city later this week, to send the message to investors -- and Canadians back home -- that the prime minister is "working to make sure that he mitigates any damage if NAFTA is repudiated."

However should the Trump administration withdraw from NAFTA, Trudeau will have to "be seen leading the file" on any negotiations for a new agreement, according to Lee.

"If Canada doesn't have a trade agreement with the United States, Trudeau will be attacked mercilessly by the Conservative opposition before the next Canadian election in 2019," said Lee. Enditem