PEI

NAFTA termination impact 'fairly modest' for P.E.I., says trade expert

There would be no impact on some of P.E.I.'s largest export products to the United States if U.S. President Donald Trump makes good on a threat to tear up NAFTA, says a P.E.I. trade expert.

WTO rules would still protect exports

Without NAFTA, there would still be no tariff on mussels. (CBC)

There would be no impact on some of P.E.I.'s largest export products to the United States if U.S. President Donald Trump makes good on a threat to tear up NAFTA, says a P.E.I. trade expert.

Scott Sinclair, director the Trade and Investment Research Project for the Canadian Centre for Policy Alternatives, says his group has looked at how a sudden ending of NAFTA would change the trade relationship between the U.S. and various provinces.

"It would be disruptive," said Sinclair.

"The tariff impacts of NAFTA termination if Trump were to make good on his threat are actually fairly modest [for P.E.I.] Obviously some exporters and industries will be hit harder than others."

Blueberries could face tariffs if NAFTA is terminated. (CBC)

The end of NAFTA would not mean the end of trade rules. Both Canada and the U.S. are still members of the World Trade Organization. Under those rules, key P.E.I. exports such as fresh and frozen lobster, mussels, oysters and aircraft parts would remain tariff-free.

Other important export products could face new tariffs, such as french fries, blueberries and prepared lobster.

Standing up to bullying

Nationally, said Sinclair, WTO rules leave Canada in a relatively strong negotiating position.

"We can afford to walk away from a bad deal and certainly stand up to any bullying that occurs," he said.

The pace of negotiations is brutal, says Sinclair. (CBC)

There are currently seven rounds of NAFTA negotiations scheduled for this year, with the aim of completing negotiations before American mid-term elections next year.

"The pace is quite brutal, given how large the subject matter is," he said.

"I think the pace makes it almost impossible for people on the outside to keep up, and for there to be meaningful participation."

Sinclair said negotiations as complicated as these typically take five to eight years.