Windsor manufacturing sector closely eyeing NAFTA talks
Windsor business owners and trade experts will have a close eye on negotiations as Canada, Mexico and the United States open up the North American Free Trade Agreement this week to try to come up with a more modern deal.
Any changes to regulations surrounding market access and rules of origin could have a resounding impact on companies in the Windsor region, say trade experts.
Rules of origin is a particular concern for the manufacturing sector as the regulations determine what percentage of a product is considered North American and therefore traded without tariffs, explained Laurie Tannous, the special adviser with the Cross Border Institute at the University of Windsor.
"If the rules of origin are going to be tightened, then we're going to see a lot more paperwork, a lot more red tape for companies here in Windsor that are sourcing goods from outside the area," she said.
The Trump factor
Negotiators from all three countries expect some level of tension throughout the talks, which could take months to complete, but there are some worries that U.S. President Donald Trump could make the process difficult at times.
"You never know from day to day who his target is going to be and all it takes is one bad comment, one bad word and he flips his wig and goes in a different direction," said Chris Taylor, national staff representative for Unifor.
The Trump administration's Buy American policies could also be a point of contention during negotiations. Jonathon Azzopardi, chairperson of the Canadian Association of Mold Makers, says the policy creates an unnecessary stumbling block for Canadian companies.
"Global competition has already made it very difficult for us to compete," said Azzopardi, who is also president and CEO of Laval International in Windsor. "To think we have to actually be American in order to get American business, that could be a whole set of obstacles that Canadian companies are not prepared to do."
Looking for a modern agreement
Ahead of renegotiating, which starts Wednesday, Foreign Affairs Minister Chyrstia Freeland said Canada will try to modernize North America's 23-year-old trade deal to update its labour standards, ease cross-border movements of professionals, cut red tape and open up government procurement.
Officials in the Windsor region want the Canadian government to ensure trade routes continue to flow, particularly considering the latest resurgence of the manufacturing industry.
Canada has some advantages, including the extent of which the country's trade is intertwined with the U.S., which could make it difficult for dramatic changes, added Tannous.
"Our supply chains are very integrated, so if there is going to be a change that's going to impact a U.S. company, especially for a U.S. company that is really intertwined and integrated here they're going to think twice."