The new USMCA deal was announced Sunday night and not surprisingly, leaders of both the US and Canada declared it was a win for each of them with Donald Trump declaring it was “a great deal for all three countries”. We are hearing of the gains and losses for the Auto and Dairy Industries, but what we are not hearing is how the deal failed to resolve U.S. tariffs on Canada’s steel and aluminum exports. The steel and aluminum tariffs that Trump imposed on both countries earlier this year remain in effect and will be dealt with separately, according to the officials. They did not offer a timeline for when those tariffs could be removed and this is a concern for the Oil and Gas Industry. Tariffs are a sticking point for all Canadian industries according to David McLellan of Ridgeway Strategic Consulting Ltd. who states “Canada has seen its institutional advantages erode due to a loss of tax competitiveness, increased regulatory burdens and the influence of a vocal minority creating the perception that public sentiment is decidedly anti-development. The damage will manifest itself in a falling standard of living. Can we reverse this in time to restore Alberta to prosperity?”
Another issue with the USMCA is the clause that stipulates “entry by any party into a free trade agreement with a non-market country shall allow the other parties to terminate this agreement”. What is the prospect now for a Canada free trade deal with China or a deal with any other country for that matter? How can we accept that the US can limit Canadian trade agreements?
There is also the creation of a macroeconomic committee with representatives from all three countries to consider exchange rate policy. What does that mean for the Bank of Canada’s independence?
For further discussions of the USMCA and US Tax implications for the Oil and Gas Industry, join us for a presentation entitled:
“Leveling the Playing Field – A Discussion of USMCA/NAFTA Resolutions and the Impact of US Tax and Regulatory Reform on Canadian Competitiveness”
with David McLellan, Principal at Ridgeway Strategic Consulting Ltd. -addressing the key Canada/US trade, US tax & regulatory developments and Romeo Rojas, Associate at Bennett Jones who will speak on USMCA Dispute Resolution and Chapters 11 and 19. Thursday October 18, 2018 at the Calgary Petroleum Club – 11 15:am to 1.00 pm. Tickets $50.00 members, $60.00 non-members.
Sponsored by Bennett Jones and BOEReport.com