OTTAWA — The Canadian government and the export industry are watching nervously as a trade war brews between this country’s NAFTA partners.
Mexico slapped hefty tariffs on 90 American products this month, after Washington axed a program that allowed Mexican trucks to bring goods deep into the states — a right outlined the North American Free Trade Agreement.
The change was made as part of the Obama administration’s stimulus package, the same package that included “Buy American” provisions that have been decried by its northern neighbours.
“I don’t want to intervene in their dispute but I’m concerned when I see disputes like that,” Trade Minister Stockwell Day said in an interview.
“What happens in an economic downturn, various businesses and industries get nervous and succumb to the impulse to build protectionist walls.”
While Canadian truckers aren’t treated the same way, U.S. Homeland Security Secretary Janet Napolitano said this week that Canada shouldn’t get different treatment when it comes to border issues.
“One of the things we need to be sensitive to is the very real feelings among southern border states and in Mexico that if things are being done on the Mexican border, they should also be done on the Canadian border,” Napolitano said.
The signals are raising concerns.
“I know my colleague, Public Safety Minister Peter Van Loan, will be having a lot to say to and with (Napolitano),” Day said.
“We have always made the message clear that we take our security obligations seriously but the borders have to be efficient and security can’t trump prosperity. And I think once the minister gets here, she’ll start to see some of that.”
Van Loan, however, said Napolitano’s comments had been overblown by the media.
Jayson Myers, president of industry association Canadian Exporters and Manufacturers, said his members are following what’s happening.
They’re worried about tighter regulations, and they’re also taking notes on what the Mexicans have done to retaliate.
Canadian businesses are still at risk of being locked out by state and municipal procurement contracts because of protectionist provisions in stimulus packages.
The Mexican government carefully selected the products it raised tariffs on to create the maximum political impact.
Members of Congress who supported the ban on Mexican trucks find that exporters in their states being directly targeted.