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steveintoronto said:
Excellent heads-up on the details that were missing from the national press.

This concerns me:
[The company plans to turn its Kingston facility into a hub for light rail car production for Canada and the United States, Lefebvre said.]

Hold your breath on that one, as:
http://www.theglobeandmail.com/news...ision-in-infrastructure-bill/article33280391/
Click to expand...

If anything, I suspect what will end up happening is Mexico gets booted out, and a modified NAFTA is kept in place only for the US and Canada. With Mexico you have drastically different labour rates, but with labour rates in Canada and the US being more or less the same, there isn't a significant labour advantage to locating in one vs the other (yes, there's tax breaks and stuff that can be offered, but that's independent of the general labour market).
 
gweed123 said:
If anything, I suspect what will end up happening is Mexico gets booted out, and a modified NAFTA is kept in place only for the US and Canada. With Mexico you have drastically different labour rates, but with labour rates in Canada and the US being more or less the same, there isn't a significant labour advantage to locating in one vs the other (yes, there's tax breaks and stuff that can be offered, but that's independent of the general labour market).
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and this is where Trump and other anti-traders show how they do not understand how trade agreements are supposed to work. If Mexico has a labour advantage because of cheap and plentiful workers then a trade agreement allows some lower margin production to shift to Mexico (stuff that might have shifted to non trade pact countries anyway) but this, if the agreement is crafted well, should be a short/mid term benefit as the jobs created start to push up wages in the benefiting country and their middle class rises in status and buying power and you create a bigger market to sell refined/finished/higher margin products to.
 
gweed123 said:
If anything, I suspect what will end up happening is Mexico gets booted out, and a modified NAFTA is kept in place only for the US and Canada. With Mexico you have drastically different labour rates, but with labour rates in Canada and the US being more or less the same, there isn't a significant labour advantage to locating in one vs the other (yes, there's tax breaks and stuff that can be offered, but that's independent of the general labour market).
Click to expand...
Mexico can't be "booted out" of Nafta. She's a founding signatory to the agreement. The US can withdraw, which is exactly what Trump has threatened, albeit trade is the Senate's domain. The Pres can be alloted a mandate to negotiate (ie: Fast Track authority), but here's the latest on this:
Trump To Enforce 'Buy American' Rules For Infrastructure Projects
CP | By Alexander Panetta, The Canadian Press
Posted: 12/09/2016 11:24 am EST Updated: 30 minutes ago

WASHINGTON — Donald Trump has made clear he wants buy-American rules in the massive infrastructure program he's planning, launching an ardent defence of domestic-purchase requirements that can cause tensions with other countries.

Critics of such buy-American provisions say it not only freezes out foreign competition, but hurts Americans too, by driving up the cost of construction, which means taxpayers get fewer roads and bridges for their buck and fewer construction jobs in the long run.

But the measures have considerable political support and the president-elect strongly suggested, in a speech Thursday night, that he sees them as part of a historic, $1 trillion infrastructure bill he's urging lawmakers to pass.

"My administration will follow two simple rules — buy American and hire American,'' Trump told a cheering crowd in Iowa, at his latest post-election, campaign-style rally.

"On infrastructure, I am going to ask Congress to pass legislation that produces $1 trillion of new investment in America's crumbling infrastructure and it is indeed crumbling. That includes major new projects for both our rural communities and our inner cities, which have also been forgotten.

"And we will put our people — not people from other lands — our people back to work in the process. It is time to help Americans get off the welfare and get back into the labour market and they're going to want to do it. ... Rebuilding this country with American hands, by American workers. We're going to do it.''

His words echo those of some lawmakers from both parties, which suggests the issue could surface in the new year when Congress turns its attention to Trump's legislative agenda.

It would repeat an old story.

Trade veterans hoping existing agreements will be honoured

In the midst of the 2009 recession, Congress included buy-American rules in a stimulus bill signed by President Barack Obama — which caused early tension with the Canadian government, as the latter argued the rules made little sense in an integrated continental economy where companies operate on both sides of the border.

After much lobbying, the Canadian government got a special carve-out for Canada — but it didn't apply to every infrastructure program, didn't apply in every state, was only temporary and has now expired.

Some U.S. trade veterans have been expecting this issue to resurface.

"My best guess would be that if there is a stimulus bill, there would be a buy-American provision,'' said Jean Heilman Grier, who used to work for the U.S. government as the senior procurement negotiator for trade deals.

She said she hopes the bill at least will include a stipulation that existing trade agreements be respected — a clarification senators added to the 2009 stimulus bill.

She said Canada might also try including procurement in the upcoming discussion about NAFTA, which Trump says he wants to renegotiate. Canada's new deal with the European Union includes liberalized infrastructure procurement.

But she said there's a problem doing that with the U.S. It's an issue of American federalism. Heilman Grier said that, in the U.S., even if the states sign on to liberalized federal procurement standards, they don't control local projects.

"They can't dictate how cities do their procurement,'' she said in an interview.

"You can't have Illinois say, 'Okay, we'll include Chicago.'''
[...]
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http://www.huffingtonpost.ca/2016/12/09/trump-buy-american_n_13532132.html

You can bet your little bogies Bombardier have put far more on the line here than what first appears to be the case. (And that might be an interesting angle in itself when it comes to cornering the LRT market in Canada. No other manufacturer, in this present US political climate, is going to commit to this degree in Canada when the "North American Market" appears to be in jeopardy)
 
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gweed123 said:
If anything, I suspect what will end up happening is Mexico gets booted out, and a modified NAFTA is kept in place only for the US and Canada. With Mexico you have drastically different labour rates, but with labour rates in Canada and the US being more or less the same, there isn't a significant labour advantage to locating in one vs the other (yes, there's tax breaks and stuff that can be offered, but that's independent of the general labour market).
Click to expand...

I'm in the US at the moment. I really wouldn't discount some of the possible knock-on effects against Canada. There are companies that have moved jobs to Canada. And the mood at the moment is very much domestically focused.

Moreover, I have my doubts about Trudeau being able to maneuver Trump into a friendly zone of cooperation. I am not optimistic that any renegotiation of NAFTA will end well for us.

TOareaFan said:
and this is where Trump and other anti-traders show how they do not understand how trade agreements are supposed to work. If Mexico has a labour advantage because of cheap and plentiful workers then a trade agreement allows some lower margin production to shift to Mexico (stuff that might have shifted to non trade pact countries anyway) but this, if the agreement is crafted well, should be a short/mid term benefit as the jobs created start to push up wages in the benefiting country and their middle class rises in status and buying power and you create a bigger market to sell refined/finished/higher margin products to.
Click to expand...

The wage disparity between the right-to-work states and industrialized Mexico is not huge actually. However, there are difference in environmental laws and far more importantly trade laws. Mexico has freer trade with most of the developed world and a lot of the developing world, than the US. This means you can export to many places from Mexico. That makes production more advantageous, even if the wage gap were to reverse.

WRT Canada, Trudeau needs to accelerate that infrastructure bank. We risk suffering higher costs and losing economically if Trump really brings back "Buy America." He's also talking about "Hire American." That would undoubtedly cost our big firms like SNC-Lavalin money.
 
kEiThZ said:
I'm in the US at the moment. I really wouldn't discount some of the possible knock-on effects against Canada. There are companies that have moved jobs to Canada. And the mood at the moment is very much domestically focused.

Moreover, I have my doubts about Trudeau being able to maneuver Trump into a friendly zone of cooperation. I am not optimistic that any renegotiation of NAFTA will end well for us.



The wage disparity between the right-to-work states and industrialized Mexico is not huge actually. However, there are difference in environmental laws and far more importantly trade laws. Mexico has freer trade with most of the developed world and a lot of the developing world, than the US. This means you can export to many places from Mexico. That makes production more advantageous, even if the wage gap were to reverse.

WRT Canada, Trudeau needs to accelerate that infrastructure bank. We risk suffering higher costs and losing economically if Trump really brings back "Buy America." He's also talking about "Hire American." That would undoubtedly cost our big firms like SNC-Lavalin money.
Click to expand...
Agreed on every point. And the US press is also. I'll find reference and post. *Most* educated Americans, including Republicans, are for freer trade, but that is in defiance of the majority popular will at this point in time. And that's Trump's audience.

Canadians had better get over the "Oh it's not aimed at us" mentality. It is, just not as much as at the Mexicans. The resentment at Canada is not as great, but there's still resentment. The mood is "they're our jobs, and it's our money, and we want them here".

Canada had better brace itself, because the export destination for goods like Bombardier produce is going to swing towards Europe, except Europe is far more efficient at producing it themselves. CETA opens all sorts of opportunities, but most of them will only manifest as raw material exports, not finished goods. Canada has one of the lowest productivity rates of developed nations for finished goods.

Like it or not, Bombardier needs to see output from that factory realized. And that market is us. Just pray that Bombardier get their act together for delivery times and quality control.

kEiThZ said:
Moreover, I have my doubts about Trudeau being able to maneuver Trump into a friendly zone of cooperation.
Click to expand...
I get the distinct impression that was Biden's focus off camera, words to the public on "honouring climate control legislation" to the contrary. Biden must have been there to give a pep talk while he still could in that capacity.

There's just no talking sense with Trump.
 
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If President Trump and a Republican-dominated Congress pull the US out of NAFTA then I would think that the default legal position for Canada and the US would be the FTA signed by the two countries in 1988. My understanding is that even though the Canada-US FTA was superseded by NAFTA it still remains in force. Assuming NAFTA collapses when the US pulls out then the FTA would kick in, I would think. Are there any lawyers specializing in international trade deals on this forum? ;)
 
My understanding is that even though the Canada-US FTA was superseded by NAFTA it still remains in force. Assuming NAFTA collapses when the US pulls out then the FTA would kick in, I would think. Are there any lawyers specializing in international trade deals on this forum? ;)
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Mexico never was in the FTA. There are chapters in Nafta (some of which Mexico exempted herself by not signing, energy chapters, for instance) which allow exemption in whole or in part.

Best I quote:
Annex 602.3: Reservations and Special Provisions

Reservations

1. The Mexican State reserves to itself the following strategic activities, including investment in such activities and the provision of services in such activities:


  1. a) exploration and exploitation of crude oil and natural gas; refining or processing of crude oil and natural gas; and production of artificial gas, basic petrochemicals and their feedstocks and pipelines;
    b) foreign trade; transportation, storage and distribution, up to and including the first hand sales of the following goods:

    1. (i) crude oil,
      (ii) natural and artificial gas,

      (iii) goods covered by this Chapter obtained from the refining or processing of crude oil and natural gas, and

      (iv) basic petrochemicals;
    c) the supply of electricity as a public service in Mexico, including, except as provided in paragraph 5, the generation, transmission, transformation, distribution and sale of electricity; and

    d) exploration, exploitation and processing of radioactive minerals, the nuclear fuel cycle, the generation of nuclear energy, the transportation and storage of nuclear waste, the use and reprocessing of nuclear fuel and the regulation of their applications for other purposes and the production of heavy water.

In the event of an inconsistency between this paragraph and another provision of this Agreement, this paragraph shall prevail to the extent of that inconsistency.
Click to expand...
http://www.sice.oas.org/trade/nafta/chap-06.asp

Trudeau et al have blithely stated: (gist) "I'm more than willing to reopen Nafta". It's a bluff...Canada has steadfastly refused to return to the negotiating table ever since the agreement was signed, even though the agreement is incomplete and Canada stated intent to do so. There's a new reality on the horizon, and Canada is ill-equipped to deal with it.
 
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steveintoronto said:
Mexico never was in the FTA.
Click to expand...

Yes, I know Mexico never was in the FTA between the US and Canada, hence the reason for NAFTA. ;) I'm old enough to remember the introduction of the FTA.

My point was that if NAFTA falls apart due to the US pulling out then Canada and the US would or could revert to the FTA as a default legal position. The FTA may have been superseded by NAFTA but I think it still remains in force.

http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/fta-ale.aspx?lang=eng
 
books said:
Yes, I know Mexico never was in the FTA between the US and Canada, hence the reason for NAFTA. ;) I'm old enough to remember the introduction of the FTA.

My point was that if NAFTA falls apart due to the US pulling out then Canada and the US would or could revert to the FTA as a default legal position. The FTA may have been superseded by NAFTA but I think it still remains in force.

http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/fta-ale.aspx?lang=eng
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Even if it did, to what benefit? And the default remains the existing Nafta just without the US. I repeat, the FTA as such *never* included or applied to Mexico, so how could we revert to something that never existed in the first place, or are you referring to the US and Canada? In that case, Nafta has superseded the FTA chapter by chapter, and the FTA no longer exists.
 
There's always the French islands of Saint Pierre and Miquelon, just off the island of Newfoundland, we can get a free trade agreement treaty with.

miquelon.png
 
steveintoronto said:
Even if it did, to what benefit? And the default remains the existing Nafta just without the US. I repeat, the FTA as such *never* included or applied to Mexico, so how could we revert to something that never existed in the first place, or are you referring to the US and Canada? In that case, Nafta has superseded the FTA chapter by chapter, and the FTA no longer exists.
Click to expand...

And I repeat that I know that Mexico was never a part of the FTA between Canada and the US. NAFTA is separate from the FTA and if NAFTA collapses then the FTA would be the default trade position for Canada and the US. Any North American free trade agreement without the US is pointless; if Washington pulls out, NAFTA is gone.

Here, you don't believe me, so read it for yourself:

http://www.theglobeandmail.com/report-on-business/rob-commentary/what-would-canada-us-trade-relations-look-like-without-nafta/article32947565/

Quote from the above link:
"Happily for Canada, the cancellation of NAFTA would resurrect the pre-existing free-trade agreement (FTA) between Canada and the United States. Yes, in this case, Mr. Trump is correct: The Americans were outnegotiated. Our side was clever enough to foresee that NAFTA, with Mexico added into the mix, might be problematic and ultimately fail. By an exchange of notes between Canada and the United States at the time NAFTA was negotiated, it was formally agreed that in the event of NAFTA’s demise, the FTA would revive. Mr. Trump’s target is Mexico and his need for leverage to force Mexico to pay for that damn wall. He can accomplish that by abrogating NAFTA and leaving Canada-U.S. trade relations intact."
 
books said:
And I repeat that I know that Mexico was never a part of the FTA between Canada and the US. NAFTA is separate from the FTA and if NAFTA collapses then the FTA would be the default trade position for Canada and the US. Any North American free trade agreement without the US is pointless; if Washington pulls out, NAFTA is gone.

Here, you don't believe me, so read it for yourself:

http://www.theglobeandmail.com/repo...ions-look-like-without-nafta/article32947565/
Quote from the above link:
"Happily for Canada, the cancellation of NAFTA would resurrect the pre-existing free-trade agreement (FTA) between Canada and the United States. Yes, in this case, Mr. Trump is correct: The Americans were outnegotiated. Our side was clever enough to foresee that NAFTA, with Mexico added into the mix, might be problematic and ultimately fail. By an exchange of notes between Canada and the United States at the time NAFTA was negotiated, it was formally agreed that in the event of NAFTA’s demise, the FTA would revive. Mr. Trump’s target is Mexico and his need for leverage to force Mexico to pay for that damn wall. He can accomplish that by abrogating NAFTA and leaving Canada-U.S. trade relations intact."
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Campbell is wrong. But even if he's right, the US could withdraw from the FTA just as easily as Nafta.

As that relates to this sub-discussion:
"The company plans to turn its Kingston facility into a hub for light rail car production for Canada and the United States, Lefebvre said."
http://www.thewhig.com/2016/12/08/bombardier-completes-expansion

A reminder, this was the case under Obama's administration, it's about to get even tighter:
Home › Policy Initiatives
Buy America
Overview
The Department of Transportation is committed to maximizing the economic benefits of the Obama Administration’s historic infrastructure investments through Buy America provisions that keep American companies healthy and families working.

Buy America provisions ensure that transportation infrastructure projects are built with American-made products. That means that Department of Transportation investments are able to support an entire supply chain of American companies and their employees.

In the past, however, it has been difficult for companies to locate Buy America waiver requests posted only to the Federal Register. Now, we are improving access to business opportunities by posting all waiver requests on this page – in one central location – so that any American company can easily see if they can fill a particular need. The website also houses comprehensive information about each of our agencies’ Buy America provisions, requirements and waiver processes. And companies can subscribe to receive alerts when new information on Buy America for U.S. Department of Transportation-funded infrastructure projects is posted.

Together, I believe we can make sure American businesses reap the full benefits of the Obama Administration’s investments in transportation infrastructure. Thanks for visiting.

- Anthony Foxx

[paste:font size="5"]Download Side-by-Side Comparison Information Sheet
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https://www.transportation.gov/highlights/buyamerica

Further to above:
Federal Transit Administration (FTA)
49 U.S.C. § 5323(j); 49 C.F.R. Part 661 (Buy America Requirements);
(See 60% Domestic Content for buses and other Rolling Stock)
Buy America
No funds may be obligated by FTA for a grantee project unless all iron, steel, and manufactured products used in the project are produced in the United States.

Waivers
The Administrator may waive the general requirements if the Administrator finds that:

(1) It would be inconsistent with the public interest;

(2) The materials for which a waiver is requested are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality;

(3) The inclusion of a domestic item or domestic material will increase the cost of the contract between the grantee and its supplier of that item or material by more than 25 percent.

Rolling stock procurements
(a) The Buy America provisions do not apply to the procurement of buses and other rolling stock (including train control, communication, and traction power equipment), if the cost of components produced in the United States is more than 60 percent of the cost of all components and final assembly takes place in the United States.

Other
Labor costs involved in final assembly are not included in calculating the cost of components

U.S. international obligations (World Trade Organization Government Procurement Agreement, U.S. Free Trade Agreements, U.S.-EC Exchange of Letters [May 15, 1995], and Canada-U.S. Agreement on Government Procurement) do not apply. Read about international agreement obligations.

Post only “public interest” waivers in Federal Register.

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Updated: Wednesday, March 4, 2015
Click to expand...
 
steveintoronto said:
Campbell is wrong.
Click to expand...

Oh, well, I'm glad we got that sorted out! LOL It's always good to consult an experienced expert. :rolleyes:

As far as Donald Trump getting stricter with "Buy American" provisions for the FAST Act and other legislation I think we'll all just have to wait and see since Trump has a reputation of saying one thing and doing another. The president-elect is a loose cannon firing off in all different directions. If President Trump does push for "Buy American" across the board it will be interesting to see what happens to those USMC LAV 25s produced in London, Ontario, and that's just one example. Also, keep in mind that Canada and the US have a long history of free-trade agreements going back at least as far as the Auto Pact of 1965. President Trump may want one thing, Congress may want another. At any rate, only time will tell.
 
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