I was a little harsh against Brexiteers, thinking how ridiculous it was of them to turn their backs on their main trading partners. But at the same time, what happens when those same partners force the UK to take sides?
In some respects, Trump will do this to Canada. If Trump decides that to preserve NAFTA, Canada will need to toughen its country-of-origin provisions (and so essentially force Canada to choose between joining the US in a trading block or leaving the block in favour of free trade with the world), then Canada will have a tough decision to make. The short-term economic benefit to Canada would lie with joining the block, but that could be politically poisonous in the long term as it would send the US the message that Canada can be pressured into compliance.
Should Canada choose instead to leave the block and trade with the world, that might hurt both the Canadian and US economies in the short term, but it would also send the US the message that Canada is not afraid to hurt itself economically if necessary to play hardball with the US and so hurt the US economy too even if it hurts the Canadian economy more. Such action could lead the US to then think twice in future trade negotiations about trying to force Canada to choose between trading partners. It is a tough dilemma to be in, and I suppose that was the one the UK was in. By turning its back on the EU to trade with the world, the UK was also sending the EU the message that the UK does not fear hurting its own economy in the short term if necessary so as to send the EU the message that the EU cannot blackmail the UK into choosing between trading partners.
Perhaps Canada should join the UK in a trade deal without country-of-origin provisions. In other words, a non-coercive trade deal that would still allow the UK to trade with whom it wants and Canada to trade with whom it wants. Open trade deals, not closed trading blocks.
In some respects, Trump will do this to Canada. If Trump decides that to preserve NAFTA, Canada will need to toughen its country-of-origin provisions (and so essentially force Canada to choose between joining the US in a trading block or leaving the block in favour of free trade with the world), then Canada will have a tough decision to make. The short-term economic benefit to Canada would lie with joining the block, but that could be politically poisonous in the long term as it would send the US the message that Canada can be pressured into compliance.
Should Canada choose instead to leave the block and trade with the world, that might hurt both the Canadian and US economies in the short term, but it would also send the US the message that Canada is not afraid to hurt itself economically if necessary to play hardball with the US and so hurt the US economy too even if it hurts the Canadian economy more. Such action could lead the US to then think twice in future trade negotiations about trying to force Canada to choose between trading partners. It is a tough dilemma to be in, and I suppose that was the one the UK was in. By turning its back on the EU to trade with the world, the UK was also sending the EU the message that the UK does not fear hurting its own economy in the short term if necessary so as to send the EU the message that the EU cannot blackmail the UK into choosing between trading partners.
Perhaps Canada should join the UK in a trade deal without country-of-origin provisions. In other words, a non-coercive trade deal that would still allow the UK to trade with whom it wants and Canada to trade with whom it wants. Open trade deals, not closed trading blocks.
