NAFTA talks 'absolutely fundamental' to provincial economy, says manufacturers group

As talks to modernize the North American Free Trade Agreement kicked off Wednesday, a lot is on the line for New Brunswick businesses trading with the United States.

Fifty per cent of the province's gross domestic product is tied to exports, and New Brunswick is the most extensive trade economy in the country, said Joel Richardson, regional vice-president of Canadian Manufacturers and Exporters.

He said the renewed NAFTA negotiations are "absolutely fundamental" to the provincial economy.

"We export more to the United States and the rest of the world than anyone else does as a percentage of our overall economy," Richardson said.

"There's thousands upon thousands of families in New Brunswick that are relying on manufacturing and exporting in the U.S. and selling to the U.S. So it's tremendously important."

Reduced trade barriers

Foreign Affairs Minister Chrystia Freeland said this week that Canada is looking for a progressive trade deal, with stricter environmental and labour standards, as well as a focus on climate change.

The country also wants freer movement of professionals, and protection of its supply management system for dairy and poultry, since Canada does not have free trade in these areas.

Richardson said businesses in New Brunswick and Atlantic Canada want to see reduced barriers to moving goods and people between the countries, to increase jobs on both sides of the border.

When NAFTA was signed in 1992, it predated a lot of industries now on the rise in the region, including the high-tech and service industries, he said.

"Engineering firms travel more globally now than they did back then," he said. "We would like to look at the inclusion of service industries, of high-tech firms in NAFTA, to really grow our business in that area."

'Buy American' a worry

Richardson also said it's concerning when U.S. President Donald Trump continues to push a "Buy American" strategy and said it's important to remember that "we build goods together with the United States."

"We import a lot of raw materials, food products, agricultural products, machines and equipment from the U.S.," he said. "We manufacture it here in New Brunswick and then we re-export it to customers in the United States."

Brad Howland, president of Easy Kleen, a Sussex-based manufacturer of pressure washers, said 40 per cent of his business is now with the United States, though he also exports to 15 other countries, including China.

Pressure washers are used in the construction industry, oil fields, manufacturing and mining.

Howland said Easy Kleen is now building five special units for a U.S. submarine fleet after having "very good success with the U.S. military and not very much success with the Canadian military."

He said he's less worried about the outcome of the negotiations in Washington than about the government's ability to negotiate on his behalf.

"I'm not confident at all in their ability to negotiate," he said. "Our politicians aren't business people. They don't know the story."

Softwood lumber

While Freeland remained optimistic ahead of Wednesday, she also announced earlier this week that Canada could walk away from the talks if the U.S. pushed to remove a key dispute-settlement mechanism in the trade deal.

The so-called Chapter 19 regulates disputes between companies over dumping and illegal subsidies, including cases such as softwood lumber.

Negotiations on the softwood lumber dispute between the two countries are expected to run a separate, parallel track, after the U.S. and Canada failed to settle their dispute over duties in the weeks ahead of the NAFTA talks.

Softwood lumber trade is not part of NAFTA and is governed by separate agreements.

Jim Carr, federal minister of natural resources, said Wednesday that the conversation about softwood lumber between Freeland and U.S. Commerce Secretary Ross Wilbur continues.

"I think they speak a couple of times a week," he said. "They meet often. They are working hard."

He also stressed that Canada won't settle for anything "but for a good deal for Canada."

At a news conference in Shediac on Wednesday, François-Philippe Champagne, the minister of international trade, pointed to Canada's free trade agreement with Europe, and said the country is also looking to Asia and South America for potential new agreements.

He said Canada is entering the NAFTA talks with confidence.

"It's about how can we make more together, build more together, then export to the world," he said.

"Our economy is very much integrated in our supply chain. Trade is part of our DNA."