Canadian Shipper


As NAFTA negotiations turn tense, Canadians look beyond U.S

Vancouver, BC — As negotiators for Canada, the United States, and Mexico revealed this week they’ve made little progress on revising the North American Free Trade Agreement (NAFTA), the latest public opinion survey from the Angus Reid Institute finds Canadians increasingly looking to partners other than the U.S. to safeguard international trade.

In the last seven months, as U.S. President Donald Trump has repeated protectionist rhetoric and threatened to “terminate”NAFTA if current talks don’t go his way, Canadian opinion has shifted away from deepening trade ties with the United States, and toward a stronger relationship with the European Union, where a free trade agreement with Canada was ratified earlier this year.

Asked which countries or regions Canada should seek a closer relationship with, the number of Canadians saying “continue to focus on the U.S.” has fallen eight percentage points (from 49% to 41%) since February. In the same time period, the number expressing a preference for the E.U. has grown by 11 points (from 33% to 44%).

Key Findings:

  • Asked to choose the countries or regions with which Canada should pursue closer trade ties, 44 per cent of Canadians opt for the European Union, while 41 per cent say this country should continue to focus on the United States. The United Kingdom – which voted to leave the E.U. last year – is next, at 29 per cent
  • Canadians are divided as to which of Asia’s two largest countries – China or India – their country should put more effort into. Half (49%) choose China and half (51%) choose India. More data on Canadian views on China’s economic relationship with this country will be released next week
  • Also divisive is the question of Canada’s international competitiveness. Half of respondents (48%) think this country is “keeping up” with others, while the rest (52%) think Canada is falling behind

Where should Canada be developing closer trade ties?

If U.S. President Donald Trump follows through on his threat to “terminate” NAFTA and “start all over again with a real deal,” Canada will have choices to make about what it wants its trading relationships to look like in the future. Even if the U.S. doesn’t walk away from the pact that has governed trade in North America for the last two decades, there is no guarantee that the ongoing renegotiation will lead to a better deal for Canada.

Should Canada be looking to further diversify its trading partners? If so, where?

Asked where their country should work to develop closer trade ties in the future, Canadians express a preference for what they know. The European Union – where most of the Comprehensive Economic and Trade Agreement (CETA) with Canada will come into force later this month – and the United States top the list, chosen as a focus by 44 and 41 per cent, respectively.

The fact that the E.U. is now ahead of the U.S. as a trading partner in the minds of Canadians – when as recently as February of this year it was seen as a distant second-choice – may be the result of a combination of factors.

Part of the change is perhaps attributable to and overall response to Donald Trump’s rhetoric. Past Angus Reid Institute polling has shown the President to be deeply unpopular north of his country’s border.

More specifically, Trump’s sabre-rattling over trade issues – including calling Canada’s supply management system for milk, eggs, and poultry “a disgrace” – may have hurt Canadian confidence in their largest trading partner. Canadians with an opinion expect their country to be “worse off,” rather than “better off,” as a result of ongoing NAFTA renegotiations by a three-to-one margin.

Another potential contributor to the rise in support for trade with the E.U. is the ongoing ratification and implementation of CETA. While the pact has faced delays – it was originally scheduled to come into force on July 1, but has been delayed to Sept. 21 – past ARI polling has found CETA to be quite popular with Canadians.

The United Kingdom, which has begun the process of leaving the E.U. and will soon need to negotiate its own trade deals, comes in third (29%).

The U.S., E.U., and U.K. each fare better than China (24%), where the federal government has been courting a free trade agreement in recent months.

Click here to read the full report.