TORONTO - Everyone is all aflutter because President Trump has vowed to demolish everything that stands in the way of making America Great[Again]. Soft targets like the Trans Pacific Partnership (TPP) are already history – victims of Executive Orders – because they were merely in the negotiation stage.
But, because Trump sees “bogeymen” everywhere, he has mused about the North America Free Trade Agreement (NAFTA). It should be a much tougher nut to crack. It has been there since 1994, weather the test of reciprocal profitability, court challenges and chicanery by businesses and pliable politicians.
Canada and Mexico must be on the alert and wary. But, they are not the real target. Nor are they without “partners” in the dance for market access.
President Trump has summoned the President of Mexico and the Prime Minister of Canada to talk about “improving the NAFTA”, otherwise. Presumably he could sign Executive Orders to begin the process of withdrawal. It is not a quick and dirty process.
He might even bully some of the Industrial sectors covered by the NAFTA with either the threat of tariffs (probably illegal and unenforceable under the rules today) or increased taxes on American companies that defy his “invest in America, or else” policy.
It is unlikely, as long as the USA stays in the World Trade Organization (WTO), the arbitrating component adjudicating on the General[ly negotiated] Agreement on Trade and Tariffs.
The USA and other leading Industrial Powers have worked hard to “discipline the marketplace” – and continue to do so – in order to level the playing field. And to provide companies with protection against bully tactics by governments like that which Trump muses about leading, or against special treatment for competitor companies.
Canada has been there before. In fact, the WTO has a special case study on Canada, NAFTA and the Auto Sector. It is a well researched (though sometimes technical) piece revealing the sly, behind-the-scenes manipulation of rules, the “caving in” to domestic political pressures, the use of “alternative facts” followed by [humiliating] political damage for the government of the day.
The study is replete with ironies. The bullies of the day were the [Detroit] Big Three Automakers. They did not like the market strategies of European and Japanese counterparts who located in Ontario to take advantage of the NAFTA provisions – negotiated by the USA with Mexico and the government of Brian Mulroney, later ratified by Canada’s Jean Chretien in 1994.
Canada was in clear violation of the NAFTA, because it did not treat the Japanese and European as North American companies, even though they complied with all the measures and proved a veritable boon to the Manufacturing sector (Auto) in Ontario.
The Big Three, and their Union allies, they prevailed on a Cabinet pre-occupied with the pressures emanating from Quebec, pre-and post-Referendum, to defend their interests at the WTO. After a negative decision, they further convinced the government to appeal. Canada lost.
General Motors, which had been “promising” to keep a plant in St Therese, Quebec, open, in return for government action at the WTO, vacated the province. They must have been operating in a milieu where “alternative facts” are the norm.
The point is that, while both Canada and Mexico are saddled with weaknesses, their position in NAFTA is now stronger for the expiry of the TPP. At least as far as the Auto sector is concerned.
If Trump’s USA is truly concerned about the growing Auto sector in China, it should be encouraged to improve the local content provisions under NAFTA as a start.
Of course the negotiations and National positions are more complex but there has to be a beginning. If Trump needs some sort of “face-saving win”, Canadian negotiators might look to the TPP as a “bullet they dodged” when they ceded negotiating authorities to their American counterparts and insist on strengthening their relative positions in the NAFTA.
TORONTO - Two hundred years ago, the USA, emerging from a successful war of Independence from Mother Britain, fashioned a “Foreign Policy” that, in layman’s terms, claimed all the land between the Atlantic and the Pacific as property of the USA, to do with it as it pleased.
Because God willed it. It was America’s Manifest Destiny. President James Monroe in the early 1820’s refined it to include the entire Western Hemisphere, warning all European Nations that the USA would consider their active presence in the Americas as a threat to its interests, and would react accordingly.
Trump’s version of this Monroe Doctrine may seem less refined. In his inaugural speech, he reminded everyone that he will “renegotiate everything” so that the USA will come out ahead.
In case anyone is confused, this means the USA must come out on top: “we’ll negotiate until I win. You must, therefore, lose. The only issue is by how much.”
None of this is new. He has been repeating that he would renegotiate everything so that America would get its fair – bigger – share. Truth and fact will be the first casualties of the Trump Era. So, on what basis will there be negotiation? His surrogates are already insulating him from any value structure, moral or legal, by saying they will [always] have “alternative facts” to the truth.
Twenty four hours after the pomp and ceremony of his inauguration, women in the USA produced an impressive numerical rejection of his leadership with an unexpectedly - hugely – successful demonstration of opposition to him and what he represents.
Therein may be the clue to how “partners”, existing and potential, need to approach Trump: united and with a game plan. Woe the country that allows itself to be isolated or separated from its military or trading alliances.
The Russians have already cautioned that Trump may need some time before he becomes accustomed to the “nuances” of Foreign Policy. The Europeans – minus England have started to signal that, while they are always willing to discuss issues, their focus is on upgrading relationships for reciprocal improvement.
Even the English are already hedging their bets on what to expect from a potential trade agreement with the USA that may indeed be worth considerably less that what may be lost over time with a Europe restricted to keep England out.
Assuming Trump is serious about addressing the real problem facing the American economy, his target will be China, the Industrial behemoth destined to only grow bigger. China has four times the population of the USA. Its GDP is already on a par with that of the USA, and with Europe. It holds a commanding percentage of the American debt. It already produces about 70% of the world’s manufacturing.
It has become THE biggest player in the global transportation business. Domestically, on a per capita it is still much smaller than its European and American counterparts. But, if its economies of scale are any indication, it will outstrip any and all competitors in the near future.
American businesses, Trump’s included, are locating in China for future growth. 83 countries already have the EU as their largest export market, 28 have the US and 14 have China, according to an international online statistics aggregator, Nation Master.
The European Union is the biggest market for both American and Chinese products. The USA is the biggest market for Europe, as it is for Mexico and Canada. The other nations who rely on the USA are secondary players.
Globalization has so far worked for the Americans. So has the NAFTA, the North American Free Trade Agreement.
Yet, Trump has decided to “squeeze” America’s most important trading partners – Canada and Mexico – to send a signal to its rivals Europe, and more importantly, China.
Four children orphaned by the earthquake receive the funds
TORONTO - This past September, several businessmen and local artists came together to organize a gala evening in support of the victims of the earthquake that struck central Italy in August. With the support of the Corriere Canadese, in just 10 days, Filippo Aiello, Vinz DeRosa, Luciano Lista, Michael Iamundo, Tony Zingaro, Joe Volpe and Adal Simeone were able to organize a spectacular event at the Fontana Primavera Convention Centre in Woodbridge. The project “Italian Earthquake Relief 2016" was thus born.
With the participation and donations of over 400 people, including most notably that of Filippo Aiello who donated the services of Fontana-Spring Convention Centre, more than $ 40.000 dollars were raised for the evening.
We greatly appreciate the efforts made by many local artists including Chris Dallo, Enrico Galante, Vinz DeRosa and his orchestra, Rino Iannone (master of ceremonies), Tony Leluzzi, Nicole Bernabei and others who donated their talents and put together an excellent show .
Soon after the event, we started a search to locate four children orphaned by the earthquake that struck in a particularly terrifying way the town of Amatrice. Our goal was to personal bring these children immediate and significant assistance.
Tony Zingaro, through the efforts and cooperation of the Guardia di Finanza of Rieti and several parishes of the various neighbouring towns managed to identity four children: Chiara, Francesca, Gabriele and Alessandro.
He then travelled to Italy to meet first with the two boys Gabriel and Alessandro. On December 14, 2016 he personally handed them each a cheque for $10,000 in the presence of relatives, priests and local dignitaries at the parish of San Giovanni Battista de Rossi, in Rome.
"I was impressed by the manner in which the children talked to each other about the terrible events that struck their families. They were fully aware of a drama that will always be with them, but willing to talk about it as heroes. Suddenly they were forced to grow up" said Tony after meeting the children.
That same evening, during a gala event organized by the Guardia di Finanza to raise additional funds for the children in the Town of Rieti, Chiara and Francesca, also received a cheque from the hands of Tony Zingaro, at the Teatro Vespasiano in Rieti. Enzo Maiello an official of the Guardia di Finanza who collaborated with Tony Zingaro was also present at the event.
Il Corriere, on behalf of Chiara, Francesca, Gabriele and Alessandro wishes to express its gratitude to all the readers, friends and supporters for this great and admirable gesture.
TORONTO - For every action there is a reaction. It is as true in politics as it is in physics, even if the casual observer is often oblivious of his environment. In a world consumed with attention directed towards the swearing-in of President Trump, the election of Antonio Tajani as President of the European Parliament could not have happened at a more propitious time for Canada.
Mr Tajani is a committed Eurocentric politician. A former journalist whose political roots are fiscally conservative, his sorties into Italian politics have never resulted in elected office, Nationally. The consequence is that over the last two decades he has honed his personal, political skills as a non-partisan, Euro Parliamentarian – a “Europe Firster”, to coin a phrase – one dedicated to a federalist “bigger picture”.
His urbane, sometimes self-effacing, non-confrontational, approach won over the majority of Euro Parliamentarians from the Centre and Centre-Right of the political spectrum. He will be a welcome change from his predecessor, President Martin Schulz whose sometimes abrasive and dismissive demeanour resulted in extra work for those tasked with building consensus.
Mr. Tajani could prove to be an invaluable ally in Canada’s goal to ratify the CETA. He has a demonstrated history of supporting those strategies aimed at growth and expansion rather than at austerity and retrenching. His approach is globalist more than Nationalist.
Canada, which is committed to and reliant on market access for its own well-being, especially in the face of a currently, outwardly protectionist President-elect Trump, will need friends in the world’s biggest economic trading block – Europe – to mitigate its risks.
It is helpful that both Global Affairs Minister, Chrystia Freeland and International Trade Minister, Francois Philippe Champagne, speak Italian. While that is not a pre-requisite for dialoguing in a truly multi-ethnic and multi-lingual environment like Europe, it helps to build the natural affinity and ease of relationships with people who may not require the use of translators except for the exactness of official documentation.
Equally important for the Canadian team is the relationship between Mr. Tajani and his former political colleague, Italian Foreign Minister Angelino Alfano, who is also the leader of the Centre Right political segment of the Italian Parliament.
Mr. Alfano has recently begun to express himself in language that is decidedly more ultra-montane. Perhaps it is a reflection of the impact of his chief of staff, former Ambassador to Canada, Gian Lorenzo Cornado. The Ambassador is an unabashed Canada-phile, having served here in three separate tours of duty. He knows Canada, its Canada-US dynamic and the country’s reliance on extra-territorial trade like no other Diplomat in recent memory.
Italy will be key in the re-organization, real or cosmetic, of the European Union. Mr. Tajani defeated a fellow Italian and close personal friend, Gianni Pittella, around whom the European Left-leaning Parties coalesced. Mr. Pittella is also a personal friend of current Prime Minister Gentiloni and former Prime Minister, Matteo Renzi, now Party secretary of the PD.
The point of all of this is that regardless the challenges of a new Administration in Washington, to which Canada must rightly direct much attention, our international interests are not limited to one deck of cards.
TORONTO - “What a tangled web we weave, when first we practice to deceive.” - Walter Scott.
Ahh ... The Auto Industry. The last remnant of a once thriving manufacturing industrial sector in North America. Its leaders run it with a style and ethic reminiscent of nineteenth century "robber barons" whose operating principle is best reflected by the old Industry adage: what’s good for GM is good for the country.
Today, their devotion for research and innovation to meet competitive dynamics and satisfy customer seems to revolve around inserting software into their products so that they can defeat safety and environmental legislation. The only legislation they support is the one that protects them against competitors or market penetration of innovative competitors.
They have become expert at stock market manipulation and at begging for government grants. They resist vehemently any effort to have them comply with regulations and laws introduced by democratically elected bodies to bring them into line with the expectations of civilized societies.
In the last several years, one after the other, the major auto assemblers have been brought before Congressional Committees, Transportation Agencies, and Civil Courts tasked with arbitrating class action lawsuits by aggrieved consumers, First Toyota’s President was compelled to justify before the American Congress why his company’s products were putting lives at risk, unnecessarily. Then, GM was faced with fines and recalls over their reluctance to replace a corrective part costing pennies.
The "biggies", so to speak, involved VW’s elaborate scheme - according to the Environmental Protection Agency, in the USA - to circumvent the rules against the emissions of toxic gases, thereby defeating the intent of the law, the objectives of legislation and thus gaining an unfair advantage in the marketplace.
VW was fined 4.3 USD billion and is facing a further loss of 17 USD billion in civil court. Moreover six of its senior executives are facing criminal charges and jail time, if convicted. Five of them probably cannot be extradited from Germany.
Not to be outdone (sarcasm intended), one of the Detriot Three - [Fiat] Chysler Automotive (FCA) - in this last year has been the target of recall notices for hundreds of thousands of defective vehicles; fined in excess of $700 million USD for misreporting sales in order to boost share value on the Stock exchange; and, now, for allegedly installing "defeat mechanisms" in its diesel-powered vehicles. In essence, despite the denials of its CEO, Sergio Marchionne, FCA, appears to have been as guilty as VW.
Mr. Marchionne, some readers may recall, famously called himself a "shark" when he demanded a $700 million CDN subsidy for FCA from the "minnows" in Ontario in order to stay at the Brampton plant, says there is no comparison.
One would have to be stupid to deliberately install this technology, he is reported to have said to US Media. He could not explain how it was discovered in at least 104 000 of his North American vehicles. Nor did he know anything about this investigation prior to the EPA allegations on Thursday, he says.
Wonderful. The German government has been trying to tag the government of Italy with the responsibility for Fiat’s contravention of similar legislation in Europe. Even if one puts aside the fact that FIAT is headquartered in England, and that the German tactic is probably designed to place both the British and Americans on alert that trade relations with Europe cannot be easily altered, Mr Marchionne cannot have been completely asleep at the switch.
In a show of bravado and support for incoming President Trump, On Tuesday he had announced that FCA would be prepared to invest $2 Billion USD in the USA. Only a cynic (sarcasm again) would suggest that there was a connection between the EPA’s allegations revealed Thursday and his effort to ingratiate himself to Trump.
The potential fine of $4,6 Billion USD represents about 35% of the company’s market capitalization on the New York Stock Exchange. Add that to the virtually unbearable debt burden of the company and its aging product line relative to those of its competitors, it hard to see a rosy picture ahead for FCA.
In an Auto sector meeting in Detroit last week, Mr Marchionne got the "Theresa May treatment": he was virtually shunned.
A few short years ago, mr. Marchionne was heralded as the saviour of FIAT. Now he is saddled with the perception that his accomplishments were achieved by breaking the rules.
Has he been caught? Time will tell, but the courtship aimed at selling Fiat to VW is all but over.