Canadian Free Trade Framework Mitigates A NAFTA Demise

The NAFTA is a very valuable agreement, but it would not be the end of the world if it disappeared.

That is a bold statement, to be sure, and "end of the world" sets a high bar. But many believe that if NAFTA somehow disappeared it would spell disaster. This view is far too pessimistic. Frankly, NAFTA was long overdue for an update, which is part of the reason we find ourselves in the current renegotiation scenario.

But there are several moving parts in play that should help mitigate the uncertainty hampering the investment climate in Canada, even now as the United States contemplates withdrawing from NAFTA.

First, there is some question as to what role the U.S. Congress would play and what treatment Congress would accord to both Canada and Mexico in the absence of NAFTA. It is important to note that in the United States, the free trade treatment accorded to Canada and Mexico is made effective through American legislation—not by the provisions of NAFTA. Clearly