In the News ˙ Jan 09, 2018

Small Businesses Concerned with NAFTA Changes

Small Businesses Concerned with NAFTA Changes

The Canadian Federation of Independent Businesses (CFIB) recently released a report in response to consultations concerning the North American Free Trade Agreement. It transpires that 28 per cent of Canadian small businesses that trade with the U.S. and Mexico feel their export and import plans might be affected by the renegotiation of the agreement.

According to the Office of the United States Trade Representative, the agreement was entered into force in 1991. In May 2017, U.S. President Donald Trump announced his wish to commence negotiations with Canada and with Mexico that would significantly change the NAFTA guidelines.

The CFIB conducted a survey of Canada's small and medium-sized businesses to determine their feelings on the negotiations. The report, titled "Small Business Views on NAFTA," presented the results of a survey featuring responses of nearly 5,000 small and mid-sized business owners. Interestingly, 63 per cent of respondents indicated that they bought goods and/or services from the U.S. and/or Mexico during the past three years. Meanwhile, almost 75 per cent of those surveyed indicated that they chose to increase their exports to these countries because they wanted to expand their business or determine whether or not there was a growing market demand for their product. In other words, it seems that small and medium-sized Canadian businesses have a chance to learn and benefit from this trade agreement.

Of the current NAFTA consultations, Corinne Pohlmann, CFIB senior vice president of national affairs, was quoted as saying, "There is a real concern, among our membership, that any changes to NAFTA could have significant effects on their ability to sell goods and services abroad, on their cost of importing goods, and on their ability to pass savings onto consumers." She also stated, "As the negotiations begin, we have to ensure that NAFTA creates even more, not less, business opportunities for Canadian firms."

According to the report, the potential renegotiation of NAFTA may affect up to 70 per cent of business owners in Canada, and 42 per cent of those surveyed indicated that they weren't sure what its outcome would mean for them.

Pohlmann argues that these business owners should have a voice in what happens with NAFTA as they will likely feel its effects in one way or another. She further stated, "Given their prominent role in the Canadian economy, small and medium-sized business owners should have a big say in the future of NAFTA and any changes that may ensue."

The report concludes in an optimistic manner, hoping that these negotiations will eventually strengthen the NAFTA agreement. The CFIB made a "number of recommendations" intended to represent the views and preferences of small business owners, which include ensuring that the free flow of labour remains an important component of NAFTA, the continued practice of trucking issues being resolved at the borders, fair and equal resolution of any disputes arising between all countries in NAFTA-tangential transactions, and maintaining the importance of duty-free stipulations.