America and Canada have one of the greatest trade relations in the world.
President Donald Trump met for the first time on Monday with Canadian Prime Minister Justin Trudeau.
“We have a very remarkable commercial relationship with Canada,” Trump said at the press conference.
But the trade relationship of the United States-Canada over the years has not been as fluid as you might think. There have been commercial wars, acts of reprisals, allegations of dumping and lost jobs.
“Our commercial relationship is obviously strong … But the relationship was difficult, despite the agreements we have in place,” said Stuart Trew, editor -in -chief of the Canadian Center for Political Alternatives, a research group in Ottawa, the capital of Canada.
Trump has often criticized Mexico and Alena, the trade agreement between the United States, Mexico and Canada. But Canada is rarely mentioned.
However, there have been more requests for Alena disputes against Canada – almost all by American companies – than against Mexico. Even today, Canada has rigorous prices against the United States and the two parties only recently resolved a bitter dispute against meat.
Most leaders and experts point out that the commercial links between the two nations are strong and above all positive. But Canada and America had a lot of battles along the way.
Now Trump wants to renegotiate Alena, who will be at the top of the agenda for his meeting with Trudeau.
1. Canada has more Alena problems than Mexico
By listening to Trump, you might think that Mexico is the bad actor of the Alena. But since the creation of Alena in 1994, 39 complaints have been brought against Canada, almost all by American companies. Known in industry as the settlement of disputes of the investor disputes, it allows companies to resolve business within the framework of a special panel of Alena judges instead of local courts in Mexico, Canada or the United States
There were only 23 complaints against Mexico. (In comparison, companies in Mexico and Canada have filed a total of 21 complaints against the United States)
And more and more, Canada is the target of American complaints. Since 2005, Canada has been affected with 70% of Alena disputes, according to CCPA, a Canadian research firm.
2. The United States – Battle of Bois du Canada
Alena is not the only painful area. In 2002, the United States slapped a price of around 30% on Canadian wood, alleging that Canada “poured” its wood on the American market. Canada rejected the complaint and argued that the price cost 30,000 jobs to its wood companies.
“It was a very sour Canadian point – American relations for a while,” said Tom Velk, professor of economics at McGill University in Montreal.
The dispute had its origins in the 1980s, when American wood companies said that their Canadian counterparts were not just playing.
The question of whether Canada breaks the rules is a question of dispute.
Canadian officials deny that the government subsidizes timber companies in Canada. American wood companies still allege that this is the case, and a report from the US trade department found that Canada offered subsidies to woodworking companies in 2004. He did not say if the subsidies were underway.
According to allegations, Canada has subsidized wood companies because the government has many land where wood comes from. This subsidy – In addition to the enormous diet of Canada's lumber – allowed Canada to assess its wood below what American companies can charge.
The World Trade Organization was finally taken on the side of Canada, denying America's complaint and the two parties reached an agreement in 2006 to end the price.
However, this agreement and its period of grace that followed expired in October, and the two parties are back. The Obama and Trudeau administrations were unable to compromise before Obama leaves his duties and remains a controversial commercial problem with American wood companies calling for prices again.
Related: “without alena”, we would be bankrupt
3. Smoot -hawley triggers us – Canada Trade War
Things still worsened during the great depression. In 1930, Congress wanted to protect American jobs from world trade. The United States has therefore slapped prices on all countries that have sent goods to America in order to protect workers.
His name was the Smoot-Hawley Act. Today, it is widely admitted that this law has aggravated the great depression that it was.
Canada was furious and retaliated more than any other country against the United States, causing a trade war.
“Canada was so exasperated that … they raised their own prices on certain products to match the new American rate,” according to Doug Irwin, Dartmouth teacher and author of “Peddling Protectionism: Smoot-Hawley and the Great Depression”.
For example, the United States has increased a price on eggs from 8 cents to 10 cents (these are the prices of the 1930s, after all). Canada has retaliated by also increasing its rate by 3 cents to 10 cents – a triple increase.
Exports have decreased sharply: in 1929, the United States exported nearly 920,000 eggs to Canada. Three years later, he only sent 14,000 eggs, according to Irwin.
Related: Remember Smoot-Hawley: the last US trade war
4. Prices of the high sky of Canada on American eggs, poultry, milk
Quick advance until today. Smoot-Hawley has long disappeared, but Canada continues to charge steep prices on American imports of eggs, chicken and milk.
For example, some egg prices reach 238% by dozen, according to to the Canada Department of Agriculture. Certain imports of milk, according to the fat content, reach 292%.
“They are so expensive that you cannot pass it out. There are no American eggs in Quebec,” said Velk.
According to the Canada Embassy in the United States, reality is very different. Its officials say that despite rigid prices, Canada is one of the best export markets for American milk, poultry and eggs.
The United States has prices on certain goods from all countries, but it is not as high as those in Canada.
Experts say that these prices continue to annoy certain producers of American dairy and poultry, some of which are challenged to sell on the Canadian market. But they doubt that many will change because the prices have been in place for decades now.
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5. Fresh heads and the future of Alena
Despite all these disputes, experts point out that this commercial relationship is always one of the best in the world.
In fact, the two countries are so interconnected now, when commercial disputes sometimes break out American companies are on the side of Canadian companies and against American legislators.
For example, Canadian meat producers have challenged an American law which forced them to label when the cattle was born, high and shot. Canadians said the law discriminated against its meat to sell in the United States and brought the WTO case.
The WTO fell on the Canada side and last December, the Congress repealed the country of origin. American meat producers – whose business is linked to Canada – in fact supported their counterparts in Canada, arguing that the regulations were too heavy.
As for Trump's proposal to tear Alena, many American and Canadian experts say that it is not worth renegotiating or ending the agreement. The three countries that are part of the agreement are so tangled with each other that disentangling all this integration would be detrimental to trade and economic growth.
– The publisher's note: This story was initially published on August 11, 2016. We have since updated it.
CNNMONEY (New York) First publication on February 13, 2017: 11:11 am am he
