The Consequences and Gains of the North American Leaders’ Summit
Assessment of the implications following the North American Leaders Summit and the future of businesses in trade relations.
Key Words: Global political economy; macroeconomic; trade conventions; international society.
A Push towards Free Trade
In Ottawa Canadian Prime Minister Justin Trudeau, United States President Barack Obama, and President of Mexico Enrique Peña Nieto met at this year’s North American Leaders’ Summit to discuss potential economic advancement and avenues for building upon existing economic relations in North America under a global political economy. With a goal of creating jobs, strengthening local communities, and building a clean economic future, the summit is paramount to strengthening ties between the three states and setting a future of sustainable free trade. The tradition of partnership and a push for free trade between Canada, the United States, and Mexico extends beyond the geographical and physical proximity and contains a long history of agreements, commerce, and shared economic dependency as far back as confederation in the 18th century. The North American Leaders Summit was created in 2005 and held annually, it marks a relatively new step in the direction in favor of free trade and globalization from the three states. If increasing the political ties between countries produces long-term policy and trade, then the push for free trade is an avenue businesses and corporations will be forced to adapt on a macroeconomic level to succeed in the future. Potential prosperity of trade agreements, such as ones created under the North American Leadrers’ Summit, will result in the diversification of local economies and a push to advance international society to sustainable policy.
Hitting the Home Market
The prospect of free trade is defined by its collective open-door attitude towards businesses, suppliers and buyers not restricted to a set institution or business. The opposing view of free trade is protectionism; closing the home market to all international buyers and sellers. To engage in free trade means opening a business market to buyers of any class, organization or ethical opinion. To put it into context: the vast farmers who grow produce and livestock in the fertile farm lands of Norfolk County (just 1 hour east of the Waterloo region) will begin to compete with the even larger farmer markets in the states as free trade between Canada and the U.S. increases. The once protected home market that Ontario dairy farmers sold their produce in will be extended to the United States, both as a potential market of buyers and as competition from American dairy farmers.
To properly assess the gains and benefits of opening trade relations, the long-term gains need to outweigh the loss on the small business market enough to compensate for the loss created by the increased competition. As the North American Leaders Summit focuses on strengthening ties between home markets, the potential loss felt by small business owners who cannot compete on with cheaper product need not be ignored by Trudeau or Obama.
Building a Strong International Society
The long-term prospects of trade between Canada, the United States, and Mexico are only strong insofar as legitimate policy is established and implemented properly into the home markets. The important aspect of the North American Leaders Summit is not innately in its push for increased free trade, but in its positive momentum towards fostering sustainable and long-term jobs that strengthen communities.
A determining factor of a countries economic policy and ability to engage in strong trade relations is from its involvement in the international market. Dubbed “international society”, economics between countries is hinged by the laws set between countries, while simultaneously working independently from the countries internal laws and customs. One of the agreed upon stances in international political economy is that “free trade is almost always better than protection” Being able to work cooperatively together, the United States, Canada, and Mexico will have to also be mindful of each countries unique preexisting economic structure to decide on avenues that will best present long-term and sustainable future trade that can be successful. Should one sector that was once a strong producer in said country loose to competition cross-border, the backlash to the policy will be persistent. With job loss and a dwindling home market, it is sometimes risky to bet on opening trade relations at the expense of increasing competition to their own businesses.
Avenues of Trade and Politicians
The North American Leaders summit must build upon the already pre-existing relations between countries. Despite the debate of free trade and the concerns and criticisms, the future of opening the market is certain for Canadian businesses. The creation of any new policy will be hindered by the preexisting laws, policy, agreements, and conventions already in place in each country. The changes to economics through avenues of trade will not be birthed overnight, but by gradual integration with other trade agreements to prevent friction. Any potential agreements and new trade policy will diversify the markets between North America, all of which will begin in the meetings between our countries’ leaders. It is detrimental that businesses seeking to prosper keep one eye on the future markets of economics and another on the future decisions of our countries politicians.
