No. of Recommendations: 4
...is cooked when they hook themselves up to the European Union:
commonplace.substack.com - The real economy the canada gooseI have been sympathetic to Canadian complaints that President Trump’s constant efforts to insult their country are inappropriate and unhelpful. At the same time, Carney’s determination to elevate himself to some anti-Trump hero of the globalist pearl-clutchers is at this point obviously causing far more harm to our northern friends.
As the Financial Times, which rather better understands the EU, reports on consecutive days: EU capitals rebuff Mark Carney’s ‘unique alliance’ with Canada and Why Mark Carney’s romance with Europe can only go so far.
Canada also faces the awkward problem that 70% of its exports go to the United States and only 6% go to the EU, notes Peter Harrell. And it’s unclear what Canada could hope to gain anyway, notes Nicholas Phillips. For instance, “there’s nothing to gain on competitiveness: regulatory alignment can only go in one direction, toward the EU, which is a proven formula for economic stagnation.”
And then there’s the question of who would ever look to the EU as a functional example of strengthened sovereignty through deeper and wider relationships. Its inability to address the China wave now crushing its own industrial base is a glaring weakness (and contrasts helpfully with the sort of robust confrontation the Trump administration is insisting on for USMCA).Somebody will attempt to point out how strong the EU economic zone is by posting size numbers, blah blah blah. But they'll miss the point: draconian energy policy, draconian regulations and extensive bureaucracy has capital formation drying up over there. Growth is stagnant. And now the Chinese are eating their manufacturing base. If Carney wants that for Canada, let him.
Speaking of which: Imports of Chinese autos into Europe continue to skyrocket. The latest plan? EU asks China to voluntarily limit car exports (Financial Times). “Brussels is seeking a commitment from Beijing to restrict sales of China-made hybrid vehicles to about 15 per cent of the EU market compared with more than a third today.” Good luck. Meanwhile, in the real world, “President Xi has called for China to make its advanced manufacturing sector ‘bigger and stronger’ and strengthen control over key industrial supply chains, official news agency Xinhua said Thursday” (Reuters). Oh, and Michael Pettis points out that “China has unveiled a sweeping five-year plan for its electronic information manufacturing sector, aiming to boost the industry’s annual revenue beyond 30 trillion yuan ($4.5 trillion) by 2030.” (For reference, the combined value of the entire global consumer electronics and semiconductor markets is today around $3 trillion.)
There is no economic future for Canada in a free-trade zone unable to protect itself from China, which will in turn mean its own goods will face increasingly robust exclusion from the American market. The longer it pretends otherwise, the less leverage it will have when it comes back to the USMCA table, and the funnier President Trump’s jokes will become.Meanwhile, the US and Mexico will keep growing closer.
