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Discussion (11 Comments)Read Original on HackerNews
I think Carney is unlikely to let that happen.
Australia’s most recent FTA with the US was lopsided because AUS still had a policy of hoping the US would come to her aid if necessary and so placated the giant, and the GWB administration took advantage of that.
These days that’s unlikely to happen because people understand that that era is over and the current government has more spine.
Krugman avoids answering the interviewer's question about whether Michiganites support having so much of the automobile supply chain outsourced to Canada, because he knows that the answer is "No". He instead says that the US has more auto jobs because of the cross-border integration than otherwise. The decline of the US auto industry began very soon after the start of the auto pact. I don't mean to say that the latter caused the former, but it would certainly be possible to make a case for such.
Trump's view is that Canada needs the US a lot more than the other way around. He's right. Every Canadian province except one trades more with the US than the rest of Canada, and every Canadian province is (far, far) more dependent on international trade than 48 of 50 US states. <https://www.linkedin.com/posts/goldfarbdanielle_we-make-thin...> At the end of the day, there is no way to get around the verity of another Krugman observation, that Canada is closer to the US than to itself. <https://krugman.blogs.nytimes.com/2010/01/13/eh/>
With the above in mind, consider the Trudeau government's bold talk in early 2025 about "dollar for dollar" tariffs <https://www.theguardian.com/world/video/2025/mar/12/dollar-f...>. How that would devastate an economy 8% the size of the US's was, of course, unsaid, because vibes are all it takes to fight Trump fascism, amirite fellow Canadians? Of course Trudeau's replacement Carney is not stupid like Trudeau, so abandoned that policy during the campaign <https://www.wsj.com/livecoverage/stock-market-trump-tariffs-...>. But still.
His topic is NA as a large single economy, and on that basis auto production (in both employment and GDP) has grown and productivity has grown since NAFTA was signed (and has gyrated wildly as well due to idiotic auto industry management, which is unrelated to NAFTA).
The jobs had indeed moved around to the detriment of regions in the US, Canada and to a lesser extent Mexico. But if you look at the US alone, you see that process happening as well (e.g. aircraft and auto mfg moving to the non-unionized south). It’s economically superior to integrate these three countries and beneficial overall: but the US has been the laggard in helping those regions who have suffered.
NAFTA is also a condemning example for the EU: a free trade region based on propinquity where different languages and systems are used yet the free trade works.
A Michigan auto worker may not be thrilled by jobs moving to Tennessee, but a) at least his countrymen will work those jobs, and b) he can move to Tennessee. His job moving to Ontario does not have these virtues, and no amount of repeating
> It’s economically superior to integrate these three countries and beneficial overall
is going to change this.
But I think you’re accidentally arguing a position it doesn’t sound like you support. Macroeconomics has moved into an abstract region where “homo economicus” is their spherical cow, and actual human behaviour is left by the wayside. Straight up utilitarianism is used to calculate benefit. From your comments I believe you consider that bad — and I do too.
But you ignored the part of my comment that addressed that when you wrote:
> His job moving to Ontario does not have these virtues, and no amount of repeating
> > It’s economically superior to integrate these three countries and beneficial overall
> is going to change this.
My wife is taking some medicine that makes her throw up so she takes another one to counteract that. I said that the US chronically fails to attempt the equivalent, instead assuming that humans are fungible equivalents and that the magic hand of the market would take care of things.
Even where attempts are made to ameliorate economic impact they usually involve trying to tech 50 yo coal miners to code. The actual human nature of humans is ignored.
Whet I didn’t like about your comment is that you deny the global (national in this case) benefit — also received by most of the dislocated — for the short term benefit of the few. That’s is just as abstract, and is like arguing that the automobile should have been suppressed because of all the people whose job was to drive horses.
The right hung to do is to address the disadvantaged, as humans. But that attitude (in more than just macroeconomics policy) is considered anti-American and “socialist”