- in November 2018, Canada, US, and Mexico signed the United States—Mexico—Canada agreement (USMCA). Once
ratified by all the three countries, the USMCA will replace the North America Free Trade Agreement (NAFTA) which came
into effect in January 1994. The renegotiation between the US and Canada was contentious. Negotiators need to
understand the key elements of the trade relationship between the two countries, along with the within country stakes of
different provinces and states.
Suppose that, in September 2018, you were asked to write a document to inform Canadian negotiators in order to
maximize Canadian welfare from reaching a trade deat with the US.
Please consider the following:
Why is the trade relationship important to Canada?
Why is the trade relationship important to the US?
What are the key industries and contentious issues?
What is the impact of the contentious issues on different provinces in Canada?
What is the impact of the contentious issues on different states in the US?
Your recommendation to the Canadian government regarding general trade policies.
2.The 2018 US-China trade war has brought great uncertainty to the world economy. The two countries are engaging in
trade talks in January 2019. Suppose that you are asked to write a report to summarize the situation and make
recommendations. You can pick the perspective of the Chinese government, the US government. or a neutral third-
country organization.
Consider the following:
How did the two countries come into this situation?
What are the strengths and weaknesses of the two countries in the current trade talks?
What would happen if the trade war continues to explode?
What should be done?
Sample Solution
