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When Canadian Consul General Nadia Theodore arrived last year, she hit the ground running.
A trade expert who has spent a lot of time negotiating on Canada’s behalf in major trade agreements, she was appointed to the Southeast U.S. just as NAFTA was being put back on the table. (Her Mexican counterpart jokes they’ve spoken together so often they should now have a Broadway show.)
Governors in a region where Canada is the top export market for just about every state know that interaction with her country is important, she said, but not everyone understands “intricacies of the supply chain.”
“I found that people understood that a little less, but petit à petit, as we say in Canada,” Ms. Theodore said during a panel discussion on “Trade Turbulence” hosted by the Cumming-Forsyth Chamber of Commerce in partnership with Global Atlanta.
A rapt audience as @theodore_nadia gets “behind the headlines” on trade turbulence @cfccocga and sounds an optimistic note on NAFTA: “We’re always ready to conclude a good deal that works for all three countries.” #FoCo pic.twitter.com/hbT85rMM5C
— Canada In Atlanta (@CanCGAtlanta) April 24, 2018
Bit by bit, she’s been making the case to state legislators, the business community and the general public that the integration NAFTA has fostered over 24 years should be preserved even as the pact is updated for the 21st century.
Meanwhile, NAFTA’s future has been up for grabs, with President Donald Trump repeatedly threatening to withdraw from a deal proponents say has created an unrivaled regional economy based on interdependent supply chains.
“When you look at Canada, the United States and Mexico as a bloc vis-a-vis the rest of the world, we compete better than any other region,” Ms. Theodore said.
Last week seems to have brought a breakthrough in the talks, with trade ministers from all three countries extending meetings in Washington as they sought to finalize an updated deal.
One key signal of progress has been the emergence of “creative” proposals on rules of origin for automobiles, a major sticking point in the talks thus far, Ms. Theodore said.
“In my opinion it is a nut that needs to get cracked for us to get to the finish line,” she said.
Many questions still remain, but it does seem like the question of NAFTA’s existence overall has been largely put to rest, allaying a primary source of uncertainty for companies, Ms. Theodore said.
Diane Alleva Cáceres, founder and CEO at Market Access International, said small and medium-sized entities don’t have luxury of wringing their hands too much.
They’re concerned about tariffs, but they also have to worry about more pressing day-to-day factors like exchange rates, working capital and access to talent.
“Perhaps to a certain extent we take NAFTA for granted because it’s been in place for so long. It has enabled so many companies in various industries to become competitive that it’s routine,” she said, noting that the Tax Cuts and Jobs Act might be an even bigger source of uncertainty to wrestle with.
The NAFTA talks have been part of a larger “America First” trade framework that has rankled some traditional trading partners and allies. Mr. Trump has instituted new steel and aluminum tariffs, temporarily exempting some allies, and has ratcheted up threats of tariffs on China.
In light of these changes, the view from Germany is getting a bit more dim, said Andreas Boedenauer, director of business development at Actemium INP USA, an engineering consultancy with an office near the Siemens plant in Alpharetta.
One German client decided to ramp up production in China after failing to get visas for its executives in the U.S. Many with existing plants in the U.S. are hedging their bets by setting up new operations in Mexico, which has affordable engineering talent.
“That’s the reason we have an office in Toronto, one in Queretaro, Mexico, and one in Atlanta,” said Mr. Boedenauer, whose company helps automotive, power and metals suppliers (among others) set up and staff up new factories.
Ms. Cáceres said many larger companies are reviewing their region-wide strategies, and she would know, given that she’s helped manage the business-to-business portion annual meeting of the Southeast U.S.-Canadian Provinces Alliance over the past decade or so.
Ms. Cáceres is also a main organizer of World Trade Day, the May 4 summit held by the World Trade Center Atlanta which counts Ms. Theodore among it speakers and the Cumming-Forsyth Chamber as a sponsor. On tap will be discussions about the changing geopolitical landscape and how innovation plays out across the global economy.
Mary Waters, deputy commissioner for trade for the Georgia Department of Economic Development, said in keynoting the Cumming-Forsyth Chamber event that “trade is complicated” but that her mission of supporting Georgia exports is straightforward: Exports create jobs and make local companies more resilient.
Georgia’s trade with Canada, its top export market, totaled more than $10 billion — much of it in machinery, vehicles and aerospace products, Ms. Waters said.
“Canada alone is responsible for 16 percent of all of our exports in the world,” she said, with Mexico bringing that proportion up to one-quarter.
Many of the top trading partners in Europe are also the biggest investor nations in Georgia, she said.
Mike Whitacre, a partner tax firm Frazier & Deeter LLC, gave a presentation on tax reform, which slashed the U.S. corporate rate from 35 to 21 percent but also has created some uncertainty for companies with international business.
Among the big changes are a deemed repatriation tax on earnings held overseas (15 percent on cash and 8 percent on non-cash assets) and new treatment of income generated overseas by intellectual property rather than tangible business investment.
Many European companies invested in the U.S. through subsidiaries are reevaluating their corporate structures in light of the changes, Mr. Whitacre said.