Canadian Lawyer InHouse

33 CANADIANLAWYERMAG.COM/INHOUSE MARCH 2018 However, Canadian manufacturing busi- nesses are being prudent in asking in-house counsel to present them with worst-case scenarios and to suggest alternate supply and trade options, should the long-standing deal fall through. Canadian lawyers specializing in interna - tional trade say that interest in NAFTA has been ramping up as the negotiation deadline approaches. They've not only been briefing in-house counsel but making presentations to senior managers and preparing reports on the subject to boards of directors. That's no surprise. Many manufacturing companies have known only a trade envi- ronment under NAFTA and they're now questioning their most basic assumptions about trade. Their concerns focus primar- ily on goods travelling between the U.S. and Canada — even if the U.S. withdraws entirely from NAFTA, the free trade pact between Mexico and Canada still stands. "We've certainly heard from clients who are contemplating the effects of a NAFTA withdrawal, and they're looking to us for advice on how to negotiate a different trade landscape," says Greg Kanargelidis, partner at Blake Cassels & Graydon LLP in To- ronto and the practice group leader of its international trade group. "The first thing they're doing is calculating the benefits they're receiving under NAFTA that would go away. Are they sending goods from Can - ada to the U.S. on a preferential basis? Are the goods coming from the U.S. to Canada or is it both ways? For example, automobiles that don't qualify for NAFTA and imported into Canada are dutiable at 6.1 per cent, but a vehicle imported into the U.S. is dutiable at 2.5 per cent. They need to know if the increased duty would represent a business barrier for them." If the U.S. withdraws from NAFTA en - tirely, tariffs wouldn't appear out of thin air. Canada and the U.S. would continue to offer each other the reciprocal benefits of "most favoured nation" status as members of the World Trade Organization. Under that ar - rangement, many goods would continue to cross the border without imposition of duty. "However, if NAFTA no longer applies, these companies are already looking for alter - nate sources of raw materials that they import into Canada or other places where they might manufacture goods, rather than the U.S., to get a duty preference," says Kanargelidis. "Many are looking for other free trade part - ners and the Canada-European Union Com- prehensive Economic and Trade Agreement, which entered into force on a provisional ba- sis on Sept. 21, 2017, is a good example." Canadians may also benefit from a re- vamped Trans-Pacific Partnership trade deal, where 11 member countries continue to ne- gotiate following the withdrawal of the U.S. A thorough review of bi-lateral and more comprehensive trade treaties may be nec- essary to determine the best way to move products without attracting duties. But alter- ing the supply chain may also lead to unfore- seen outcomes unless legal and supply chain experts work together to identify risks and I n d u s t r y S p o t l i g h t Visit gpllm.law.utoronto.ca Questions? gpllm@utoronto.ca Apply today. ONE YEAR | PART-TIME | FOR LAWYERS AND BUSINESS LEADERS Master the Law. Canada's leading law school offers a graduate degree in four unique streams: Business Law Canadian Law in a Global Context Innovation, Law and Technology Law of Leadership ntitled-5 1 2017-08-17 3:02 PM

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