VANCOUVER (NEWS 1130) – Cross-border shopping is now being used by the US President to call NAFTA one of the worst trade deals ever made.
Donald Trump made the comments while addressing some small business owners in Washington.
“People living in Canada coming into the United States and smuggling things back into Canada because the tariffs are so massive. The tariffs to get common items back into Canada are so high, that they have to smuggle them in,” Trump said.
But James Brander with UBC’s Sauder School of Business says that’s not true.
“The answer is, that is extremely small. When you think about the size of the border and the amount of trade there is across that border, that border probably has less smuggling than any border in the world,” he says.
“The level of smuggling it’s just trivial across that border to the extent that I admit the police basically don’t worry about it because it’s so minor. That’s apart from drug smuggling which of course is an issue.”
But he admits Trump has a point when it comes to the export of US dairy products to Canada.
“Two-hundred and 75 per cent tariff, so basically, that’s a barrier without saying it’s a barrier.”
Brander admits a fair amount of drug smuggling is done across the border, but that has nothing to do with NAFTA.