Economy

The fleur de lis isn’t the only thing that Louisville has in common with the Canadian province of Quebec. We also share a lot of aluminum. Jean-Claude Lauzon, the Quebec Delegate General visited Louisville on Thursday. One reason he came to Louisville was to talk about trade with Gov. Matt Bevin, as well as leaders in the aluminum industry.

The United States is Canada’s largest trading partner. More than 70 percent of Canadian exports come to the U.S. A big part of that trade between Quebec and Kentucky is equipment for transportation and aluminum.

Lauzon called his visit to Kentucky a “mini aluminum summit.”

“Quebec is a very important producer of aluminum in the world,” says Lauzon. “And we produce clean aluminum.”

The pliable metal isn’t just used for soda cans or to wrap up leftovers. Aluminum, which doesn’t rust, is also used in cars, jet engines and ships. The element is an important material for Kentucky’s auto and aerospace industries.

Earlier this year, Braidy Industries Inc. announced it would build a $1.3 billion plant in Eastern Kentucky, an area affected by the loss of coal mining jobs. The company would employ 550 people. Lauzon said he’s in talks with Braidy on how to acquire aluminum from Quebec.

A ‘fall guy’?

Because of the North American Free Trade Agreement, or NAFTA, trade is easily facilitated between the U.S. and Canada. Implemented in 1994, NAFTA got rid of most tariffs on trade between the U.S., Canada and Mexico. Prior to this, the U.S. already had a free trade agreement with Canada, which materialized in 1989. What made NAFTA unique was the integration of Mexico, whose economy was not as developed as the U.S or Canadian economies.

NAFTA is now up for renegotiation. Lauzon attended early talks last week in Washington. Some critics of NAFTA — including President Trump — blame the treaty for taking away U.S. jobs and moving them to Mexico, particularly in manufacturing.

“NAFTA’s kind of the ‘fall guy” in a lot of our arguments in the United States,” said Christina Fattore, associate professor of political science at West Virginia University. 

“When we talk about the industrial change that was happening in America it was happening easily 10 years before NAFTA was signed. Probably going back before that.”

At a rally this week in Phoenix, Trump said he thinks we’d “probably end up terminating NAFTA at some point.” Advocates of the deal, such as Quebec Delegate General Jean-Claude Lauzon, aren’t so worried about NAFTA disappearing given the dependent trade relationship of the three countries.

Gains for the U.S. include cheaper goods for consumers. Mexico has made gains from the deal including more auto manufacturing jobs and an increase in farm exports. But the poverty rate in that country is the same as it was in 1994, with unemployment rising as well. Some say, however, that domestic problems such as the devaluation of the peso contributed to Mexico’s slower economic growth compared to the U.S. and Canada.

“When our administration talks about how this is the worst trade deal that’s been negotiated,” said Fattore at West Virginia University, “we’re not the losers in NAFTA. I would say that Mexico hasn’t gained as much from NAFTA as it originally thought it would.”

Roxanne Scott covers the economy for WFPL News.