Topeka A senior Canadian diplomat was in Lawrence this week speaking to business and university audiences about the importance of maintaining the North American Free Trade Agreement.
Stephane Lessard, the Canadian consul general who oversees Canadian diplomatic efforts over a five-state region in the Midwest and Mountain West, including Kansas, said a collapse of that treaty could have a profound impact on the American economy, particularly the economy of Kansas.
In an interview with the Journal-World, Lessard said a U.S. withdrawal from the 1994 trade pact could result in a return to the era when both the United States and Canada imposed tariffs on each other's exports.
"For example, two of the main sectors where we have trade between Canada and Kansas are automotive parts as well as agriculture," he said. "And in those cases, the tariffs would be pretty significant. So any Kansas exports to Canada would be subject to those tariffs, and that could make those products noncompetitive in the Canadian market."
The timing of Lessard's visit was no coincidence. President Donald Trump has threatened to pull out of the 24-year-old NAFTA if Canada and Mexico won't agree to renegotiated terms that are more favorable to the United States.
Negotiators for the three countries are scheduled to meet in Montreal later this month for the sixth, out of seven, round of talks aimed at hammering out a deal.
So far, Lessard said, most of the easier issues in the talks have been all but resolved. But he said a few thornier issues remain, and the upcoming talks in Montreal could be critical as the countries approach an agreed-to deadline at the end of March.
"Because of the time frame that we’re talking about, there needs to be a resolution of those very shortly if there is to be progress," he said.
According to reports, one of the thorniest of issues concerns auto parts manufacturing, which could have a big impact on some businesses in Kansas, particularly in the Kansas City metropolitan area, which IndustryWeek ranked as the nation's second largest auto hub in 2015.
For cars sold in the U.S., the Trump administration wants to require that 85 percent of the parts in those vehicles be made in North America, up from 62.5 percent. And of that 85 percent, the administration wants at least half to be made in the United States. There is currently no requirement governing content from individual NAFTA members.
Lessard said that would disrupt many of the supply chains that have been built up between auto manufacturers in the U.S. and Canada since the signing of NAFTA.
"That would start dismantling the way the industry is functioning, and the consequences of that for competitiveness of American car makers could be very significant," he said.
Overall, according to information he provided, Kansas sells about $2.1 billion worth of goods and services to Canada each year, and those exports help support roughly 84,100 jobs in the state.
Kansas also imports from Canada engines and turbines, aircraft parts, meats, plastics and optical, medical and precision instruments.
Kansas' top exports to Canada include aircraft, automobiles, animal feed, meats and agricultural machinery.
Lessard, whose job is based in Denver, administers consular affairs in a five-state region that includes Kansas, Colorado, Wyoming, Montana and Utah.
His visit to Kansas, where he also met with state government leaders and the Kansas Chamber of Commerce in Topeka, was an example of what is often called "public diplomacy," where diplomats try to take their message directly to targeted audiences in their host countries, including local business leaders and the news media, in hopes that they, in turn, can exert pressure on their own elected leaders.
With regard to NAFTA, that won't be a hard sell. Both U.S. senators from Kansas, Pat Roberts and Jerry Moran, have gone on record as recently as December expressing concerns that any major changes to the treaty could have a negative impact on the Kansas economy.