Lower U.S. business taxes, uncertainty over NAFTA complicate Trudeau's investment pitch in Davos

Lower U.S. business taxes, uncertainty over NAFTA complicate Trudeau's investment pitch in Davos
From CBC - January 22, 2018

One of Canada's central aims at this year's World Economic Forum is to convince global business leaders that Canada is still an attractive place to invest.

It is a challenge made all the more difficult because of the uncertainties posed by ongoing NAFTA negotiations and recent cuts to U.S. corporate and business rates that threaten Canada's competitive advantages.

Prime Minister Justin Trudeau and a bevy of top cabinet ministers, including the finance and foreign affairs ministers,fly to Davoson Monday, where political leaders, business elite, non-governmental organizations and even some celebrities meet and mingle with the goal of finding solutions to some of the world's biggest challenges.

"Davos is not an internationally sanctioned body of economic decision makers, like the IMF or World Bank," said Laura Dawson, director of the Canada Institute at the Wilson Center in Washington, D.C.

"This is kind of like a trade show where folks whoare in business and economics, anda lot of world leaders, go to see and be seen."

The theme of this year's meeting is "Creating a Shared Future in a Fractured World."

The Trump factor

Part of that fracturing is blamed on rising populism and protectionism, most notably exemplifiedby U.S. President Donald Trump, who surprised many by announcing he will attend theglobalist forum this year. It's the first time a sittingAmerican president is going since Bill Clinton wentin 2000.

"It's a real departure for Trump, but in this case I think he wants to take a victory lap for what he's done on tax reform, for the evidence of growth in the stock market, employment numbers. He wants to take credit for that," said Dawson.

It's because ofTrump that Canada has to work so hard to remind investors that Canada is open for business. Ongoing tumultuous NAFTAtalks have created so much uncertainty that businesses have become wary of investing in Canada, something the governor of the Bank of Canada said last week is one of the major issues "keeping [him] up at night."

NAFTA aside,U.S. lawmakers passed a bill in December that slashedcorporate and other taxes south of the border, making the U.S. much more competitive with Canada.

"When it comes to attracting foreign direct investment, we need to demonstrate confidence in the Canadian economy," said one senior government official. "We need to show why it's a good place to invest."

Not giving up on Asia

Gender-based policy making


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