While not entirely unexpected, NAFTA negotiations have not proceeded smoothly. The rocky road is leading analysts to speculate about the consequences of failure, including the potential for a dramatic drop in the Canadian dollar.
While posturing and antagonism has been the hallmark of the NAFTA negotiations thus far, a Yahoo Finance Canada article featuring Ivey's Isaac Holloway talks about one fundamental economic law.
“If we think of the economic law of gravity, you’re going to trade more with countries that are big and you’re going to trade more with countries that are close,” Holloway says. “And (that law) is difficult to break – especially for a province like Ontario which would have so far to go to have someone like China replace its trade relationship with the States.”
