Canada sides with Elizabeth Warren, over Trade Fight With Obama
President Barack Obama and Sen. Elizabeth Warren (D-Mass.) have been locked in a public feud over whether free trade agreements can be used to undermine the 2010 Wall Street reform law. On Wednesday, the Canadian government sided with Warren.
Canadian Finance Minister Joe Oliver gave a speech in New York arguing that the Volcker Rule -- a key tenet of the 2010 banking law -- violates the North American Free Trade Agreement. The move underscores Warren's warning that such deals, including the Trans-Pacific Partnership that Obama is currently negotiating, jeopardize financial reform.
The Volcker Rule bars banks operating in the U.S. from speculating in securities markets for their own profit -- a risky activity that can put taxpayers on the hook for big bailouts if the bank bets turn sour. But there are exceptions to the rule. For instance, banks are allowed to hold U.S. government debt in their own accounts.
But those same banks aren't allowed to trade in Canadian government debt. Oliver thinks that's a NAFTA violation. Although he didn't lay out his argument in detail on Wednesday, NAFTA, like the TPP, generally bans countries from discriminating against each other's financial services. NAFTA prohibits policies that limit cross-border trade in financial services and requires the U.S. to treat Canadian companies the same way that it treats U.S. companies.
http://www.huffingtonpost.com/2015/05/14/canada-volcker-rule_n_7285098.html
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