Canada-U.S. agreement possible if NAFTA fails, Trudeau says
Prime Minister Justin Trudeau said he would consider oneon-one talks with the U.S. on trade, if negotiations to update the North American Free Trade Agreement fail.
“We will always look at different opportunities,” Trudeau said Thursday in response to a question about a two-way U.S. trade deal at the Fortune Global Forum in China. “We’re ready for anything, when things come forward. The new administration has shown a willingness to disrupt the patterns of past behaviour and look for new models, and we’re willing to entertain next steps forward.”
The prime minister, who was in the southern Chinese city of Guangzhou to wrap up a five-day visit, said the 23-year-old NAFTA “needs to be updated” and warned that cancelling the pact would harm Canadians. His comments followed the unexpected breakdown in Canada’s efforts to launch free-trade talks with China, with officials saying the two sides would continue discussions.
While Trudeau reaffirmed his desire to save NAFTA, which underpins US$1.2 trillion of trade, his comments will likely fuel speculation that Canada is preparing to move ahead without Mexico. The remarks come just weeks after other members of the trans-Pacific Partnership criticized Canada for upending efforts to revive the trade pact without the U.S.
The Canadian government has repeatedly said it was committed to working with Mexico to renew NAFTA, but officials have sometimes signalled a willingness to consider a twoway pact of the kind U.S. President Donald Trump prefers. Trump has threatened to scrap NAFTA, if the other two signatories don’t accept proposals that the administration argues will reduce U.S. trade deficits.
“We’re still very confident in the kinds of support and response that we’ve gotten from friends, partners, colleagues in the U.S. who recognize that trade is a powerful driver of growth and benefit to citizens,” Trudeau said Thursday.
Canada and the U.S. had a bilateral trade deal that was superseded and suspended by NAFTA. Canada’s chief NAFTA negotiator told lawmakers this week that the old agreement would kick in again if NAFTA failed, although it would have to be re-implemented.
Starting talks with China could strengthen Trudeau’s hand in NAFTA negotiations, showing that the U.S.’s second-largest trading partner has other options. But Chinese concerns remain about the “progressive” trade provisions Canada insists must be part of any deal.
Another issue was the role of state-owned enterprises, Trudeau said later Thursday. In 2012, former PM Stephen Harper imposed restrictions on the acquisition of oilsands companies by SOEs after CNOOC Ltd. bought Nexen Inc., of Calgary. Trudeau said the Chinese government’s involvement in strategic industries was “characteristic of their approach.”