Alberta braces for possible end of trade deal

CALGARY Alberta is trying to be ready in case of a potential United States withdrawal from NAFTA, Economic Development and Trade Minister Deron Bilous said Thursday.

At the Alberta Urban Municipalities Association annual convention, Bilous urged mayors and councillors from across the province to reach out to their counterparts south of the border to make the case for the importance of free trade.

Speaking to reporters later, Bilous said withdrawal by the U.S. is “a very possible reality” given the protectionist stance taken by U.S. President Donald Trump.

“We’re hoping they will stay at the table. NAFTA is a very critical trade agreement and we not only want to see it continue but Canada and Alberta’s position is that we want to reduce trade barriers as much as possible as opposed to putting up walls,” he said.

The United States is by far Alberta’s largest trading partner, with more than $88 billion in average annual exports to the south.

Talks between the U.S., Canada and Mexico on a revamped NAFTA have been tense.

The latest round of negotiations ended this week with little progress on major issues such as automobiles,

dairy and dispute resolution, with Canada and Mexico criticizing some American proposals as being intentionally unworkable and the U.S. expressing frustration at its two partners.

Federal Foreign Affairs Minister Chrystia Freeland said Canada’s approach is to “hope for the best, and prepare for the worst.”

Bilous said Alberta officials are present at negotiations — though not in the room for the trilateral talks — and the federal government is keeping the province wellapprised of the situation.

He said that a U.S. notice of withdrawal would require six months’ notice. If it went ahead, Canada and Mexico would remain in a trade relationship under NAFTA while Canada and the U.S. would revert to their original free trade agreement.

That would mean higher tariffs and out-of-date provisions in some areas, he said.

Bilous said a government working group that includes representatives from the manufacturing, agriculture, forestry and energy sectors is looking at these issues.

“We’re engaging them to look at what the impact would be of a NAFTA withdrawal from the U.S. and we’re building a strategy on what we can do should the U.S. decides to withdraw so we’re not caught flat-footed,” he said.