National Post (National Edition)
President Trump on DAY ONE: No Trans-Pacific trade pact and no lemons from Argentina. And NAFTA?
Canada might consider bilateral talks with U.S., leaving Mexico in the cold
OTTAWA • Canada and the U.S. are signalling most of the pain from reworking NAFTA will hit Mexico, with an adviser to Donald Trump flying to Calgary to tell Justin Trudeau’s team that commerce is balanced and running smoothly north of the border.
As Trudeau’s cabinet gathered at a Calgary retreat to weigh Trump’s impact, Canada’s ambassador to the U.S. said he would consider bilateral measures with the U.S. in talks about the North American Free Trade Agreement.
On Monday, Trump abruptly ended a decades-old U.S. tilt toward free trade by signing an executive order to withdraw from an Asia-Pacific accord that was never ratified, and promising to renegotiate NAFTA.
“Great thing for the American worker, what we just did,” Trump said after signing an order withdrawing the U.S. from the Trans-Pacific Partnership accord with 11 other nations.
And in a move signalling the importance of trade and the “America First” message, one of the first actions for the Trump administration Monday was to delay implementation of a rule allowing Argentine farmers to export lemons to the U.S. The move followed a decade of talks and put into doubt negotiations between the two countries.
Trump did not sign any actions to direct a renegotiation of the NAFTA accord with Mexico and Canada, yet he said on Sunday he would begin talks on modifying the pact.
TRADE BETWEEN U.S. AND CANADA IS REALLY VERY MUCH IN BALANCE.
“We’ve been talking about this a long time,” Trump said.
David MacNaughton, Trudeau’s ambassador in Washington, said upon arrival in Calgary that his focus was on avoiding Canada becoming “collateral damage” in trade actions aimed at China and Mexico.
“We will co-operate on trilateral matters when it’s in our interest and we’ll be looking to do things that are in our interest bilaterally also.
“Some of them may be within NAFTA, some may not be,” he said Sunday night.
A top adviser to Trump said that Canada shouldn’t fear the new president on trade issues, while federal cabinet ministers expressed calm in the face of intense protectionist sentiment from the new administration.
Stephen Schwarzman, who met with Trudeau and his cabinet in Calgary Monday morning, also told reporters the prospects for the Keystone XL pipeline were looking up and Canadian energy exports to the United States were unlikely to be hit with a new cross-border tax.
Schwarzman, a billionaire businessman who chairs Trump’s team of economic advisers, said the new administration has an “unusually positive view” of Canada.
“There may be some modifications but basically, things should go well for Canada in terms of any discussions with the United States,” he told reporters at the Fairmont Palliser hotel.
“Trade between the U.S. and Canada is really very much in balance and is a model for the way that trade relations should be.”
The focal point of the Liberal cabinet’s two-day retreat is dealing with Trump.
Natural Resources Minister Jim Carr, who was in Washington D.C. last week for Trump’s inauguration, believes discussions with the new American government were going well.
He said there was no talk of a cross-border tax on energy exports when he was in the U.S.
“People realize that the energy economy between Canada and the U.S. is very much integrated,” Carr told reporters.
“I think they’re receptive to that argument.”
Canada is the top buyer of U.S. goods overall and the top buyer for 35 individual states, a detail Trudeau emphasized to the president in a call Saturday.
What Canadians fear is that any tariffs or other measures applied broadly will sideswipe them.
About 70 per cent of Canadian trade is with the United States.
Trudeau talked with Mexican President Enrique Pena Nieto on Sunday, releasing a short summary afterward saying they “spoke about the importance of the Canada-Mexico bilateral relationship, and of the trilateral North American partnership.”
Trudeau has prepared for the Trump era by promoting his trade minister, Chrystia Freeland, to serve as foreign minister and his main liaison for talks with Trump.
Freeland said Canada has a strong relationship with Mexico and is happy to be part of NAFTA.
“But of course our relationship with the United States is primarily a bilateral relationship, and I think Canadians know and understand that.”