EXITING NAFTA UNWISE TARIFF TACTIC: EXPERT

Canada will take the harshest blows if U.S. President Donald Trump slaps heavy tariffs on foreign imports of steel and aluminum, but any temptation to suspend NAFTA talks in retaliation should be avoided, Canada’s former chief negotiator on the trade agreement said Friday.

Putting the NAFTA negotiations on hold pending a resolution of the dispute over steel tariffs would give the U.S. an excuse to wash its hands of the agreement altogether, said John Weekes, Canada’s former WTO ambassador and chief negotiator on the original deal.

“I think, quite frankly, we are on the brink of a trade war if Trump goes through with this,” Weekes said in an interview. “But we don’t want to make it easier for him to walk away from NAFTA and if we leave the table, that’s exactly what we’ ll do.”

Any hopes that Canada would be exempted from Trump’s proposed tariffs of 25 per cent on steel and 10 per cent on aluminum were derailed Friday by U.S. Commerce Secretary Wilbur Ross.

“Of the options that I presented, the president chose one — which was put broad tariffs on all products from all countries,” Ross said in interview on Bloomberg TV. “We have to deal with a global problem on a global basis.”

The threats from the United States prompted a sharp response yesterday from World Trade Organization director general Roberto Azevedo, who cautioned that “a trade war is in no one’s interests.”

“The WTO is clearly concerned at the announcement of U.S. plans for tariffs on steel and aluminum,” Azevedo said in a brief statement issued by the WTO. “The potential for escalation is real, as we have seen from the initial responses of others.”

Jerry Dias, head of Canadian private-sector union Unifor, said Trump’s latest gambit to push his “America First” strategy had immediately soured the NAFTA negotiations under way in Mexico City and infuriated the Canadian team.

“It is crystal clear to us that if Canada is not exempted from the U.S. tariffs on Tuesday, then Canada should walk away from the NAFTA table,” Dias told Reuters, likening the Trump administration to a “schoolyard bully.”

“Ultimately Canada’s going to have to start fighting fire with fire,” he said.

Foreign Affairs Minister Chrystia Freeland has said Canada will “take responsive measures to defend its trade interests and workers.”