Mulroney optimistic over NAFTA talks
Renegotiating a deal to benefit Canada means being firm: Mulroney
The renegotiation of the North American Free Trade Agreement is being characterized by the government as analogous to the renovation of an old house.
Who better then to ask about the renovations than the man who built the house in the first place, even if he is of a different political stripe?
Former Progressive Conservative prime minister Brian Mulroney was back on Parliament Hill Thursday, a quarter of a century after leaving politics, briefing the Liberal cabinet committee on Canada-U.S. relations, ahead of the renegotiation demanded by the Trump administration.
Mulroney was invited not only because of his experience negotiating NAFTA in the 1990s but also because of his personal friendships with U.S. President Donald Trump and Commerce Secretary Wilbur Ross.
By all accounts, the 78-year-old former prime minister was in vintage form, noting that his picture had mysteriously disappeared from the cabinet room.
Infrastructure Minister Amarjeet Sohi used the opportunity to thank Mulroney for the efforts his government made to extricate the then-student activist from an Indian jail in 1990, after spending 21 months in a cell, 18 in solitary confinement.
Mulroney, and his former chief of staff Derek Burney, told cabinet they believe the country is in for some rough negotiations this fall, but that Justin Trudeau has placed the country in an advantageous position with the president.
“The relationship appears excellent and I can say that because, after Mr. Trudeau met with (Donald Trump) in the White House, I had dinner with the president the following Friday, and that assessment comes right from him,” the former prime minister said in an interview after his meeting on Parliament Hill.
Mulroney told cabinet that personal contacts are the only way to get access and influence in Washington, and that Canada is in a good position to build on the relationships made during the prime minister’s visit.
He and Burney also emphasized the need for the Trudeau government to be firm and say “no” when it means no.
“No trade deal can be unilateral and no deal is better than a bad deal,” said Burney.
“In 1987, we threatened to walk out when we couldn’t get a binding dispute settlement agreement. The Americans thought we were bluffing, but we weren’t. We need to be constructive but hard-nosed.”
The National Post reported Saturday that the Liberal cabinet is set to consider retaliation against the Trump administration if it expands Buy American policies that threaten Canadian jobs — potentially by restricting U.S. goods such as iron and steel in infrastructure projects that include federal funding.
Mulroney cautioned against talk of retaliation in advance of the new administration embracing new legislation, such as the Buy American Improvement Act sponsored by the Congressional Steel Caucus.
“We’re far away from the notion of retaliation — there’s nothing on the table to warrant that, and I certainly urge people not to respond to this kind of stuff. The government should take its time and prepare for every contingency. But I think anyone speaking like that should cool their jets,” he said.
Mixed messages have emerged from Washington about how much focus will be on Canada in the upcoming negotiations. When Trudeau visited Trump, the president said NAFTA would merely be “tweaked.”
Since then, Ross has indicated a more comprehensive overhaul. “Change is coming,” he said, calling tough talk of a 35 per cent border tax from the president as “wonderful preconditioning” for negotiations.
Asked who is closer to the mark, Mulroney responded with a question of his own: “Who’s president? It’s not going to be a walk in the park, but it’s the largest trading arrangement in the history of the world.
“The basic document has not been touched since I signed it, so there are many things that people might want to look at.”
He dismissed the likelihood of a punitive border tax, pointing out it would have to work its way through the House Ways and Means committee and win support in the House of Representatives and the Senate.
“Those are very significant hurdles,” he said.
Trump signed an executive order Friday calling for a 90-day study of all the ways other countries use unfair anti-competitive practices against the U.S.
Canada was named as one of the 16 countries to be examined, but it has the smallest trade surplus on the list. Nor does it appear to be a perpetrator of practices the Americans will be looking to stamp out — currency misalignment, asymmetrical trade barriers; lack of enforcement or “inappropriate” trading behaviour.
Government officials suggest that much of the tough talk is geared toward Mexico and there are no indications the assurances they are receiving are not sincere.
The administration has indicated its desire to make changes to the independent dispute-settling mechanism, so that U.S. courts rather than quasi-judicial panels rule on disputes, and rules of origin guidelines, to raise the amount of North American content in goods shipped duty free from the current level of 62.5 per cent.
But Mulroney is cautiously optimistic about the outcome. “This is going to be a serious and demanding negotiation but, in the end, we will come up with a mutually satisfactory arrangement. Why? Because this is the most mutually beneficial trading arrangement in the world and it would be foolish not to ensure it continues.”