Morneau considers Plan B on trade talks
TORONTO Federal finance minister Bill Morneau suggested Thursday his department is running internal scenarios that include what would happen if NAFTA talks were to falter. But he said the federal government remains heavily focused on “Plan A,” which is strengthening the tri-country North American Free Trade Agreement between Canada, the United States, and Mexico.
“My job … is to think about how we can ensure the economy is successful in the long term, so we do look at the economic impacts of any NAFTA discussion in order both (to determine) how do we improve and also to think about the challenges that the long discussion might present,” Morneau said following a meeting in Toronto with his counterpart from Mexico, José Antonio González Anaya.
Morneau said model scenarios are “a confidential part” of Ottawa’s NAFTA analysis and declined to discuss the potential impact on the economy or any specific sector if the trade agreement were to fall apart. He stressed that the focus remains on strengthening the deal.
The five rounds of talks, which pick up again next week in Montreal, have been contentious due to some extreme rhetoric from U.S. President Donald Trump.
“The job of the Department of Finance is to run models on everything … so we have an understanding of sector-by-sector impact on how we can make a positive impact on our economy and jobs, and that will continue to be our approach to this analysis,” Morneau said. “Be prepared, be ready to have constructive discussions, and understand the impacts, potentially both positive and challenging.”
He added that the federal government remains “very focused on Plan A, on making sure that NAFTA continues to provide great jobs that it’s done for the last generation or two.”
On Wednesday, the Bank of Canada’s senior deputy governor, Carolyn Wilkins, warned that the country’s economic growth outlook “remains clouded by uncertainty” related to NAFTA’s future. Her remarks came even as the BoC raised the interest rate to 1.25 per cent.