Canada threat­ens to scrap arms deal as trade talks get off to rough start


The Nation - - WORLD -

CANA­DIAN Prime Min­is­ter Justin Trudeau has threat­ened to can­cel a ma­jor arms buy from the US over a tar­iffs row, as talks on a North Amer­i­can free trade deal got off to a rocky start.

Ot­tawa was set to pur­chase 18 new Su­per Hor­nets fighter jets from Boe­ing un­til the Amer­i­can aero­space firm suc­cess­fully pe­ti­tioned the Trump ad­min­is­tra­tion to im­pose anti- dump­ing penal­ties on its Cana­dian ri­val Bom­bardier over planes sold in the US mar­ket.

“I high­lighted to the pres­i­dent how we dis­agreed, ve­he­mently, with Com­merce’s de­ci­sion to bring in coun­ter­vail­ing and anti-dump­ing du­ties against Bom­bardier,” Trudeau told re­porters fol­low­ing talks with US Pres­i­dent Don­ald Trump.

Fur­ther, “at­tempts by Boe­ing to put tens of thou­sands of aero­space work­ers out of work across Canada is not some­thing we look on pos­i­tively. And I cer­tainly men­tioned that this was a block to us pur­chas­ing any, mak­ing any mil­i­tary pro­cure­ments from Boe­ing”.

His com­ments came after Trump had pre­viewed “a tough ne­go­ti­a­tion” over NAFTA – a quar­ter-cen­tu­ryyear-old trade pact that also in­cludes Mexico.

Trump has made re­vamp­ing the pact and re­duc­ing US trade deficits a core pil­lar of his elec­tion cam­paign, but has not set out ex­actly what changes he would like to make.

“If we can’t make a deal, it’ll be ter­mi­nated and that will be fine,” Trump said, us­ing his typ­i­cal bare-knuckle ap­proach to top level diplo­macy. “It has to be fair to both coun­tries.”

As the pair sat down, trade ne­go­tia­tors hud­dled nearby in the Wash­ing­ton sub­urb of Ar­ling­ton, Vir­ginia for an­other round of talks, com­pli­cated by the aero­space spat.

The US ad­min­is­tra­tion, hav­ing found Bom­bardier guilty of re­ceiv­ing state sub­si­dies, slapped a 220 per­cent coun­ter­vail­ing duty on Bom­bardier CS100 and CS300 aircraft im­ported into the United States.

US Trade Rep­re­sen­ta­tive Robert Lighthizer an­nounced that talks had been extended by 48 hours and would con­clude on Tues­day.

He and Mex­i­can Econ­omy Min­is­ter Ilde­fonso Gua­jardo Vil­lar­real and Cana­dian For­eign Min­is­ter Chrys­tia Free­land are ex­pected to make a joint ap­pear­ance.

“Thus far, we have made good progress, and I look for­ward to sev­eral days of hard work,” Lighthizer said.

The United States takes in three quar­ters of Cana­dian exports, but trade re­la­tions have been strained since Trump’s in­au­gu­ra­tion ear­lier this year. With a na­tion­al­ist eco­nomic agenda, Trump has de­nounced the agree­ment as a job de­stroyer and a “disas­ter” for the United States, vow­ing to re­verse off­shoring by rene­go­ti­at­ing the treaty.

Fol­low­ing the most re­cent round in Ot­tawa last month, ne­go­tia­tors said they had made progress on sub­jects such as telecom­mu­ni­ca­tions, com­pe­ti­tion pol­icy, dig­i­tal trade, reg­u­la­tion and cus­toms and trade fa­cil­i­ta­tion.

Ne­go­tia­tors have com­pleted talks on NAFTA pro­vi­sions re­lat­ing to small and medium en­ter­prises as well as com­pe­ti­tion, Lighthizer’s of­fice said.

The up­dated pro­vi­sions on com­pe­ti­tion will al­low for more “pro­ce­dural fair­ness” in the en­force­ment of com­pe­ti­tion law, the state­ment said.

A ma­jor stick­ing point has been $64 bil­lion (Bt2.1 tril­lion) US trade deficit with Mexico, which Wash­ing­ton wants to re­duce or elim­i­nate.

IMF Eco­nomic Coun­sel­lor Mau­rice Ob­st­feld warned Tues­day that all three NAFTA coun­tries faced eco­nomic con­se­quences if the out­come of the talks ended up dis­rupt­ing trade re­la­tions.

Cana­dian Prime Min­is­ter Justin Trudeau , left, met with US Pres­i­dent Don­ald Trump at the White House to dis­cuss the trade deal.

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