Canada begins the adjustment to life with Trump’s America
Morneau upbeat on bilateral trade, guarded on TPP and carbon tax
Finance Minister Bill Morneau says the Canadian government will work to ensure incoming U.S. President Donald Trump understands — and potentially even expands — the existing trading relationship between Canada and the United States.
Trump’s antipathy to the current NAFTA agreement between Canada, the U.S. and Mexico was a hallmark of his presidential candidacy. Yet Trump’s vitriol was exclusively directed toward Mexico, not Canada. Trade lawyers have suggested that if the U.S. exits NAFTA, the predecessor Free Trade Agreement between Canada and the U.S. could be revived.
Speaking to the National Post editorial board on Thursday, Morneau said Canada’s federal government will be making the case to the new administration that the U.S. benefits from trade with Canada every day. Morneau said the statistics speak to the depth of the relationship: Canada is the No. 1 trading partner for 35 U.S. states; Canada and the U.S. exchange $2 billion in trade each day and $750 billion each year; and, he said, nine million Americans rely on trade with Canada for their jobs.
“We’re going to continue to have a strong relationship,” Morneau said.
While he refused to comment on what a Trump administration might do on trade, he said Canada’s goal is to improve its bilateral relationship with the U.S. “We think there’s huge advantage for the United States in having a positive trading relationship with Canada.”
Trump has vowed to ease restrictions on the U.S. fossil fuel industry and cancel payments that had been committed to UN climate control patterns. He’s also promised significant tax breaks.
At the same time, Prime Minister Justin Trudeau has insisted all provinces introduce a carbon tax on greenhouse gas emissions. “You cannot separate a strong economy from a sustainable environment,” Trudeau told reporters in Sydney, N.S., on Thursday.
Morneau was asked if the federal Liberal government would reconsider its commitment to carbon taxes if the Trump administration puts policies in place that would give the U.S. fossil fuel industry at a competitive advantage over Canadian producers.
The finance minister reiterated that he won’t speculate on what Trump’s administration might do. “Whenever the question begins with an ‘if,’ to me it’s a speculative question.”
He said the carbon tax regime reflects the Liberal government’s concerns for both the economy and the environment. The government is trying to introduce a “pan-Canadian” approach on carbon pricing to address climate change, he said. He added the government is trying to do this in a “responsible way” that tries to grow the economy.
“We’re going to consider the fact that we need to think about both these two issues at the same time. We think that’s the responsible way for us to move forward,” he said. “We’re not going to speculate on where we may or may not be down the road.”
Trump has been clear that he opposes the 12-member Trans-Pacific Partnership trade agreement, a tentative deal that still requires ratification by Canada’s Parliament and the U.S. government. Some wonder whether outgoing U.S. President Barack Obama will urge Congress to approve the deal before he leaves office in January.
Morneau was asked whether the Liberal government will act to approve the deal, perhaps as a means to encourage the U.S. government to ratify. He said the Canadian government has been consulting Canadians on the deal. But he refused to speculate on whether Obama will push the TPP forward in the final days of his administration.
“We want to make sure that people understand clearly the benefits and challenges of TPP. We’re going to keep on that path,” Morneau said.