Calgary Herald

Canada grimaces amid hail of U.S. trade blows

- DAVID LJUNGGREN

After Prime Minister Justin Trudeau held a cordial first meeting with U.S. President Joe Biden in February, marking an end to years of battles with the Donald Trump administra­tion, a relieved Canadian official said, “We feel we are off to the races here.”

But old trade disputes that flared up during the Donald Trump years show no signs of fading. Last month Washington announced plans to double duties on imports of Canadian lumber and requested a dispute panel on Canada's dairy import quotas. Biden is also promising a Buy America procuremen­t plan that could hurt Canadian exporters.

The timing is awkward for Trudeau ahead of a likely election later this year, especially since his ruling centre-left Liberals have traditiona­lly enjoyed better relationsh­ips with the Democrats than the opposition Conservati­ve party.

“Canada's economic relationsh­ip with the United States is breaking down rapidly,” said Candice Bergen, deputy Conservati­ve leader, noting that “for months the Liberals have been telling us how much they agree with the Americans.”

The Trump era was exhausting for Canada, which sends 75 per cent of its goods exports to the United States. At one point Trump called Trudeau “dishonest and weak” and threatened to tear up the North American Free Trade Agreement unless it could be renegotiat­ed.

But the new-found cordial atmosphere has not blunted a dispute over U.S. allegation­s Canada is unfairly limiting imports of dairy products. Another contentiou­s issue is Canadian softwood lumber exports, which U.S. producers have long complained are unfairly subsidized.

On lumber, “the United States has not been willing to reach an agreement; We are,” Natural Resources Minister Seamus O'regan tersely told legislator­s last month.

Signs of trouble emerged early. Within hours of taking power, Biden revoked the permit needed to build the Keystone XL oil pipeline, killing an $8-billion project that would have brought Canadian crude to U.S. markets.

Canadian officials now want the White House to help solve another energy challenge in Michigan, where the governor wants to close a pipeline operated by Canada's Enbridge Inc. The Biden team has declined to intervene. Yet despite the recent unhappines­s, there are big difference­s between the two U.S. administra­tions, Canadian officials say. Biden, unlike Trump, is not threatenin­g to scrap continenta­l free trade. He has also not imposed tariffs on Canadian aluminum and steel on national security grounds.

Foreign Affairs Minister Marc Garneau played down suggestion­s of a rift.

“We can't eliminate all the different issues that are important for the Americans. We have to deal with them one by one,” he told a Montreal business audience this month.

“There is always going to be a bit of back and forth between our two nations.”

In private, however, Canadian officials are even blunter.

“The idea the Biden administra­tion is bad for us on trade is nonsense,” said one senior source with direct knowledge of government thinking.

“The Canada-u.s. trading relationsh­ip is largely open and free flowing.”

Chris Sands, head of the Canada Institute at the Washington-based Wilson Center, said the Canadian government had been too optimistic about the potential for cooperatio­n.

“I do think expectatio­ns ran ahead of the likely way that the Biden administra­tion would unfold ...”

The headaches show no signs of easing. Last Friday, Canada requested a dispute settlement panel to address U.S. tariffs on Canadian solar products.

“These tariffs are unwarrante­d and damaging,” complained Trade Minister Mary Ng.

The U.S. Trade Representa­tive's office did not directly address questions about increasing tensions.

“We have a close relationsh­ip with Canada and routinely collaborat­e on a range of topics,” said spokesman Adam Hodge.

 ?? CHRIS WATTIE/REUTERS FILES ?? Old Canada-u.s. trade disputes show no signs of easing. Dairy is one of the flare-ups since the U.S. requested a dispute panel on Canada's import quotas.
CHRIS WATTIE/REUTERS FILES Old Canada-u.s. trade disputes show no signs of easing. Dairy is one of the flare-ups since the U.S. requested a dispute panel on Canada's import quotas.
 ?? CHRIS WATTIE/REUTERS FILES ?? The U.S. plans to double duties on Canadian lumber. The Canada-u.s. trade relationsh­ip is seen as deteriorat­ing.
CHRIS WATTIE/REUTERS FILES The U.S. plans to double duties on Canadian lumber. The Canada-u.s. trade relationsh­ip is seen as deteriorat­ing.

Newspapers in English

Newspapers from Canada