Be­hind the scenes at the G7 sum­mit

Meet­ings to fix trade rifts ended in ten­sion over Canada-U.S. re­la­tion­ship

Toronto Star - - NEWS - TONDA MACCHARLES

QUEBEC CITY— U.S. Pres­i­dent Don­ald Trump greeted Prime Min­is­ter Justin Trudeau warmly Fri­day morn­ing as he ar­rived at the G7. Although he’d tweeted grumpily the night be­fore that Trudeau was “so in­dig­nant” about Amer­i­can tar­iffs, Trump looked happy to see the prime min­is­ter. They shook hands and smiled for the cam­eras, as all eyes were on them.

Hours later, they sat down to­gether be­hind closed doors. Ac­cord­ing to a source with knowl­edge of their dis­cus­sions, Trump said: “Peo­ple for­get how close we are Justin, and I no­tice that they took a pic­ture of us smil­ing and talk­ing and the mar­ket went up 200 points.”

Trump would raise that anec­dote a cou­ple more times over the course of what was a piv­otal meet­ing, ac­cord­ing to an of­fi­cial. Asked what to make of that, the source said per­haps the Amer­i­can pres­i­dent liked to re­flect on his power. Whether mar­kets moved or not, Trump and Trudeau’s sit­down ex­change came af­ter a long after­noon of con­tentious talks on the econ­omy and trade among G7 lead­ers.

In the end they ap­peared to reach a frag­ile G7 con­sen­sus and U.S. agree­ment on a joint com­mu­niqué only to see that fall apart with Trump’s twotweet blast at Trudeau Satur­day night.

Here’s a look at what un­folded over the G7 sum­mit that formed a back­drop to that erup­tion, one that un­der­mined unity of the Western al­liance. Closer to home, there ap­pears lit­tle prospect of quick re­cov­ery of the sup­posed good­will be­tween Trump and Trudeau that is so cru­cial to re­solv­ing the tar­iff dis­pute and the stalled ne­go­ti­a­tions over NAFTA, the North Amer­i­can free trade pact.

Based on con­ver­sa­tions on back­ground and on-the-record talks with Cana­dian and other G7 del­e­ga­tion of­fi­cials over the past three days, the be­hind-thescenes dy­namic was a tense one. Com­ing into the sum­mit, Trump had al­ready an­gered al­lies with his de­ci­sion to slap tar­iffs on steel and alu­minum im­ports from some of Amer­ica’s key al­lies, in­clud­ing Canada.

At talks on the econ­omy Fri­day after­noon, one of­fi­cial from a Euro­pean G7 del­e­ga­tion said Trump aired a string of “griev­ances” about trade. The oth­ers re­sponded in kind, the of­fi­cial said. All lead­ers in their fi­nal news con­fer­ences ref­er­enced that after­noon’s trade talk as “frank” and di­rect.

U.K. Prime Min­is­ter Theresa May told re­porters that the other six lead­ers had ex­pressed their op­po­si­tion to Trump’s steel and alu­minum tar­iffs. “We had some dif­fi­cult con­ver­sa­tions and some strong de­bate.”

Ger­man Chan­cel­lor An­gela Merkel told Trump it was un­ac­cept­able that af­ter two gen­er­a­tions of al­liance where they had worked to in­te­grate their economies, Trump would sand­bag his G7 al­lies with steel and alu­minum tar­iffs “with­out talk­ing to any­body,” said one of­fi­cial. Ja­panese Prime Min­is­ter Shinzo Abe tack­led Trump’s threat­ened tar­iffs against the auto in­dus­try, ar­gu­ing Ja­panese cars are not a na­tional se­cu­rity threat to the U.S. Those fric­tions on trade con­tin­ued into the Fri­day evening bi­lat­eral meet­ing be­tween Trump and Trudeau, one that started off cor­dially.

As Cana­dian of­fi­cials tell it, Trudeau went over all of Canada’s ar­gu­ments in op­po­si­tion to Trump’s steel and alu­minum tar­iffs, even though the Cana­di­ans had the feel­ing the Amer­i­can team had al­ready “done some home­work about how the Cana­dian pub­lic had re­acted” to tar­iffs, and were sur­prised by the back­lash.

Trudeau told Trump di­rectly what he said in Amer­i­can tele­vi­sion in­ter­views the week be­fore: that Cana­di­ans felt Trump’s dec­la­ra­tion that Cana­dian steel and alu­minum is a na­tional se­cu­rity threat was “kind of in­sult­ing” — as Trudeau de­scribed it in his news con­fer­ence Sun­day.

Trump’s trade rep­re­sen­ta­tive, Robert Lighthizer, protested about Canada’s tar­iff markups on for­eign dairy im­ports.

“The Prime Min­is­ter said, ‘Look, here’s the essence of our trad­ing re­la­tion­ship. We sell you a lot of oil and en­ergy and you sell us a lot of food and man­u­fac­tured goods. It is a tril­lion-dol­lar re­la­tion­ship. We could pick any one of those things and ar­gue over the num­bers. But shouldn’t we be talk­ing about the re­la­tion­ship as a whole, which is an un­mit­i­gated pos­i­tive for both of us?’ ”

Cana­dian of­fi­cials be­lieved at the time Trump “got that.” They agreed to ac­cel­er­ate NAFTA talks, but there was no clear path as to the next steps with the tar­iffs in place.

Af­ter their meet­ing, Trump and Trudeau at­tended the G7 lead­ers work­ing din­ner on peace and se­cu­rity in the world, a topic where all lead­ers could find some com­mon ground.

Af­ter din­ner Fri­day night, the Amer­i­cans, led by Trump eco­nomic ad­viser Larry Kud­low, said they couldn’t agree to lan­guage that sup­ported the global rules-based trad­ing sys­tem be­cause they were try­ing to re­form the sys­tem, said a source, but agreed to a nod to the World Trade Or­ga­ni­za­tion. Trudeau ar­gued the two were linked.

The lead­ers went back and forth for up to an hour. The Amer­i­cans could agree to lan­guage on the WTO, and “a rules-based global sys­tem” not “the rules-based global sys­tem,” said the source. All agreed to “com­mit to mod­ern­ize the WTO to make it more fair as soon as pos­si­ble.”

Af­ter that, the task of fine-tun­ing the state­ment was handed off to their “sher­pas” or sum­mit aides, and se­nior of­fi­cials, who met un­til 2:30 in the morn­ing. But by the next morn­ing, be­fore the G7 lead­ers were to meet with a gen­der ad­vi­sory coun­cil for break­fast, it ap­peared the con­sen­sus had un­rav­elled.

And other stick­ing points re­mained, said the of­fi­cial. The Amer­i­cans didn’t want to agree to a dec­la­ra­tion on cli­mate change that ref­er­enced the Paris Ac­cord, nor did they want to sign on an oceans char­ter, which con­tained tar­gets on plas­tics, with sim­i­lar lan­guage. Word came Trump was un­ex­pect­edly go­ing to hold his own clos­ing press con­fer­ence be­fore leav­ing. So there was a scram­ble to get the lead­ers to­gether again to hag­gle over those is­sues.

It was the last chance to forge com­pro­mises. Pho­tos of the group of G7 lead­ers and their top of­fi­cials, in­clud­ing one posted by Merkel’s of­fice that went vi­ral, show an in­tense de­bate that was go­ing on over the fi­nal com­mu­niqué’s lan­guage on trade and oceans, with Trump seated in the mid­dle. No one ex­pected Trump would sign on the cli­mate change piece, but they’d hoped the U.S. would agree to take joint ac­tion to tackle plas­tic pol­lu­tion in the world’s oceans. In the end, it didn’t. On Sun­day, Trudeau wouldn’t di­rectly re­spond to Trump’s com­ments, only tweet­ing that the mean­ing­ful work the G7 had done was all that mat­ters.

SEAN KILPATRICK/THE AS­SO­CI­ATED PRESS

G7 lead­ers in their fi­nal news con­fer­ences at the sum­mit de­scribed trade talk be­tween their coun­tries as frank and di­rect.

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