Will trade stop ?its the senators and congressmen who get to explain to those 9 million voters why all their livelihoods are threatened.
I'm sure that's going to be big fun.
Will trade stop ?its the senators and congressmen who get to explain to those 9 million voters why all their livelihoods are threatened.
I'm sure that's going to be big fun.
Canada maintains that its efforts to evade American tariffs on steel and aluminum, and threatened tariffs on cars, are on a "separate track" from the ongoing NAFTA talks.
But that's not how U.S. President Donald Trump sees it. His attempts to use tariffs as leverage in NAFTA negotiations have become such a ingrained habit by this point, he's started using the word as a verb.
"If countries will not make fair deals with us, they will be 'Tariffed!'" he tweeted Monday.
China was in his sights at the start of the week — but by week's end he also could be talking about Canada and his threat to impose "national security" tariffs of 20 to 25 per cent on its auto industry if it doesn't soon join the new North American trade deal Americans sketched out with Mexico last month.
One of Trump's loyal Congressional soldiers, House Majority Whip Steve Scalise, warned Tuesday that Congress would "consider its options" if Canada doesn't sign on.
Foreign Affairs Minister Chrystia Freeland insists Canada won't sign a bad deal.
"That's not rhetoric," she told reporters before she left again for Washington. Still, she said, Canadians have a "talent for compromise.
Her negotiators face a tough call. Even if they strike deals and close the remaining chapters — by Thursday, Freeland's Mexican counterpart suggested, if they're going to have a text for Congress by the end of the month — a bigger question lurks.
Would a renegotiated NAFTA lift damaging steel and aluminum tariffs and shut down threats of future car tariffs? If it didn't, why would Canada sign on?
Monica de Bolle, a senior fellow at Washington's Peterson Institute for International Economics, said people have been too focused on specific sticking points — dairy concessions, dispute resolution chapters, intellectual property demands and more.
"The big picture is the threat of tariffs," she said. "And not just the threat. The ones already in place."
Mexicans sought 'insurance'
Mexico's preliminary agreement in principle with the U.S. included a side letter that accepts voluntary export restraints, or quotas, on future automotive exports to the U.S. In return, future car tariffs won't apply to shipments below the mutually-acceptable level.
De Bolle was in Mexico last week, speaking to officials from both the outgoing and incoming administrations.
"All of them said explicitly that this letter was their insurance," she said. "They're very straightforward in terms of saying that this is why they accepted this deal — which, on the surface, seems to have been a bad deal for them in many other respects."
De Bolle said that the Trump administration may double back and impose car tariffs on Mexico anyway, but the Mexicans are betting that they won't.
Because of this move, "I can't see how the Canadians are not going to demand a similar insurance," she said.
But there were no assurances for Mexico about the removal of steel and aluminum tariffs — something that's important to both countries but arguably more critical for Canada, given how much it exports to the U.S.
The Trump administration's trade strategy is premised on creating American jobs by putting up tariff walls to support domestic industries. They aren't about to roll anything back, De Bolle said."Because the Mexicans gave so much away, it puts Canada in a tricky position," she said. "The U.S. is just basically going to say to the Canadians, 'We didn't do this for Mexico, so we're not going to do this for you.'"
Proceeding with a new NAFTA without a de-escalation on tariffs would be a hard sell for the Trudeau government at home. That's why de Bolle thinks the Canadians are unlikely to settle this week.
"I don't think we're going to get a NAFTA deal any time soon," she said. "I wouldn't be surprised if the Canadians are just playing for show here."
'Messy' to cut out Canada
Flavio Volpe, the president of Canada's Automotive Parts Manufacturers' Association, said he won't judge Mexico's decision to accept quotas in the face of a serious threat to its economy. But he's concerned about the precedent it sets.
This threat of car tariffs may or may not be legitimate, Volpe said; major players in the U.S. automotive industry have warned of dire economic consequences, and Republican Senator Orrin Hatch warned Congress could repeal Trump's tariff powers if he followed through.
When it comes to NAFTA, "all of the things that exclude Canada are messy for American commercial interests," he said. "Whether it means something specifically to the president or not, it does mean something to Congress."
Instead of a side letter, Canada could insist the Commerce Department change the scope of its investigation to exclude its NAFTA partners.
The U.S. doesn't need to put quotas on Canada anyway: Canada's industry has been shrinking, not expanding like Mexico's.
Lifting steel and aluminum tariffs is trickier, Volpe said, because the U.S. industry is operating at only 50 per cent of its capacity. By contrast, the American automotive industry is operating at close to full capacity.
Canada's strongest defence is the damage car tariffs would do to the U.S. industry.
"Canada's not going to be the biggest loser on this one," Volpe said, adding his organization will be one of many heading to court to defend their industry.
Face-saving pragmatism?
Trade lawyer Mark Warner sees a tough choice shaping up for Canada — between trying its luck with the chaos that might unfold if this week's deadline is missed, or swallowing some national pride in the name of pragmatism.
It's not realistic to think that Trump will retract his tariff threats, he said. Canada may believe that levying national security tariffs against an ally is wrong, but that's not getting it anywhere.
"Their bet is that Trump won't do what he says he's going to do, he won't withdraw from NAFTA, and he won't put the [section] 232 tariffs on autos," he said. "Personally, my view is that those are two big bets.
"I doubt that Canada will get a formal carve-out from 232 tariffs explicitly made in this agreement. The practical thing, as the Mexicans figured out, is, 'Let's give him a face-saving device.'"
If quotas are set high enough, they might not hurt Canadian industries. But they could make the Trump administration feel like it has a win, and climb down.
"You've got to be a bit creative," Warner said.
Otherwise, Canada might need Congress to ride to its rescue to block either the car tariffs or Trump's withdrawal from NAFTA altogether.
Warner suspects a veto-proof majority in support of the existing NAFTA may be hard to achieve now, let alone after November's unpredictable midterms.
As Ontario Premier Doug Ford heads to Washington, he is warning the federal government not to give ground on measures protecting the agriculture sector during talks to renegotiate the North American Free Trade Agreement.
Ford is due to meet Canada's NAFTA negotiators in the U.S. capital on Wednesday to be briefed on the status of the talks. It's his first trip to Washington since becoming premier in June.
Ford is making the trip to meet federal officials and "make the case that any NAFTA deal must protect Ontario jobs in both auto and agriculture sectors," he said in a speech to hundreds of farmers on Tuesday.
"I won't mix words when I go down there because farm jobs are not a bargaining chip. Not now, not ever," Ford said in Pain Court, Ont., at the opening ceremonies of the International Plowing Match, an annual event celebrating Ontario agriculture.
Asked by reporters for more details, Ford said, "I don't want any farmer used as a bargaining chip, be it supply management."
Sources have told CBC News that Canada is willing to make concessions on dairy supply management which would allow American farmers to sell more products north of the border.
Ford said his message to the Prime Minister Justin Trudeau's government is: "Don't compromise, because we have to protect the farmers."
It's a shift in tone from Ford's previous pledges of unwavering support for the federal government on the NAFTA talks. It comes just a day after the federal Conservatives vowed to ramp up their criticism of how the government has handled the negotiations.
In June, just a week after winning the provincial election, Ford spoke of "Ontario's government standing shoulder to shoulder with our federal counterparts," in a joint news conference with Foreign Affairs Minister Chrystia Freeland.
"We must stand together during these critical negotiations because there is so much at stake," he said.
Freeland is also heading to Washington this week in an effort to strike a final deal. She'll continue direct negotiations with her counterpart, United States Trade Representative Robert Lighthizer.
On Tuesday, despite urging the Trudeau government not to compromise, Ford insisted he still stands "shoulder to shoulder" with Ottawa on NAFTA.
Officials in Ottawa say they welcome Ford's interest in the NAFTA talks and see his contribution as useful. Ontario government sources tell CBC News that Ford has a strong relationship with the U.S. ambassador to Canada, Kelly Craft.
Since becoming premier, Ford has made direct contact with a number of U.S. governors to ensure their backing for a trade deal. His predecessor Kathleen Wynne spoke or met with more than 30 governors in the year and a half after the inauguration of U.S. President Donald Trump to try to promote the mutual benefits of NAFTA.
The U.S. is trying to extract some concessions from Canada on the dairy front, demanding more access to a market that is largely protected from imports by supply management. Trudeau has said repeatedly that he will not dismantle the country's farm policies.
Doug Ford off to Washington as NAFTA talks hit critical stage
Doug Ford is the de facto leader of the Canadian conservatives.
He doesn't seem to want the feds to destroy the dairy farming sector.
NAFTA talks: Like Mexico, Canada may need 'insurance' against tariffs
Trump says Canada not in a ‘good trade position’ as NAFTA talks drag on
In a press conference Tuesday afternoon, U.S. President Donald Trump told reporters that Canada cannot keep charging the United States "300 per cent" on dairy products.
In the midst of tense NAFTA negotiations between the United States and Canada, negotiators have been tight-lipped about the progress of the talks, and especially on the progress on key issues like supply management and Chapter 19.
Following a meeting with the Polish President Andrzej Duda, Trump took several questions from reporters about NAFTA, as well as on sexual misconduct allegations against his Supreme Court nominee Judge Brett Kavanaugh and American relations with Poland.
On NAFTA, Trump said that "Canada has taken advantage of our country for a long time."
'We love Canada, we love the people of Canada, but they are in a position that's not a good trade position for Canada," he added. Trump also reiterated that the U.S. and Mexico had reached a tentative trade deal, which seemingly kicked NAFTA talks into overdrive.
Canada's Foreign Affairs Minister Chrystia Freeland has been back and forth to Washington in recent weeks as pressure mounts on the Canadian government to bring home a deal.
However, she's often repeated the position of the Liberal government: "No deal is better than a bad deal."
While she spoke to reporters on Tuesday, Freeland insisted that the environment around negotiations is one of "good will and good faith," but that Canada is fully prepared to walk away from NAFTA if a deal satisfactory to all parties cannot be reached.
However, she ended on a commonly made point, saying that "one of Canada's national characteristics is a talent for compromise."
Canada's supply-chain management has been a sticking point in the plot of the NAFTA saga, which is an aggressive cost-control policy involving domestically-raised poultry and dairy products.
Trump has repeatedly criticized Canada's dairy policy, and repeated this complaint on Tuesday afternoon.
"They cannot continue to charge us 300 per cent tariff on dairy products, and that's what they're doing," he said.
The president doesn't seem to be the only American official frustrated with Canada's approach to NAFTA negotiations, however. In a statement released to the U.S. website Politico, house majority whip Steven Scalise said there is a "growing frustration" among Congress with Canada's "negotiating tactics."
He added that Canada didn't seem willing to "make any concessions" to achieve a deal.
NAFTA talks have been ongoing for 13 months now and little is known about how much longer they'll continue -- as loosely-set deadlines continue to slide by. Freeland will return to Washington later this week to resume negotiations.
So, Trump benefits if you cave to his "demands" but you don't?He doesn't owe me any favours
Damn I forgot to quote that one
So, Trump benefits if you cave to his "demands" but you don't?
Oh well, better surrender to the Trump, then! America will be greater! Canada gets screwed but that's okay 'cause Trump benefits and he's the second coming.
(... or possibly the anti-Christ ... jury is still out)
WASHINGTON - Thirteen months is an "absolutely normal" time frame for a task as complex as modernizing North American trade, Foreign Affairs Minister Chrystia Freeland said Wednesday as she notched another day on the road towards a new NAFTA deal with the United States and Mexico.
On a day where signs of progress were in the air, Freeland shrugged off talk of congressional deadlines and growing impatience in political circles as she justified the amount of time it has taken for all three sides to get to their current positions.
Rome, in other words, wasn't built in a day.
"For an agreement of this scale, 13 months for a very deep modernization of the kind we're working on is absolutely normal," said Freeland, who will be back for more talks Thursday. "Trade agreements do take some time, both to negotiate and to update, because the economy is complicated and trade agreements are complicated."
And when asked whether she could hear the clock ticking, she said: "Canada's sole objective — the only target that we are aiming for — is getting a good deal for Canada, so that's what we're focused on."
Among the evidence that the finish line isn't far away: word from sources familiar with the negotiations that the U.S. backed off in recent weeks on its demands for lucrative procurement projects.
Then there was the mood of Freeland herself, who arrived in the U.S. capital the night before wearing a T-shirt from her kids emblazoned with the slogan, "Keep Calm and Negotiate NAFTA," and thanked journalists for keeping vigil and ordinary Canadians for their expressions of support.
"People come up to me on the street or in airports, which is where I am often found, just saying how strongly they support Canada in these complex negotiations," she said before a midday meeting with Ontario Premier Doug Ford, in town to wave the Team Canada flag.
"I just want to say to everyone who has done that, thank you very much. It means a lot to me. I always share your messages with the negotiating team, and that gives us real strength and reminds us of how important the work we're doing is for Canadians."
She credited Mexico with making significant concessions in its deal with the U.S. on automobiles and for permitting large wage increases for Mexican auto workers — something Canada and the U.S. both wanted to stop the growing flow of automobile production into Mexico because of its cheap labour.
"Over the summer, Mexico made some very deep, very difficult concessions on rules of origin," she said, referring to an early U.S. demand that would have dramatically increased the amount of American content required in cars built outside the country.
"The fact that Mexico made those concessions is good for higher-wage workers; good for the high-wage workers of Canada, good for the high-wage workers of the U.S., and that is what allowed the rest of the negotiations to move forward."
And there was the all-nighter pulled by one of Canada's negotiating teams, which Freeland said didn't wrap up its marathon session until 7 a.m. Wednesday morning. "There is some very intensive work happening," she acknowledged as she thanked negotiators, too, for their tireless efforts.
Sources say Mexico believes it has also done much of the "heavy lifting" on getting the Americans to back down on its demand to limit the ability of Canadian and Mexican firms to bid on U.S. infrastructure projects, while seeking greater access for American firms to Mexican and Canadian government projects.
Mexico and Canada are both quietly taking credit for standing firm against the controversial U.S. position that would have effectively limited their respective countries' ability to bid on valuable American government infrastructure projects.
Earlier in the day in Ottawa, Prime Minister Justin Trudeau said Canada isn't backing down from its own demands — a position that has some U.S. legislators bristling at what they consider a stalling tactic.
"We've been very clear that we're interested in what could be a good deal for Canada, but we're going to need to see a certain amount of movement in order to get there," Trudeau said.
Pressure is mounting on the federal government to get a deal done. On Wednesday, Texas Republican Kevin Brady, head of the influential House Ways and Means committee, told CNBC the two sides are "close enough" and the time has come for Canada to "step it up" and get on board.
Trade observers say that while many in Congress want Canada to be part of a three-way deal, they may not be willing to sacrifice an agreement in principle between Mexico and the U.S. negotiated earlier this year.
That deal is widely seen to require congressional approval before Dec. 1 in order to survive the arrival of an incoming Mexican government whose supporters have mixed feelings about the agreement.
erry Dias, head of Unifor, Canada's largest private-sector union, said Canadian negotiators remain unmoved by the recent rumblings on Capitol Hill and focused on getting a deal that's in the country's best economic interests.
While Canada has been pushing for wording in NAFTA aimed at strengthening labour protections and gender equality, the overall negotiations are said to have stalled over Canada's insistence that an agreement contain an independent dispute-settlement mechanism.
"There's not going to be an agreement where disputes are handled in the American courts. Why would we do that?" Dias said.
"Having Colonel Sanders take care of the chickens — in other words, having all disputes handled in the U.S. courts — just doesn't make any sense for Canadians."
I personally am going to have benefits from this agreement either way they need our Oil I work in the patch, so I don't know what your going on about we missed our window for an ideal agreement JT and Freeland are procrastinating on purpose for politics. The biggest mark they want to make is being a progressive agreement, I see they dropped the FN concern from the agreement already.
PM says 'movement' needed in NAFTA talks
Trump isn't the only one guilty in this mess doesn't help when JT keeps moving the goal posts to get a deal done
WASHINGTON - Despite the eye-popping figures thrown around in the NAFTA conversation — $2 billion in daily trade, 18 million autos built each year, hundreds of thousands of jobs in the U.S. — one number in particular seems to be giving fits to Canada’s negotiating team: 232.
That's the section of U.S. trade law that lets President Donald Trump use national security as justification to impose crippling tariffs on foreign imports, a sword of Damocles the federal Liberal government desperately wants to blunt.
Sources say Thursday's talks between Foreign Affairs Minister Chrystia Freeland and U.S. trade ambassador Robert Lighthizer were dominated by efforts to secure a commitment from the Americans that a new NAFTA deal would mitigate the risk of such tariffs.
"232 is emerging as the major problem," said one source close to the talks, speaking freely on condition of anonymity.
Rather than demanding absolute immunity, Canada is working hard to try to make the president's favourite trade cudgel "more difficult to reach for," the source said.
For her part, Freeland offered little evidence of momentum Thursday when she emerged from the talks, sticking to her strategy of keeping mum on substantive details and offering only that the two sides were focused on "some tough issues."
"The atmosphere continues to be constructive, and we continue to work towards a deal, which has always been Canada's objective," Freeland said.
"Canada has, from the very beginning, been guided by a single metric, and we continue to be guided by that single metric, and that metric is getting a deal that is good for Canada and good for Canadians. That is our target."
Talks, as well as the ensuing public narrative, have been dominated by some familiar stumbling blocks, including the dispute-resolution mechanism known as Chapter 19, stronger protection for Canadian workers and more U.S. access to Canada's dairy market, among others.
There have been signs of progress, including word Wednesday that the U.S. had backed off in recent weeks on its desire to limit Canadian and Mexican firms from bidding on lucrative American procurement projects. Talk of all-night marathon negotiating sessions is also seen as a good sign.
But as some of the more fundamental differences fall away, Sec. 232 has indeed emerged as a major issue, trade watchers say.
"I think the Section 232 issue is very big. Chapter 19 dispute resolution is less important," said trade lawyer Darrel Pearson, head of the international trade and investment practice at Bennett Jones in Toronto.
That's because, as Canada's experience with softwood lumber would suggest, a means of resolving disputes doesn't make disputes go away — and Trump's demonstrated proclivity for shooting first and asking questions later would seem to amplify that issue even more.
Section 232 of the decades-old U.S. Trade Expansion Act allows the president, under certain circumstances, to impose duties recommended by his commerce secretary under the notion that the goods being imported are a threat to national security.
It was on that basis that the U.S. imposed hefty tariffs on steel and aluminum imports from Canada and other nations, and has threatened to do the same on auto imports. The Trudeau government has said it would respond to auto tariffs with its own countermeasures.
Critics warn the potential tariffs of up to 25 per cent, plus retaliatory measures, could add thousands of dollars to the price of a vehicle, kill jobs and cause significant harm to the global auto industry.
"I think it is clear that without Section 232 usage being resolved, Canada remains at significant risk," said Pearson. Canadian negotiators didn't make the tariffs a major issue at the outset of the talks in order to avoid giving the U.S. too much leverage, he added.
"It may have been a better strategic move to negotiate Section 232 separately, eliminating a Canadian 'ask' from the negotiations so as not to add to the U.S. leverage, but the risks of continued threats of 10 or 25 per cent are too large," Pearson said.
Unifor president Jerry Dias, the head of Canada's largest private-sector union, also had his sights set Thursday on Section 232, calling it a "deal-breaker" that "doesn't make a stitch of sense."
"We're not going to sit there and let Trump put an economic gun to our head anymore," Dias said.
Advertisement
"Here we're talking about a trade agreement between two countries, but then one of the parties reserves the right to jerk around your economy at any given time? Not a chance."
Pressure has been mounting on the federal government to get a deal done, including from influential Republican members of Congress keen to spur an agreement before the November midterm elections and before a new, less NAFTA-friendly government takes office in Mexico.
Then there's the U.S.-Mexico agreement in principle that Trump and outgoing Mexican counterpart Enrique Pena Nieto announced last month, to the surprise of the Canadian team. While many observers, including the federal government itself, are skeptical Congress would approve that deal without Canada, others warn the ticking political clock could change that dynamic.
Any deal is widely seen to require congressional approval before Dec. 1 in order to survive the arrival of an incoming Mexican government whose supporters have mixed feelings about the agreement.