The federal government is working day and night to prepare itself as the new Trump administration in the United States eyes restructuring the North American Free Trade Agreement, according to a senior official in Canada’s foreign ministry.

“If my colleague Martin is looking a little tired these days, it’s because he and his trade policy colleagues are literally working around the clock to consider all of [the] different scenarios,” David Morrison, Global Affairs Canada’s assistant deputy minister in charge of the Americas, said of Martin Moen, GAC’s director general for North America and Investment, at a Senate Foreign Affairs and International Trade Committee meeting on Feb. 16.

“We really don’t know at this point how the U.S. wishes to proceed,” Mr. Moen told Senators.

Mr. Morrison said he believed the U.S. government is just now starting to think about how to deliver on President Donald Trump’s promise to renegotiate the NAFTA, or tear it up.

He responded to questions from the Senators about Mexico’s place in any renegotiations—Mr. Trump has lambasted the NAFTA as favouring Mexico over the U.S.—by saying Mexico is “most definitely not being left out of the conversation.” Mr. Moen noted that the existing three-way deal allows just two of the partners to address some trade issues, such as trucking or the sugar trade, without drawing in the third.

Some Canadian government officials speaking anonymously to Reuters in January and former ambassador to the U.S. Derek Burney have suggested Canada distance itself from Mexico, perceived to be the true target of Mr. Trump’s dissatisfaction with the NAFTA, which came into force in 1994.

In response to chatter about whether Canada should go it alone with the U.S., Foreign Minister Chrystia Freeland (University-Rosedale, Ont.) underlined at a panel discussion hosted by the Canadian Council for the Americas on Feb. 21 in Toronto that “NAFTA is a three-country agreement,” and “Were there to be any new negotiations, those would be three-way negotiations.”

In any case, Mexican Foreign Minister Luis Videgaray, who also spoke at the event, said he understood if Canada avoided some of Mexico’s one-on-one concerns with the U.S. Each country would have its own agenda, the CBC reported him saying.

Ms. Freeland’s foreign ministry is preparing for the possibility of bilateral agreements with the U.S. and Mexico if a three-party deal can’t be struck, Mr. Morrison told the Senate committee.

“We’re in a period of great uncertainty, and in a period of uncertainty it’s prudent to prepare for all eventualities, and that’s of course what we’re doing.”

The federal government’s position is that NAFTA has benefited all three countries, said Mr. Moen, adding, “when we talk with business associations in the United States, with specific companies, with local governments, they all agree.”

“Regardless of rhetoric, Canada and many in the United States understand that a secure, stable, and prosperous Mexico is indispensable to Canada’s own prosperity and security,” said Mr. Morrison, listing security, human and drug trafficking, health pandemics, and energy systems integration as issues “best addressed collectively.”

 

Ninety days-plus to go

Mr. Trump has repeatedly said that the NAFTA gives Mexico an advantage over his country, and has moved American jobs to Mexico.

He has been less critical of trade with Canada, calling it “a much less severe situation than what’s taken place on the southern border” during his press conference in Washington with Mr. Trudeau last month. Mr. Trump said the U.S. wanted to “tweak” its trading terms with Canada.

What that means is anyone’s guess. The U.S. and Canada have major or minor trade disputes centred around softwood lumber, dairy and chicken, drywall, wine, and proposals for country-of-origin labelling rules that would require products from north of the border to be tracked separately and labelled as foreign-made.

When Conservative MP Gerry Ritz (Battlefords-Lloydminster Sask.), his party’s trade critic, pressured the Liberal government in the House last month to make public what’s on the table for renegotiation in any NAFTA talks, Liberal MP Andrew Leslie (Orléans, Ont.), the parliamentary secretary for foreign affairs, didn’t do so, but answered that his government would be ready for talks if and when the U.S. was ready to sit down.

That is still at least a few months away. Mr. Trump’s White House held an informal meeting with congressional leaders last month to discuss the NAFTA renegotiation, but has yet to start the clock on a 90-day window in which they will formally negotiate over how the U.S. should try to change the deal.

In Canada, Mr. Trudeau is leading a government-wide political charm offensive to match his foreign ministry’s efforts on the policy side. He restructured his cabinet, many think to better match it to the task of dealing with a Trump administration, and dispatched his top aides and cabinet ministers to the U.S. to build ties with the Trump team and the new Congress. Many of the Liberal-led House committees are also planning to travel to Washington to meet their counterparts in the next few months.

peter@hilltimes.com

@PJMazereeuw

Top Canadian industries exporting to the U.S. last year

Source: Innovation, Science, and Economic Development Canada

Auto manufacturing—$60.6-billion

Oil and gas extraction—$60.3-billion

Petroleum refineries—$12.1-billion

Aerospace parts and manufacturing—$9.1-billion

Pharmaceutical and medicine manufacturing—$8.5-billion

Sawmills and wood preservation—$8.2-billion

Aluminum production and processing—$7.6-billion

Resin, synthetic rubber manufacturing—$6.7-billion

Ferrous metal (non aluminum) smelting and refining—$5.9-billion

Other plastic product manufacturing—$5.3-billion

 

Mix with Mexico, or go it alone?

With U.S. President Donald Trump aiming his disappointment with NAFTA at Mexico rather than Canada, analysts and government officials are weighing in on whether Canada should push for a revised two-way or three-way deal.

 

Take a step back from the trilateral:

“We should not indulge in ridiculous posturing—like getting together with Mexico to defend our interests, when Canada has very different economic interests than Mexico. It is a fundamental error to conflate them.”

—Former ambassador to the U.S. Derek Burney, Maclean’s, Jan. 30

 

“We love our Mexican friends. But our national interests come first and the friendship comes second.”

—An unnamed source quoted by Reuters on the sidelines of a cabinet retreat in Calgary, Jan. 24.

 

“Mexico is in a terrible, terrible position. We are not.”

—An unnamed Canadian involved on the trade file quoted by Reuters Jan. 24.

 

 

Don’t throw Mexico under the bus:

“Our relationship with Mexico is important. We should stand with the Mexican government and help them deal with the discriminatory trends that they are now seeing.”

—Green Party Leader Elizabeth May, speaking to reporters Jan. 30,

 

“Canada may not be in the crosshairs in the same fashion as Mexico but we have no immunity from Trumpian threats. Canada and Mexico need to hang together or, surely, we will hang separately.”

—Former diplomat Colin Robertson, The Globe and Mail, Jan. 16

 

“The Trump presidency should bring Mexico and Canada much closer together, not tear us apart. Whatever trade or investment measures the U.S. applies to our country may end up harming Canada as well and destroying the competitive advantages that the North American value chain has brought since NAFTA came into force 23 years ago.”

—Andrés Rozental, former deputy foreign minister of Mexico, The Globe and Mail, Jan. 27

 

“NAFTA is a three-country agreement. Were there to be any new negotiations, those would be three-way negotiations.”

—Foreign Minister Chrystia Freeland, speaking at a Feb. 21 Toronto panel discussion

 

“Throwing friends and neighbours and allies under the bus is a position for a weak leader. This is not the Canadian tradition.”

—Former prime minister Brian Mulroney, CBC’s Power and Politics, Feb. 21