Trump Aide Reassures Canada on Trade Talks, Isolating MexicoBy and
U.S. administration plans to reopen decades-old Nafta pact
Trudeau envoy wants country to avoid being collateral damage
The U.S. and Canada are signaling most of the pain from reworking Nafta will hit Mexico, with an adviser to Donald Trump flying to Calgary to tell Justin Trudeau’s team that commerce is balanced and running smoothly north of the border.
Trudeau’s cabinet gathered in the nation’s oil hub to weigh Trump’s impact, as Canada’s ambassador to the U.S. said he would consider bilateral measures with the U.S. in talks about the North American Free Trade Agreement.
The comments -- which came as Trump signed an executive order that abruptly ended the decades-old U.S. tilt toward free trade -- suggest the new administration is splintering the continental pact as the president prepares to meet Mexico’s Enrique Pena Nieto later this month.
The Canadian prime minister also intends to meet with Trump soon. While a date has yet to be confirmed, Trudeau received reassurances from a key adviser to the new administration on Monday.
“I don’t think he should be enormously worried because Canada is held in very high regard,” Stephen Schwarzman, chief executive officer at Blackstone Group LP and head of the president’s strategic and policy forum, told reporters after speaking to cabinet. “We have balanced trade between the U.S. and Canada, and that’s not the kind of situation where you should be worrying about the kind of issues you are.”
Line of Fire
David MacNaughton, Trudeau’s ambassador in Washington, said upon arrival in Calgary that his focus is on avoiding Canada being “collateral damage” in trade actions aimed at China and Mexico. “We will cooperate on trilateral matters when it’s in our interest and we’ll be looking to do things that are in our interest bilaterally also. Some of them may be within Nafta, some may not be,” he said Sunday night.
Since Trump’s election victory, Canadian trade officials and observers have held out hope they’re not Trump’s target. Canada is the top buyer of U.S. goods overall and the top buyer for 35 individual states, a detail Trudeau emphasized to the president in a call Saturday. What Canadians fear is that any tariffs or other measures applied broadly will sideswipe them. About 70 percent of Canadian trade is with the U.S.
“I don’t think Canada’s the focus at all, but I think we are part of that,” MacNaughton said. “That’s what we’ve got to worry about -- is if we’re collateral damage.” Asked about those comments, Schwarzman signaled Canada has “special status” and there was a “very low” risk of damage spilling north.
Mexico and China
The Canada-U.S. relationship “is a model for the way trade relations should be,” he said. Schwarzman added that Nafta countries would be in a good position to avoid any border taxes.
Trudeau talked with Pena Nieto on Sunday, releasing a short summary afterward saying they “spoke about the importance of the Canada-Mexico bilateral relationship, and of the trilateral North American partnership.”
Trump officials have yet to raise any specific concerns about Canadian trade, MacNaughton added. “Their biggest concern frankly in terms of trade is the deficits they have with China and Mexico. That’s what they’ve raised.”
Trudeau has prepared for the Trump era by promoting his trade minister, Chrystia Freeland, to serve as foreign minister and his main liaison for talks with Trump. He appointed a retired general as her deputy with a specific focus on wooing the U.S. administration, and reshuffled staff to focus on U.S. ties.
Asked about Mexico on Monday, Freeland cited Pena Nieto’s visit to Ottawa this summer as evidence of “a very mutually beneficial Nafta partnership. But of course, our relationship with the United States is primarily a bilateral relationship.”
Meanwhile, Trump-style politics are looming larger in Canada. Trudeau canceled a trip to the World Economic Forum in Davos, Switzerland, in favor of a rural tour aimed at fending off controversies that painted him as out-of-touch. His main rival party is embroiled in a leadership race where several candidates are drawing from Trump’s playbook.
Freeland has downplayed the risks of major trade impacts, saying she’s “really confident” Canada can build a strong relationship with the Trump team. “There’ve been nearly a dozen meaningful changes to Nafta since it was first concluded, so we’re looking forward to those conversations,” she said in a television interview on inauguration day.