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00:00THIS YEAR. HE JOINS US NOW FROM OUR DETROIT BUREAU. THANKS FOR JOINING US. LET'S REVISIT THE FIRST QUESTION THAT SCARLET BROUGHT UP, WHICH IS AN IMPORTANT ONE, FROM YOUR EXPERIENCE IN RELATIONSHIPS BETWEEN THESE TWO COUNTRIES, HOW DID THIS COME TO THIS POINT WHERE A TARIFF GETS SLAPPED ON? >> LET'S START WITH THE FACT THAT THERE IS NO COUNTRY MORE IMPORTANT TO THE U.S. AND CANADA CANADA -- AND I MEAN THAT BECAUSE IT IS ONE OF OUR LARGEST TRADING PARTNERS, AND THE TRADE WE HAVE WITH CANADA IS 630 $5 BILLION IN GOODS AND SERVICES IN 2016. IT IS BALANCED. THE U.S. HAS A BIT OF A TRADE SURPLUS RIGHT NOW. WE HAVE A VERY BALANCED TRADE. IN ADDITION TO THAT, CANADA IS THE LARGEST ENERGY SUPPLIER TO THE UNITED STATES, ENERGY THAT WE DON'T PRODUCE OURSELVES. BY THE WAY, WE DON'T MAKE ENOUGH ENERGY WITHIN THE UNITED STATES TO SUPPLY ALL OF OUR ENERGY NEEDS. CANADA, BOTH IN THE OIL SANDS AND IN HYDRO, SOLAR, OTHER WAYS, PROVIDES ENERGY. WE WORK TOGETHER IN NATO, NORAD, WE SHARE THIS AMAZING 5000-PLUS MILE BORDER AND WE HAVE SUCH AN INTERCONNECTED RELATIONSHIP. I THINK PEOPLE NEED TO UNDERSTAND THE DEPTH AND BREADTH OF THE RELATIONSHIP BEFORE WE GET INTO THESE MICRO-ISSUES. WHEN YOU GET INTO AN ISSUE THIS LARGE YOU WILL HAVE DIFFERENCES AT DIFFERENT TIMES. SOFTWOOD LUMBER HAS BEEN ONE THAT HAS EXISTED OVER MANY DECADES, AND WE HAVE BEEN ABLE TO FIND SOLUTIONS AND RESOLUTIONS TO THAT. UNFORTUNATELY, OUR TEAM WHO WORKED ON THIS DURING THE LAST ADMINISTRATION -- I WORKED BOTH IN THE HARPER GOVERNMENT AND TRUDEAU GOVERNMENT -- WE WERE NOT ABLE TO RESOLVE THE SOFTWOOD LUMBER SITUATION, SUCH THAT THE AGREEMENT EXPIRED. JUST SO EVERYONE UNDERSTANDS, THIS IS A CLAIM BY INDUSTRY THAT COMMERCE DEPARTMENT IS EXECUTING UPON. THIS IS AN INDUSTRY CLAIM, AND VERY DIFFERENT IN TERMS OF THE CLAIMS IN THE NEGOTIATIONS THAT TAKE PLACE IN NAFTA. THIS IS OUTSIDE OF NAFTA. I THINK THEY ARE CONFLATING THE TWO, WHICH IS UNFORTUNATE. SCARLET: AN IMPORTANT DISTINCTION TO MAKE, THIS IS THE INDUSTRY'S CLAIM AND THE GOVERNMENT IS JUST PASSING THIS ALONG, IN EFFECT. YOU MENTIONED THE NEGOTIATIONS TOOK PLACE AS YOU ARE AMBASSADOR. WHAT WERE THE BIGGEST STICKING POINTS, WHAT WAS IT THAT DID NOT ALLOW THE U.S. AND CANADA TO COME TO AN AGREEMENT ON LUMBER? AMB. HEYMAN: WHEN WE GOT TOGETHER, OUR INDUSTRY HAS THE PERSPECTIVE THAT IN THE UNITED STATES, CANADA SHOULD HAVE A CERTAIN MARKET SHARE. THE CANADIANS WERE LOOKING FOR OTHER MEANS TO ACTUALLY SOLVE THAT PROBLEM. WE ENDED UP HAVING A GAP BETWEEN WHAT THE CANADIANS WOULD LIKE TO SEE IN TERMS OF SOLUTIONS, AND THE INDUSTRY. THE OBAMA ADMINISTRATION WAS EFFECTIVELY ACTING AS A GO-BETWEEN. WHAT HAS TO HAVE IT HERE IS ONCE AN AGREEMENT IS REACHED, THERE HAS TO BE AN AGREEMENT WITH THE INDUSTRY SO THEY DON'T SUE. THE INDUSTRY HAS TO COME ALONG WITH THIS. THE U.S. INDUSTRY FEELS VERY STRONGLY, THEY THOUGHT THE CANADIANS HAD AN UNFAIR ADVANTAGE DURING THE LAST AGREEMENT, AND WANTED TO REVISE THAT. OLIVER: WHAT DOES THIS MEAN IN TERMS OF PERHAPS WHAT WE CAN READ THROUGH ABOUT HOW TRUMP'S ADMINISTRATION WILL WORK WITH HIS PEERS ACROSS COUNTRY BORDERLINES? IT SEEMS LIKE THIS WAS A MEETING THAT, AT LEAST ON THE SURFACE, WENT WELL. THEN YOU HAVE THIS COMING FRONT AND CENTER. WHAT DOES THIS TELL US ABOUT THE NEGOTIATION STYLE, THE PRIORITIES OF THE CURRENT ADMINISTRATION? AMB. HEYMAN: BEING VERY INVOLVED IN A TRADE NEGOTIATIONS PREVIOUSLY AND WATCHING WHAT IS UNFOLDING HERE, THERE ARE TWO DISTINCT APPROACHES. YOU CAN DO TRADE NEGOTIATIONS BEHIND CLOSED DOORS AROUND A TABLE, WHERE MULTIPLE COUNTRIES, AS WE DID WITH TPP, CAN SIT DOWN AND TALK ABOUT DESIRES, BENEFITS, CONCERNS, THE GIVE AND TAKE OF THAT SET OF NEGOTIATIONS. I WOULD SAY TRADE NEGOTIATIONS ARE THE MOST COMPLEX THAT TAKE PLACE, NOT ONLY IN DETAIL, BUT THE POLITICAL RAMIFICATIONS. WHAT IS HAPPENING NOW, THE PRESIDENT AND THE WHITE HOUSE, ARE USING COMMUNICATIONS AND GOING PUBLIC WITH WHAT THEY CONSIDERED TO BE IRRITANTS, THINGS THEY WANT TO RESOLVE, BEFORE WE ACTUALLY SIT DOWN AND NEGOTIATE IN THE ROOM ACROSS THE TABLE FROM EACH OTHER, WHICH MAKES IT VERY CHALLENGING, I THINK, WHETHER IT IS CANADA OR ANY OTHER COUNTRY. ONE HAS TO EXPECT, THE PRIME MINISTER OF ANY COUNTRY, WHEN POKED AT BY ANOTHER COUNTRY WILL DEFEND THEMSELVES. YOU GET INTO THIS ACCUSATION ON ONE SIDE, RESPONSE ON THE OTHER SIDE, AND THEN YOU END UP HAVING TO RESPOND TO THE RESPONSE. IT IS UNFORTUNATE BECAUSE IT IS A DISTRACTION FROM WORKING TOGETHER. I THINK WHAT WE NEED TO DO WITH CANADA IN PARTICULAR, UP UNTIL RECENTLY WAS OUR LARGEST TRADING PARTNER, NOW NUMBER TWO TO CHINA . WE CREATE MILLIONS OF JOBS IN THE UNITED STATES AS A RESULT OF OUR RELATIONSHIP WITH CANADA. 35 STATES, THEIR NUMBER ONE EXPORT MARKET IS CANADA. WE ARE SO CLOSELY TIED TOGETHER, SUPPLY CHAINS WORK TOGETHER. YES, THERE ARE AREAS WHERE WE HAVE DIFFERENCES, CANADIANS WITH US, WE WITH THEM, BUT THAT IS BEST, I THINK, FOR BEHIND CLOSED DOORS TO SOLVE THE ISSUES. SCARLET: YOU MAKE A GOOD CASE FOR THAT BUT THAT IS NOT THIS ADMINISTRATION'S STYLE. IF THIS IS AN OPENING GAMBIT FOR THE NEGOTIATION STYLE IN PUBLIC, WE KNOW CANADA HAS SAID IT WILL VIGOROUSLY DEFEND ITS SOFTWOOD INDUSTRY LUMBER INTERESTS, INCLUDING LITIGATION. HOW WILL THEY RESPOND, THROUGH LAWSUITS? AMB. HEYMAN: IT WILL BE UP TO THE CANADIANS TO SEE HOW MUCH THEY EITHER DESIRE TO DIAL IT UP AT THIS STAGE, OR APPROPRIATELY RESPOND WITHOUT DIALING IT UP TOO MUCH, BUT MAKING SURE THE CANADIANS FEEL THEIR PRIME MINISTER AND GOVERNMENT IS BEST REPRESENTING THEM IN THIS ENVIRONMENT. THE UNITED STATES CANNOT COUNT ON ANYONE AROUND THE WORLD MORE THAN WE CAN COUNT ON, HISTORICALLY, OUR RELATIONSHIP WITH CANADA AT EVERY LEVEL. WE HAVE WAYS IN WHICH WE CAN WORK TOGETHER WITH CANADA. WE HAVE DONE IT FOR SEVERAL HUNDRED YEARS AND IT HAS WORKED OUT TO THE BENEFIT OF OUR COUNTRY. I THINK IT IS JUST A HUGE MISTAKE TO TAKE YOUR BEST FRIEND, NEXT-DOOR NEIGHBOR, AND START POKING AT THEM REALLY HARD. I DON'T THINK AMERICANS WOULD THINK ABOUT TAKING YOUR BEST FRIEND AND START POKING AT THEM, EVEN IF YOU HAVE DIFFERENCES OF OPINION. THAT IS WHEN YOU TAKE YOUR BEST FRIEND AND YOU SAY, COME ON, WE ARE NEW IN THIS ADMINISTRATION, LET'S SIT THROUGH THESE ISSUES AND FIVE HAVE TO SUCCESS. IN MY RELATIONSHIP WORKING WITH THE CANADIANS, THEY ARE VERY WILLING TO FIND THOSE PATH TO

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Former Amb. Says Huge Mistake to Be Difficult With Canada

Bruce Heyman, former U.S. ambassador to Canada, comments on the trade row between the U.S. and Canada. He speaks with Bloomberg's Oliver Renick and Scarlet Fu on "Bloomberg Markets." (Source: Bloomberg)

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