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㽶ƵֱTime is running out㽶Ƶֱ: U.S. trade train moving fast, is Canada ready?

Expert group says Canada must get its house in order before formal CUSMA talks begin
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U.S. President Donald Trump, left, and Canadian Prime Minister Justin Trudeau talk prior to a NATO round table meeting at The Grove hotel and resort in Watford, Hertfordshire, England, Wednesday, Dec. 4, 2019. A group of experts is sounding the alarm that Ottawa needs to rapidly ramp up efforts to build inroads with Americans or Canada will be disadvantaged in a looming review of a critical trade agreement. THE CANADIAN PRESS/AP-Frank Augstein

A group of experts is sounding the alarm that Ottawa needs to swiftly make more inroads with Americans, or Canada will be deeply disadvantaged in a looming review of a crucial trade agreement.

㽶ƵֱTime is running out very rapidly for us,㽶Ƶֱ said Perrin Beatty, co-chair of the Expert Group on Canada-U.S. Relations.

The independent group, which includes former diplomats, policy advisers and business leaders, was created in recent months amid concern Ottawa was 㽶Ƶֱsleepwalking㽶Ƶֱ ahead of a 2026 review of the Canada-United States-Mexico agreement, Beatty said.

A new report from the expert group says Canada must get its house in order before formal talks begin. It calls on Ottawa to develop and initiate a clear strategy, appoint a chief negotiator and engage with Canada㽶Ƶֱs business community.

㽶ƵֱThe train is fast moving out of the station,㽶Ƶֱ said Beatty, also president and CEO of the Canadian Chamber of Commerce.

Negotiation of CUSMA, commonly dubbed 㽶Ƶֱthe new NAFTA㽶Ƶֱ in Canada, was a key test for Ottawa following Donald Trump㽶Ƶֱs victory in the 2016 presidential election.

㽶ƵֱThe new NAFTA is a victory for all Canadians, of every political view, and in all regions of the country,㽶Ƶֱ Deputy Prime Minister Chrystia Freeland said in January 2020. 㽶ƵֱIt has been a real Team Canada effort.㽶Ƶֱ

Even so, Robert Lighthizer, Trump㽶Ƶֱs trade representative, critically recounted in his book how Canada handled the renegotiation, saying at one point the two countries weren㽶Ƶֱt speaking and 㽶ƵֱNAFTA was hanging on by a thread.㽶Ƶֱ

The new report describes Trump㽶Ƶֱs current relationship with the Liberal government as 㽶Ƶֱchilly at best.㽶Ƶֱ If Trump returns to the White House, he is likely to set his sights on disrupting global trade and has already signalled plans for a 10 per cent tariff on imports.

It doesn㽶Ƶֱt necessarily mean Canada can ease up efforts under a Democratic president. Joe Biden largely kept Trump㽶Ƶֱs tariffs in place, despite promises to reverse them. There was also tension over the Biden administration㽶Ƶֱs Buy American procurement rules.

Many expect Kamala Harris, working to secure the Democratic nomination after Biden ended his run, will follow the path of her predecessor on Canada-U.S. relations. Harris, however, was one of 10 U.S. senators to vote against the trilateral agreement under Trump, saying it didn㽶Ƶֱt do enough to protect American workers or the environment.

The federal government is tracking views about the agreement in Canada, the United States and Mexico, said Global Affairs Canada spokesperson Jean-Pierre Godbout. Ottawa is eyeing a range of potential scenarios for review, he said.

㽶ƵֱWhen the time comes, the government will be ready to advance and defend Canadian interests,㽶Ƶֱ Godbout said in an email.

Beatty said the problem is the relationship between the two countries has 㽶Ƶֱshifted from being strategic to being transactional.㽶Ƶֱ In addition, Canada has become a less important trade partner to the U.S. compared with other places in the world.

Ottawa will have to sell Canada㽶Ƶֱs importance for other things like security, said Fen Hampson, co-chair of the expert group.

㽶ƵֱIt㽶Ƶֱs not going to be easy,㽶Ƶֱ said Hampson, a professor of international affairs at Carleton University. 㽶ƵֱWe really have to up our game.㽶Ƶֱ

Industry Minister François-Philippe Champagne is making regular visits south of the border as part of the Team Canada engagement strategy. Canada㽶Ƶֱs ambassador to the U.S., Kirsten Hillman, has been pounding the pavement from state to state, and attended the recent Republican National Convention in Milwaukee, where she made Ottawa㽶Ƶֱs case.

But the report says there are limits to Canada㽶Ƶֱs charm offensive. Americans are taking a closer look at Canada, but not in a good way.

Trudeau faced significant pressure over Canada㽶Ƶֱs defence spending while in Washington for the NATO leaders㽶Ƶֱ summit earlier this month.

The prime minister promised to meet NATO㽶Ƶֱs target, the equivalent of two per cent of gross domestic product, by 2032. But he has been criticized for the lengthy timeline and a lack of detail on how Ottawa will make it happen.

Americans across political lines have also been extremely critical of Canada㽶Ƶֱs new tax on large foreign digital services companies. The Office of the United States Trade Representative has said it will do what㽶Ƶֱs necessary to stop the tax.

Canada must stop 㽶Ƶֱpulling at the tail feathers of the American eagle,㽶Ƶֱ positioning Canada as part of the solution instead of part of the problem, Beatty said.

That means the federal government should develop a Hippocratic Oath, like the one taken by physicians, he said.

㽶ƵֱFirst do no harm.㽶Ƶֱ





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