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Nafta `Tweak’ Aside, Trudeau Gets What He Wants From Trump Visit

Posted On February 14th
By : EnergyNow Media
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Trudeau Trump Large Image
February 14, 2017

(Bloomberg) 

As Justin Trudeau praised U.S. ties in his debut remarks at Donald Trump’s White House, the Canadian prime minister’s top diplomat nodded along in the front row with barely a glance at her boss.

Instead, Foreign Minister Chrystia Freeland’s eyes were fixed squarely on Trump, as if imploring him to let each of Trudeau’s words sink in: common goals, bilateral trade, middle-class jobs. The president soon caught her eye and nodded.

Trudeau left Washington Monday with as much as he could hope for. Trump pledged publicly to only “tweak” Canada’s side of the North American Free Trade Agreement and ease the flow of goods along the northern border, while saying he’d focus instead on the “unfair” U.S. commercial relationship with Mexico to the south. 

In private, the president gave no indication of how he’d proceed on Nafta talks or whether he’d press ahead with a border tax, according to a senior Canadian government official who spoke after the meeting on condition they not be identified. It was the clearest signal yet that Canada — and the $541 billion in bilateral trade of which it’s a part — isn’t in U.S. crosshairs.

“Trudeau did very well today,” Christopher Sands, director of the Center for Canadian Studies at Johns Hopkins University, told Bloomberg TV Canada Monday. “Trump made some important distinctions between Canada and Mexico. That’s reassuring for markets.”

Guarded Approach

The whirlwind visit lasted roughly nine hours. The two leaders spent four together before the prime minister’s meetings with House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell. Trudeau’s ministers also met with Vice President Mike Pence, and the prime minister’s senior aides met with their counterparts in Trump’s office, including Stephen Bannon and Jared Kushner.

Trudeau headed into the meeting biting his tongue on issues like refugee rights to instead focus almost exclusively on trade. Canada’s relationship with the superpower to its south largely consists of selling resources to Americans and buying goods in return. According to a report this month from the Bank of Nova Scotia, Canada ran a $303 billion deficit in manufactured goods with the U.S. between 2009 and 2015, and a surplus of $453 billion in energy and resource products. Mexico runs surpluses in both categories.

In addition to trade, the leaders and their aides discussed current events such as North Korea’s missile tests and the search for a new U.S. ambassador to Ottawa. That position isn’t expected to be filled soon, the Canadian official said.

Trilateral Trade

The joint statement released by the White House and the prime minister’s office emphasized cross-border cooperation, including a commitment to expanded trade. Trump later echoed that. “We have a very outstanding trade relationship with Canada. We’ll be tweaking it,” he said, distinguishing Canada from Mexico. “It’s a much less severe situation than what’s taking place on the southern border.”

The president’s remarks prompted former Mexican President Vicente Fox and former U.S. Ambassador to Canada Bruce Heyman to question how a U.S. overhaul of Nafta could impact just one of the two other partners. That sentiment was shared back in Ottawa. “Let’s not fool ourselves,” opposition Conservative Leader Rona Ambrose told reporters. “Something is going to happen on trade.”

The prime minister’s meeting with Trump was also notable as much for what it didn’t include: sparring over refugees, climate change or any other issue that divides the 45-year-old Liberal and 70-year-old Republican.

“The two leaders have got off to a good working relationship,” John Weekes, a former Nafta negotiator now advising on trade issues at Bennett Jones LLP in Ottawa, told Bloomberg TV Canada. “This is very important.”

Bearing Gifts

It probably didn’t hurt that Trudeau laid on something of a charm offensive. He brought as a gift a photo from a 1981 speech Trump gave at a dinner honoring Trudeau’s father, Pierre, who also served as prime minister.

The Canadian leader nevertheless reiterated his country’s commitment to a welcoming immigration policy, attributing part of his refugee resettlement program’s success to support from American security agencies while stopping short of calling on Trump to open his own borders. “The last thing Canadians expect is for me to come down and lecture another country on how they choose to govern themselves,” the prime minister said.

“Trudeau actually did a really good job in holding firm to his values, Canadians’ values, but at the same time realizing it’s a critical relationship,” Bryden Teich, a portfolio manager at Avenue Investment Management in Toronto, told Bloomberg TV Canada. “The U.S. will look at Canada as a model relationship.”

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