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Josh Wingrove and Greg Quinn Bloomberg
The U.S. and Canada are signalling most of the pain from reworking the North American Free Trade Agreement (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.
“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.”
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 side-swipe them. About 70 per cent 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 signalled Canada has “special status” and there was a “very low” risk of damage spilling north.
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.
Meanwhile, Trump-style politics are looming larger in Canada. Trudeau cancelled a trip to the World Economic Forum in Davos, Switzerland, in favour 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.