[CTC] Trudeau heads to Washington as Trump pushes protectionist demands

[Arthur Stamoulis]

https://beta.theglobeandmail.com/news/world/trudeau-heads-to-washington-as-trump-pushes-protectionist-demands/article36525511/?ref=http://www.theglobeandmail.com& <https://beta.theglobeandmail.com/news/world/trudeau-heads-to-washington-as-trump-pushes-protectionist-demands/article36525511/?ref=http://www.theglobeandmail.com&>
 
Trudeau heads to Washington as Trump pushes protectionist demands

RYAN REMIORZ/THE CANADIAN PRESS
LAURA STONE ADRIAN MORROW
OTTAWA AND WASHINGTON
38 MINUTES AGO OCTOBER 9, 2017
Prime Minister Justin Trudeau flies to Washington this week to meet with Donald Trump at the White House and testify before a key congressional committee amid growing concern the U.S. President's protectionist trade demands could cause NAFTA talks to collapse.

The visit comes as Canada braces for tough American demands on dairy and a U.S. content requirement for autos in the North American free-trade agreement renegotiation, and on the heels of punishing tariffs <https://beta.theglobeandmail.com/report-on-business/us-rules-against-bombardier-in-boeing-trade-feud-imposing-duties-of-220/article36405482/?ref=http://www.theglobeandmail.com&> imposed on Canadian plane maker Bombardier and softwood lumber producers.

Mr. Trudeau will meet with the President in the Oval Office on Wednesday, the same day he appears before the powerful House of Representatives Ways and Means committee on Capitol Hill. The committee has jurisdiction over all taxation and tariffs and is responsible for implementing any changes to NAFTA. Mr. Trudeau will hold a solo news conference at the Canadian embassy; one source said Mr. Trump did not have time in his schedule for a joint media appearance.

The fourth round of NAFTA talks also starts on Wednesday in Arlington, Va., across the river from Washington. Mr. Trump's negotiating team has taken a hard line, demanding at the last round that Canadian companies receive fewer American government contracts and angling to put even more severe measures on the table.

Mr. Trudeau is expected to speak with Mr. Trump about the free-trade negotiations, the dispute over Bombardier's C Series jets – in which the Trump administration is imposing punitive duties that make it impossible to sell the planes in the United States – and the gridlocked talks over softwood lumber, sources with knowledge of the planned discussions said.

Officials, speaking on condition of anonymity, acknowledged that Canada is getting slammed with hard protectionist proposals at the bargaining table and needs to find some resolution with Mr. Trump.

Canada believes Mr. Trudeau's visit will help push negotiations in the right direction, the sources said. Ottawa insists it has to keep up the outreach program, both to the White House and outside it, that it has been conducting all year in order to remind the Americans of how much their economy relies on that of Canada.

Mr. Trudeau will be accompanied to Washington by his wife, Sophie Grégoire Trudeau, as well as Foreign Affairs Minister Chrystia Freeland and parliamentary secretary Andrew Leslie.

On Thursday, Mr. Trudeau will travel to Mexico City to talk trade with outgoing President Enrique Pena Nieto, during the Prime Minister's first official visit to Mexico. Mr. Trudeau will also honour the victims of the country's recent earthquake, attend an official dinner and address the Mexican Senate on Friday. International Trade Minister François-Philippe Champagne will join Mr. Trudeau and Ms. Freeland in Mexico.

Mexico's ambassador to the United States, Geronimo Gutierrez, told The Globe that Mexico still hopes to improve NAFTA. But he said the country is prepared to walk away from talks if it can't get a good deal.

"Mexico's position will continue to be serious and constructive, but we have also been very clear about the fact that we rather leave the negotiating table than [accept] a harmful deal," he said.
U.S. Agriculture Secretary Sonny Perdue said last week that he expected the administration will throw down some specific demands for loosening Canada's supply management system for dairy, eggs and poultry, which fixes prices and keep foreign imports out.

Mr. Perdue said supply management is "very unfair" and he's not happy that so little progress has been made in NAFTA talks so far. "If you've ever watched a boxing match, they circle one another for a while, and I think we've been circling," he said.

The Trump administration is also quietly floating a proposal to include a 50-per-cent U.S. content requirement for autos, as well as increasing the North American content from 62.5 per cent to 85 per cent, a source said. Canadian officials said there have been no formal proposals on auto content so far.

Jerry Dias, president of Unifor, which represents Canadian auto workers, said the Trudeau government won't agree to 50-per-cent U.S. content, or a sign onto a deal that doesn't include improved labour standards in Mexico. He said strict content requirements won't have an impact without raising the 2.5-per-cent tariff on vehicles imported to the United States outside NAFTA, because auto makers could still move their operations to Mexico, where labour is much cheaper.

"Canada will never accept that the U.S. automatically gets 50 per cent of the industry based on rules of origin. Nobody will ever agree to that under any circumstances," he said.

"Justin [Trudeau] ought not to be afraid to say to Trump, that, listen, we are quite comfortable walking away from a lousy deal. This isn't you in control."

The top business lobby group in the United States has already issued an extraordinary public warning that Mr. Trump's tough stand in negotiations risks destroying NAFTA and swiftly throwing hundreds of thousands of Americans out of work.

"It would be an economic and political debacle," John Murphy, the U.S. Chamber of Commerce's senior vice-president for international policy, said at a roundtable last week.

"There's an old adage in negotiations: 'Never take a hostage you wouldn't shoot.' Withdrawal from NAFTA is an unacceptable proposition, so we're urging the administration to recalibrate its approach."

The Trudeau government is trying to play down concerns that Mr. Trump is prepared to pull the plug on NAFTA, with officials insisting Mr. Trudeau's second visit to the White House will be used to bolster the two leaders' relationship on a variety of fronts, including trade.

"The trip is an opportunity for the Prime Minister to strengthen and secure the very strong relationships that we have both with the United States and with Mexico, two key trading partners," said Cameron Ahmad, a spokesman for the Prime Minister's Office.

He insisted the trip is "not motivated by NAFTA," but that Mr. Trudeau was scheduled to speak at Fortune's Most Powerful Women Summit in Washington on Tuesday evening. The Prime Minister will also hold a roundtable on gender equality and education.

Maryscott Greenwood, senior adviser to the Canadian-American Business Council, said the Trudeau government's so-called charm offensive in the United States is proving useful.

"It's having an effect in terms of increasing the understanding and awareness level in the United States among policy makers and thought leaders about how integrated our economy really is," she said.

"I have to give the Trudeau government a lot of credit. So far, they're pitch perfect, and that is not easy given their dance partner."

https://beta.theglobeandmail.com/opinion/trudeaus-washington-mission-dont-play-cute-with-trump/article36521240/?ref=http://www.theglobeandmail.com& <https://beta.theglobeandmail.com/opinion/trudeaus-washington-mission-dont-play-cute-with-trump/article36521240/?ref=http://www.theglobeandmail.com&>
 
Trudeau’s Washington mission: Don’t play cute with Trump

LAWRENCE MARTIN <https://beta.theglobeandmail.com/authors/lawrence-martin>
WASHINGTON
SPECIAL TO THE GLOBE AND MAIL
21 HOURS AGOOCTOBER 8, 2017
When Prime Minister Justin Trudeau meets here with U.S. President Donald Trump on Oct. 11, the stakes are high.

The Canadian side is entering this little summit with barely concealed animosity. Officials will tell you – and indeed a case can be made – that Ottawa is facing the most protectionist American administration since the 1930s.

The North American free-trade agreement talks, to be blunt, are failing. There have been three rounds. They're at the halfway point. They're stalled. On the separate softwood lumber issue, there is what Ottawa sees as complete intransigence on Washington's part. A third great bilateral bone of contention is the outrageous duties <https://beta.theglobeandmail.com/report-on-business/trump-administration-punishes-bombardier-with-another-import-duty/article36515124/?ref=http://www.theglobeandmail.com&> levied against Montreal-based Bombardier on aircraft sales.

Deciding to let things fester no longer, Mr. Trudeau set up the Oval Office meeting. The intent is for him to be pointed with Mr. Trump, more pointed than in previous talks. Bringing things to a head with the most mercurial, volatile President anyone can remember can be risky business.

Not to worry, says David MacNaughton, our unflappable Washington ambassador. The two leaders have built a positive, constructive rapport. Given that relationship, acrimony is unlikely. There won't be a feud along the lines of a Pierre Trudeau and Ronald Reagan, or a Lester Pearson and Lyndon Johnson. "The risk is only if they don't keep talking."

On NAFTA, what Ottawa is looking for, the ambassador says, is clarity. There are so many mixed signals as to what the United States wants. The big complaint entails trade deficits particularly as they relate to manufacturing. But from Ottawa's standpoint, it makes no sense. The ambassador reminded the Americans recently that they have a $34-billion surplus with Canada on manufactured goods. He cheekily wondered what they are prepared to do about it.

Asked if there has been a response, he said, "I'm still waiting." If they are really concerned about that issue, "they should have absolutely no concerns about Canada. Quite the contrary, the concerns should be on our side."

Mr. Trudeau might well ask Mr. Trump, "Where is the problem with Canada?" Ottawa is convinced it is mainly with Mexico. An official put a number on it, saying "it's 95 per cent Mexico." The Prime Minister moves on to meet the Mexican President after the Trump bilateral.

On the dispute with Boeing, tempers will be tested. Ottawa has no intention, officials say, of taking the hit, of sitting back and watching the U.S. Department of Commerce and Boeing driving Bombardier, our largest industrial company, into the ground. There will be no backing down on Ottawa's retaliation threat – withdrawing plans to purchase billions worth of Boeing fighter jets.

What will Mr. Trump say to that?

On NAFTA, an issue where some common ground might be found, says Mr. MacNaughton, is on rules of origin. The Trump administration recently released a study, one which Ottawa disputes, showing that U.S. value-added content is significantly declining for manufactured goods, particularly auto parts, imported from Mexico and Canada. Ottawa is concerned that if the issue isn't addressed properly, the effect might be to drive production out of North America. "It's not that we're having a big fight with them about this," says the ambassador. "It's about understanding what it is they are actually trying to achieve."
There have been three rounds and so much is still so vague and there are few doubts as to where the fault lies. If NAFTA negotiations continue to flounder and no agreement is reached, it's back to the status quo. That's not so bad for the Canadian and Mexican sides and not so bad for a great many American stakeholders. But it is not something, given all his ranting and raving about the trade agreement, that Mr. Trump can accept.

No agreement could drive him to play, as he has threatened, the killer card: withdrawal from the accord. Mr. Trudeau can't play cute. He has to convince him that this would be crazy, as crazy as the levies against Bombardier, as crazy as hewing to 1930s-styled protectionism in the 21st century.


-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20171009/4380630b/attachment-0001.html>