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Op-Ed: Trump’s remarks threaten U.S.-Canada NAFTA negotiations

Inflammatory Trump remarks upset US-Canada NAFTA negotiations

The Toronto Star received the “off-the-record” quotes from a source. The source, of course is not identified. Trump said that any deal with Canada would be “totally on our terms”. The remarks were also relayed to Canadian negotiators some of whom already had doubts that the US was making legitimate efforts to compromise. Canadian PM Trudeau’s officials met with Trump officials on Friday morning. Nothing has been reported on the outcome of the meeting. However, no agreement was reached on Friday.

Trump confirms the leaked off-the-record remarks were accurate

Trump says he was fine with the leak because now Canada knew his true feelings. Some even think that perhaps it was Trump himself who arranged for the remarks to be leaked. Trump also complained at length that the leaks were a breach of his trust.

Trump made his inflammatory remarks in an interview with Bloomberg News in the Oval Office on Thursday. He said that he was saying that he would make no compromises with Canada only off-the-record since it would be so insulting they would not be able to make a deal. Nevertheless when the comments leaked out he says this is fine with him. If he really wanted a deal then this makes little sense because he thinks the revelation of the comments would make a deal impossible for Canada.

Trump, as usual, conveys his thoughts via tweets: “Wow, I made OFF THE RECORD COMMENTS to Bloomberg concerning Canada, and this powerful understanding was BLATANTLY VIOLATED. Oh well, just more dishonest reporting. I am used to it. At least Canada knows where I stand!”

In another “off-the-record” remark Trump said he was always scaring the Canadians into submission by threatening to impose tariffs on imports of cars made in Canada. I am sure that not only Canada but the big three automakers based in the US would be scared of such threats. It remains to be seen if Trump would ever carry the threat out.

Bloomberg agreed to keep Trump’s remarks off-the-record

The Star however felt that it was not bound by any promises and decided that it would publish them after they became part of the negotiations. It turns out that Trump claimed not to be displeased that Canada was aware of his thoughts. This may support the view that it might have been Trump himself who leaked the quotes. It gives him an opportunity to criticize the press as well,

In a speech in Charlotte later, Trump said: “These are very dishonourable people. But I said, in the end it’s OK, because at least Canada knows how I feel. So it’s fine. It’s fine. It’s true.”

PM Trudeau and Foreign Affairs Minister Freeland ignore Trump’s remarks

Trudeau’s response was bland as he claimed that Canada would sign a deal only if it were a good deal for Canada, Neither he nor Freeland would respond directly to Trump’s inflammatory remarks.

How will Trump’s remarks affect the trade talks?

Simon Lester, of the Cato Institute said: “I suspect that the negotiators on both sides are mostly focusing on the issues, not the rhetoric. Of course, as part of their own strategy, they each might bring up Trump’s comments. All of this is uncharted territory in trade negotiations, though, so nothing would surprise me.”

Eric Miller, president of a US-Canada consultancy noted Trump’s remarks will be in the background of the remainder of the negotiations on NAFTA. He also thought that the revelation could be harmful both to the Canada and the US: “For Canada, it will enhance the scrutiny the government will face about any outcome,” Miller said. But it is also “damaging” to the U.S., he said, because it appears to reveal their strategy, “and when it comes to the end, if each party is saying that it’s a good deal that’s a much easier sell in every country than if some parties are facing persistent questions about whether they were rolled.”

Trump thinks Canada must make a deal

On the record Trump told Bloomberg that a deal was close and could even happen by Friday though it could take longer. Trump said that Canada ultimately had no choice but to make a deal. However, Canada can simply walk away from the table and hold off any new deal until Trump is gone and negotiate with a new president and a new administration. Given the bullying tactics and boasting of Trump Trudeau may find it difficult to come to an agreement with Trump now. Trump may actually be willing to compromise to some degree to give Trudeau a means of selling any agreement but the public is likely to be skeptical that any agreement is actually in Canadian interests.

No matter what happens they will probably be right as NAFTA is basically an agreement on the rights of global corporations rather than a free trade deal. There is no discussion of the proportionality clause or other key issues that are important for the welfare of Canadians.

Reasons why Canada should walk away from negotiations

It is questionable whether it is wise to negotiate with Trump who refuses to compromise, who threatens Canada to reach a deal, and who cannot be trusted since he constantly lies and changes positions. However, there are good policy reasons not to negotiate on NAFTA as well. There are key provisions that are damaging to Canadians that are not even on the table for bargaining. Three of these were addressed in a Digital Journal article last July.

The proportionality clause is discussed in detail in a Rabble article: “Proportionality is “unique in all of the world’s treaties,” writes Richard Heinberg, a noted California energy expert. Cyndee Todgham Cherniak, aToronto trade lawyer, says the energy chapter is unique for a trade agreement. There are only three free trade agreements in the world that have energy chapters, and the other two don’t have NAFTA-like proportionality clauses. It’s unclear how many other countries the U.S. has tried to impose an energy proportional sharing chapter on, but it is clear none has bitten. Heinberg concludes that “Canada has every reason to repudiate the proportionality clause, and to do so unilaterally and immediately.”

As noted in a Digital Journal article: “The clause requires that if the government of any member of the agreement cuts energy available for export to another country it must cut the supply to the same extent domestically. In other words we cannot give preference to Canadians when supplying them from their own resources.” Other objections to staying in NAFTA can be found in this Digital Journal article.

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