LA MALBAIE, QUE. (NEWS 1130) – The Trudeau government has told President Donald Trump he needs to get rid of the punishing US tariffs on Canadian steel and aluminum if there is any hope of successfully renegotiating the North American Free Trade Agreement.
— Cormac Mac Sweeney (@cmaconthehill) June 9, 2018
Finance Minister Bill Morneau said that message was communicated clearly to Trump during his meetings at the G7 summit with fellow leaders, and in his face-to-face talk with Prime Minister Justin Trudeau.
Before departing the G7 summit in Quebec on Saturday, Trump said he wants to make a deal on NAFTA, and he’s open to working with the current pact or striking separate agreements with Canada and Mexico as long as they agree to renegotiate every five years.
Canada wants a deal too, but the Trudeau government views the US’s proposed five-year sunset clause as a non-starter.
Prime Minister @JustinTrudeau says “there will not be a sunset clause.” That is the opposite of what President @realDonaldTrump said earlier today when he told reporters there will be a sunset clause on NAFTA #G7Summit
— Cormac Mac Sweeney (@cmaconthehill) June 9, 2018
And now, Morneau added the tariffs to Canada’s list of deal breakers on NAFTA. He said progress is being made, but more work needs to be done to conclude the negotiations.
“We’re not going to be able to do that work under the threat of tariffs. And we’re not going to be able to do that work when our retaliatory tariffs, which are real, they’re significant,” Morneau said in a Saturday interview.
The government announced it would impose more than $16.6-billion in retaliatory tariffs, effective July 1, on a variety of US goods. Mexico and the European Union have also planned retaliatory tariff packages.
Trump said that would be a bad idea.
“If they retaliate, they’re making a mistake,” he said.
“They do so much more business with us than we do with them … the numbers are so astronomically against them… we win that war a thousand times out of a thousand.”
Morneau said the tariff retaliation would cause “increasing friction” that would impede progress on NAFTA, but added there is a need “to step back from that destructive action so that we can actually get to the real work.”
Morneau said he is engaged in intense talks with his US counterparts in the hopes of finding a way forward.
Trudeau and the other G7 leaders used their meeting to try to persuade Trump to abandon the tariffs, which affect all of America’s G7 allies.
Trump said they are based on legitimate national security concerns, and he said he stood firm against the concerns of his fellow G7 leaders during their talks.
Once again, he emphasized that the days of the US getting the short end of the stick in its trading relationships with the world were over under his watch.
And he made clear that extends to the current deal the US is renegotiating with its continental neighbours, Canada and Mexico.
“We’re either going to have NAFTA in a better negotiated form or we’re going to have two deals,” the US president said.
But by insisting on re-negotiating every five years, Trump is diametrically opposed with Canada, which says the sunset clause would create perpetual uncertainty and harm long-term investment.
Disagreement over the sunset clause was the deal breaker that scuttled a possible meeting between Trump and Trudeau in Washington late last month in an attempt to bring the NAFTA talks to a conclusion.
Vice President Mike Pence told Trudeau he would have to agree to that before Trump would agree to meet him.
Trudeau refused, and the meeting was off. But the lead ministers from both countries talked trade on the sidelines of the G7 leaders’ meeting on Friday.
“On NAFTA we either leave it the way it is as a three-some deal with Canada, the United States and Mexico and change it very substantially — we’re talking about very big changes. Or we’re going to make a deal directly with Canada, directly with Mexico,” Trump said Saturday.
“If a deal isn’t made, that would be a very bad thing for Canada and a very bad thing for Mexico. To United States, frankly, it would be a good thing but I’m not looking to do that. I’m not looking to play that game.”
Trump repeated his criticism of Canada’s supply managed dairy industry, one of his favourite targets in Twitter posts, including this week prior to his arrival in Canada.
“Let’s say Canada, where we have tremendous tariffs. The United States pays enormous tariffs on dairy. As an example, 270 per cent, nobody knows that.”
Pierre Lampron, the president of Dairy Farmers of Canada, shot back at Trump’s claims about his industry.
“President Trump is targeting the dairy sector because he wants to dump U.S. dairy into Canada,” Lampron told The Canadian Press, adding that Canada imports five times more dairy from the US than it exports.
“President Trump wants nothing less than wiping out Canadian dairy farming.”
Meantime, Justin Trudeau says the countries have agreed to a joint communique at the conclusion of the alliance’s leaders’ summit.
Speaking at his closing news conference, Trudeau says the G7 has agreed to an “ambitious” communique but he did not immediately release a document or provide details of where the exclusive club of wealthy democracies found common ground.
Heading into the leaders’ summit in La Malbaie, Que., there were deep concerns the G7 alliance was fast becoming a G6 plus one because of a widening gulf between the US and the rest of the group in key areas such as climate and trade.
Trudeau says five of the G7 countries agreed to a plastics charter to further protect the environment and oceans.