In Spite of Trump’s TPP, Nafta Moves, Optimism Emerges in Canada

Signs of optimism emerged from Justin Trudeau’s government that it can escape the upheaval relatively unscathed on a day when Donald Trump backed out of one trade deal that included Canada and pledged to reopen a second.

With Trump atop the agenda, Trudeau’s cabinet is meeting in Calgary. To decode Trump’s trade agenda as he bowed out of the Trans-Pacific Partnership and took another step toward reworking the North American Free Trade Agreement, the lawmakers hosted Stephen Schwarzman, chief executive officer at Blackstone Group LP and head of the president’s strategic and policy forum.

Schwarzman emerged singing Canada’s praises and urging Trudeau not to panic  and flew in for the briefing before returning to New York.

“I don’t think he should be enormously worried because Canada is held in very high regard,” he said. He added that new border taxes could be exempted for Canada as Canada has a “special status”.

imposing new border tariffs or making tax changes in the U.S. that would put exporters in the northern country at a disadvantage and revamping Nafta are included in Trump’s trade plan and Canadian executives and policy makers have been on tenterhooks awaiting details of his trade plan. In 2015, the total trade between the two countries was $541 billion.

the Schwarzman visit left the Canadian ministers cautiously optimistic as they wrapped up their first day of meetings as Mexico’s president struck a bold tone and called for no new tariffs.

“It was a very positive tone, a very positive conversation and very constructive,” Innovation Minister Navdeep Bains said. He added that he isn’t jumping to conclusions. With Canada the top buyer of U.S. goods, Schwarzman’s visit underscored the strong ties.

“We’re very fortunate to be in that position. We don’t take it for granted, and we’ll continue to make sure we talk about the integrated nature of our economies,” he said. “I think it’s still early stages, right? This is like day two of the early administration? So I think we have to be mindful of that. They have a lot on their plate.”

By appointing a former Houston-based astronaut, Transport Minister Marc Garneau, to chair the cabinet committee on U.S. ties, assigning retired general Andrew Leslie as her deputy with a Trump-specific mandate and appointing Chrystia Freeland as foreign minister, Trudeau has reorganized his team to better deal with Trump.

Schwarzman “gave us his view on the lay of the land, and it was a very encouraging one,” Garneau told CTV. “I think that the relationship between the new Trump administration and Canada is going to be a very good one.”

David Wilkins, a former U.S. ambassador to Canada under George W. Bush’s administration said that Trump is focused on countries like Mexico and China, with which the U.S. has large trade deficits.

“My view has always been that Canada does not take jobs from the U.S. — Canada and the U.S. together create jobs, and I think that will continue,” Wilkins said in an interview, saying he thinks Nafta will bend but not break. “Perhaps it’s time for a fresh look at it, but I think at the end it will remain in effect.”

(Adapted from Bloomberg)

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Categories: Economy & Finance, Geopolitics, Strategy

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