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

AJOT, By: Josh Wingrove | Jan 24 2017

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

Trudeau’s cabinet is meeting in Calgary with Trump atop the agenda. The lawmakers hosted Stephen Schwarzman, chief executive officer at Blackstone Group LP and head of the president’s strategic and policy forum, on Monday 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.

Schwarzman flew in for the briefing before returning to New York, and emerged singing Canada’s praises and urging Trudeau not to panic. “I don’t think he should be enormously worried because Canada is held in very high regard,” he said, adding Canada has a “special status” that could exempt it from new border taxes.

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

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

‘Early Stages’

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

“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.”

Patty Hajdu, Trudeau’s Employment Minister, said the briefing is a sign Trump’s team views Canada in a positive light. “They did not have to send anyone here to speak to us.” Trade Minister Francois-Philippe Champagne praised Schwarzman for his “very deep understanding of the relationship between the United States and Canada.” As for the TPP, he said Canada is weighing how to proceed.

‘Very Encouraging’

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

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.”

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

“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.”