NAFTA smackdown

The Trump press conference at the UN on Wednesday was a remarkable event, partly because Trump rarely dares to face the media on his own, and partly because at times he managed to sound almost coherent and competent.  Among the many topics he covered was the state of NAFTA negotiations with Canada, and he had nothing positive to say.  Asked to comment on reports that he had turned down a sideline meeting* with Justin Trudeau, Trump responded:

“Yeah, I did. Because his tariffs are too high and he doesn’t seem to want to move and I’ve told him forget about it.   And frankly we’re thinking about just taxing cars coming in from Canada. That’s the motherlode. That’s the big one.

We are very unhappy with the negotiations and the negotiating style of Canada. We don’t like their representative very much.” 

A lot of this -- the high tariff complaint, the threat to impose auto tariffs -- is just the standard Trump rhetoric, but the complaint about Canada's negotiating style and about "their representative" is new.  Canada's chief representative at the NAFTA talks is Foreign Affairs Minister Chrystia Freeland, and there have been rumours in the past about friction between her ad her US counterpart, Robert Lighthizer.

Freeland comes across in interviews as arrogant, strident and smug.  A quick review of her bio would suggest that there was never much reason to suppose she'd be up to this job.  She has had a relatively successful career as a journalist, but she is new to politics and has no background in diplomacy, trade or negotiation.    

Freeland and her boss, Justin Trudeau, have maintained a remarkably insouciant attitude to the NAFTA renegotiations from the start, when they tabled an opening bargaining position that was heavy on gender equality and indigenous rights but rather light on specifics regarding trade.  One can only imagine the raised eyebrows that produced in the White House -- and for that matter in Mexico City.

Freeland and Trudeau have stated all along that they will not sign "a bad agreement for Canada", but it appears that they do not understand what the choices are here.  It is as if they believe that Canada has a choice between remaining in the current deal, negotiating the so-called "win-win-win" deal with the US and Mexico, or abandoning NAFTA and trading with the US under the benign aegis of the World Trade Organization.  

The fact is that NAFTA as we have known it is dead, and if Canada cannot sign up to a deal comparable to that agreed between the US and Mexico, Trump will not be bound by WTO rules.  His tariffs on steel and aluminum, and the repeated threats of auto tariffs, should surely have made that clear.

It may be that once the provincial election in Quebec is out of the way next week, fresh progress will suddenly be possible again. That Province's dairy farmers are fiercely protective of Canada's supply management system, one of Trump's major targets.  However, a variety of media reports suggest that there remain numerous areas of disagreement beyond dairy, including dispute resolution and protection of Canada's cultural sector (again an issue with the most resonance in Quebec).  It makes you wonder what they've actually been talking about for the past year and more -- and wonder also  whether Trump may actually have a point about Canada's negotiating style.  

* Trudeau's representatives have denied that a meeting with Trump was ever requested, but this may not be entirely true. Before heading down to New York, Trudeau told the media that a sideline meeting on NAFTA was very likely to happen.