The decision to reverse provincial bans on U.S. alcohol may be the reason why Canada reaches a last-minute deal with the U.S., says Lisa Raitt, member of the Advisory Committee on Canada-U.S. Economic Relations.
She says U.S. President Donald Trump has made it very clear that he views the removal of American alcohol from Canadian store shelves as a discriminatory measure, and as a result, threatened 50 per cent tariffs on vulnerable industries.
“You have to do whatever you can to ensure that that didn’t happen and that doesn’t happen tonight,” Raitt, also the former deputy leader of the Conservative Party of Canada, told BNN Bloomberg.
“Asking the premiers to reverse their booze bans, I do believe, is an important part of the entire deal.”
Her comments come after Prime Minister Mark Carney asked premiers to put U.S. alcohol back on their shelves to help finalize a pending trade agreement and avert looming American tariffs set to take effect Friday night unless a deal is reached.
She says while the alcohol ban imposed in retaliation to Trump’s first round tariffs on Canada’s steel and aluminum, was effective in getting U.S. attention, “it had its time.”
“The reality is that the leverage on this negotiation going around really did come from the U.S.,” says Raitt.
She says tariff pressure forced the two countries into important negotiations that have likely yielded results and “hopefully a deal that both sides can live with and can prosper with going forward.”
She says whatever deal Canada ends up agreeing on during that extended negotiation period, is better than absorbing the 50 per cent tariffs.
“You’re better to have an agreement, than not have an agreement,” says Raitt.
She says even if Trump changes his mind in the future, that doesn’t negate the importance of businesses having stability now.
“I do believe that it’s the industry and the sectors that will make sure that both sides keep their bargain, and that the flow of goods will continue across the border, and investment will continue across the border,” says Raitt.
She also adds that reaching a trade deal with the U.S. is not enough to protect the economy and Canada must also reform its internal policies so investing in Canadian businesses becomes more attractive than the U.S.
While Canada enjoys the best access to the American markets, she says it’s important to diversify its economy and there is already a lot of buzz around the inaugural Canada Investment Summit, organized by Carney’s government.
The goal of the summit is meet with global investors and attract $1 trillion in economic, energy and infrastructure projects.
“He (Carney)understands and knows that we need to drive our economy in a new direction. That new direction being diversification, not only geographically, but in terms of the kinds of things we do in this country,” says Raitt.
