What's next for NAFTA 2.0 as tariff threat subsides
Foreign Minister Chrystia Freeland reiterated Canada wants to move in tandem with the U.S. on ratifying the new North American trade agreement, while declining to comment on whether it will happen before parliament breaks for the summer.
“We’re moving ahead, I think we’re on the right track and I think it is absolutely the right approach for Canada to intend to move in tandem with our partners, especially with the U.S.,” Freeland told reporters in Washington, after two days in the U.S. capital. “We think of it as a kind of Goldilocks approach: not too hot, not too cold. We’re not going to go too fast, we’re not going to go too slow.”
Freeland’s visit comes a week before Prime Minister Justin Trudeau is set to meet President Donald Trump in Washington. There is a sense of urgency in Canada because the country’s legislature is scheduled to break for summer at the end of this month and not return until after elections in October.
The foreign minister wouldn’t comment on whether she expected the deal would pass parliament before the summer break, or whether there are any plans for an emergency summer session to ratify it if needed.
Trump’s abrupt threat earlier this month to slap tariffs on all Mexican goods over unrelated border-security concerns had threatened to derail ratification of the USMCA, an update to the 25-year-old North American Free Trade Agreement between the U.S., Canada and Mexico. While Trump backed down from enacting the tariffs after the Mexican government agreed to do more to stem the flow of Central American migration, the president could revive the planned tariffs if he doesn’t see adequate progress.
While in Washington, Freeland met Secretary of State Mike Pompeo, Senator Bob Menendez, the top Democrat on the Senate foreign relations committee, and Senate Finance Committee Chairman Chuck Grassley. The Republican from Iowa had been a key advocate in the removal of tariffs on Canadian and Mexican steel and aluminum last month, and led a push-back against the threatened Mexican levy threat.
The White House has called on U.S. House Speaker Nancy Pelosi to bring a vote on the USMCA trade deal to the floor.
White House economic adviser Larry Kudlow said Thursday he’s optimistic the trade deal will get through Congress. “I’m very keen on the economic growth impact, or the potential growth impact, of the USMCA trade deal,” Kudlow said at an event at the Peterson Institute for International Economics in Washington.
Aside from the USMCA, Trump’s trade policies and his feud with China will likely dominate the agenda during Trudeau’s visit. Canada has been on the front lines of that battle since Canadian authorities arrested Huawei Technologies Co. Ltd. Chief Financial Officer Meng Wanzhou in Vancouver late last year over a U.S. extradition request.
The U.S. has sided with Canada and called for China to release two Canadians, Michael Kovrig and Michael Spavor, that Beijing seized 10 days after the tech executive’s arrest in Vancouver. Trump has also mused that Huawei, and Meng specifically, could be included in any trade deal with China, undercutting Trudeau’s assurances that the extradition process is free from political interference.
The Group of 20 summit in Osaka, Japan, later this month will also likely come up during the Trump-Trudeau meeting. On Tuesday, Trump threatened to raise tariffs if President Xi Jinping doesn’t meet with him at the G-20. The president said Wednesday he had no deadline for China to return to trade talks that collapsed last month amid U.S. accusations that Beijing had reneged on commitments in a tentative accord.