Canadians have 'some obligation' to protect our businesses by buying from them: Frank McKenna
While the new North American Free Trade Agreement is a significant milestone, it will not be immune to the whims of one of its members in particular, according to a former Canadian ambassador to the United States.
“Nobody should declare … that we’re going to have peace in our time,” Frank McKenna said in an interview with BNN Bloomberg’s Jon Erlichman Tuesday.
“As long as the United States is going through this political crazy season, that won’t happen. The United States still has other weapons available,” he said.
His comments come one day before the new trade deal between Canada, the U.S. and Mexico takes effect on July 1 — more than six months after the three countries signed off on the deal in December.
Getting to this point was no small feat, said McKenna, who is also a former premier of New Brunswick and deputy chair of wholesale at TD Bank.
“If anything, the U.S. has become even more protectionist, the president in many ways even more irrationally lashing out at friend and foe alike. So for us to have a rule-of-law trade deal that protects $1.6 trillion in trade between the three countries is a monumental achievement,” he said.
But, McKenna cautioned, the deal comes with caveats.
“This trade deal protects and provides guardrails for 99 per cent of trade. It doesn’t fix softwood lumber, which is an ongoing dispute. And it doesn’t prevent the United States from using Section 232 … arbitrarily as they did in the past on steel and aluminum,” he said, referring to a legal measure designed to protect the U.S. against its competitors on national security grounds.
Last week, Bloomberg News reported that the Trump administration is considering re-imposing tariffs on imports of Canadian aluminum.
McKenna said the U.S. has renewed this threat despite pushback within its own borders.
“This would increase the cost of production for a lot of companies that use steel and aluminum products,” he said.