Canada Makes New US Trade Proposals But Warns ‘Turbulence’ Ahead

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(Bloomberg) — Canada made new and detailed proposals on trade to the US based on negotiating progress in recent weeks, said Canadian cabinet minister Dominic LeBlanc.

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“A strong, prosperous Canadian economy is good for North America, and we discussed how we can work together on a number of issues that strengthen the competitiveness of the North American economy,” he said at a press conference in Washington after a meeting with US Trade Representative Jamieson Greer.

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Prime Minister Mark Carney’s government is under pressure to show that it’s making strides in talks with the Trump administration, as Mexico has already begun bilateral negotiations with the US on renewal of the US-Mexico-Canada Agreement, or USMCA. 

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LeBlanc refused to share details of the proposals but downplayed suggestions that Canada was being left behind Mexico. Discussions with US policymakers will continue in the coming days — but he also warned that talks could still take a negative turn and that “turbulence” is to be expected. 

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“All of us know that the road to conclusions in these conversations is sometimes not a straight line,” said LeBlanc, a longtime politician and senior cabinet minister who’s responsible for Canada-US trade. 

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He emphasized several times that the USMCA pact simply continues if not renewed by July 1, though it’s thrown into a process that may amount to years of rolling negotiation and even possible expiry in 2036.

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Canada’s chief trade negotiator, Janice Charette, also attended the meeting with Greer. 

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Tuesday’s meeting was preceded by a social media post from US President Donald Trump in which he reprised his description of Canada as a “51st state,” while highlighting a Bloomberg News story that Canada’s economy had dipped into a technical recession. Trump’s post was also shared by the US ambassador to Canada.

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As an example of potential setbacks, LeBlanc said Canada has been preparing for the possibility of more US tariffs. The administration started new trade investigations against a number of countries in March, including Canada. The Canadian government has shared information to try and address US concerns, LeBlanc said — stressing its commitment to issues like fighting forced labor, for instance. 

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LeBlanc said Canada once again made its argument against US tariffs imposed on key industries: autos, steel, aluminum and softwood lumber. 

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Earlier on Tuesday, Carney said the US-Mexico negotiations started first because those countries have more to discuss. The US has about 60 technical trade issues with Mexico compared with about 30 for Canada, Carney told reporters before a meeting of his cabinet in Ottawa.

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The prime minister said Canada is particularly focused on addressing Trump’s sectoral tariffs. And he confirmed the White House has been pushing for new rules on auto production that would require at least 50% US components for vehicles manufactured in the North American trade zone. He didn’t endorse that position, but noted that Canadian-built cars already meet that threshold, on average.