Canada wants reciprocity in trade talks after U.S. ‘pocketed’ concessions

Washington State Park workers Casey Matheson, left, and Zac Carsten put up a new American flag in front of a Canadian flag they just replaced during scheduled maintenance atop the Peace Arch in Peace Arch Historical State Park Monday, Nov. 8, 2021, in Blaine, Wash. Photo by AP Photo/Elaine Thompson

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Canada’s new chief trade negotiator to the U.S. said she wants to see “some mutuality” from Washington in recognition of “significant” concessions it’s already made to address U.S. President Donald Trump’s grievances, as a review looms for the Canada-U.S.-Mexico Agreement.

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“The Canadian government has made some very significant — I would describe them as concessions — moves already,” said Janice Charette in her first major public remarks since Prime Minister Mark Carney appointed her to the role on Feb. 16.

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She cited the removal of a digital sales tax on U.S. tech giants, the withdrawal of many retaliatory tariffs that former prime minister Justin Trudeau had put in place, and changes and investments to improve border security.

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“So far it’s being pocketed,” she said. “And I think it will be important for us to see some mutuality in terms of the negotiating process.”

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Charette told a Canadian Chamber of Commerce summit in Ottawa on Tuesday that she anticipated trilateral talks, for instance on automotive rules of origin, with bilateral agreements in addition to the “underlying” deal.

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For progress on the CUSMA review, Canada wants to revisit Trump’s sectoral tariffs hitting key export sectors like steel, aluminum and autos, first.

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“Our ability to make significant progress on the sectoral tariffs is essential for us to get to a conversation around the CUSMA review process,” Minister for Canada-U.S. Trade Dominic LeBlanc told the Canadian Broadcasting Corp. in an interview on Tuesday, using the Canadian abbreviation for the trade deal.

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The two sides had been close to striking a deal for relief on the metals tariffs last year, but Trump terminated negotiations in October in retaliation for TV ads run in the U.S. by Canada’s province of Ontario, which quoted former President Ronald Reagan speaking against tariffs, LeBlanc said in a separate interview on CTV News.

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“We think the United States at one point will conclude that it puts inflationary pressure on a series of goods in the United States,” LeBlanc said to the CBC. “But the United States has to come to that conclusion themselves. When they do, good news, we’re ready with a series of very specific offers that we think will incentivize that movement.”

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‘Checkpoint’

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Charette said Canadians shouldn’t expect issues to all be resolved by July 1, a scheduled date for countries to review CUSMA. Parties are pursuing a comprehensive solution rather than a fast one, she said, stressing that the date is “a checkpoint — it’s not a cliff.”

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“We’re in a negotiating process, so you’re not going to hear a lot of public bouquets necessarily thrown our way,” she said. “Not all progress is going to be visible here.”

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If the countries agree to a renewal, the accord would remain in force for another 16 years. If that doesn’t happen, it could trigger annual reviews for a decade until the deal’s expiration in 2036. Any country could announce their intent to withdraw with six months’ notice.

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In consultations, stakeholders told officials that CUSMA is a “very good” deal and there is “no need to renegotiate” or make fundamental changes to it, Charette said.

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Trump has called the deal “irrelevant” and privately mused about quitting it, though he signed the pact in his first term and hailed it as a “colossal victory” at the time.

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