Trump expects only ‘tweaking’ of trade relationship with Canada

Washington | Reuters — U.S. President Donald Trump said on Monday the country would be “tweaking” its trade relationship with Canada, stopping short of calling for a major realignment in a development likely to please visiting Canadian Prime Minister Justin Trudeau.

Trump has pledged to renegotiate the North American Free Trade Agreement (NAFTA) linking the economies of the U.S., Mexico and Canada to make the terms more favorable to Americans.

At a joint news conference with Trudeau after White House talks, Trump said his biggest concern with NAFTA was the U.S. trade relationship with Mexico, which he has frequently accused of stealing American jobs.

“We have a very outstanding trade relationship with Canada. We’ll be tweaking it,” Trump said.

“It’s a much less severe situation than what’s taking place on the southern border. On the southern border, for many, many years the transaction was not fair to the United States,” he said.

Trump said the U.S. and Canada were stronger when they joined forces in matters of international commerce, and both countries benefited from having more jobs and trade in North America.

“We should co-ordinate closely — and we will co-ordinate closely — to protect jobs in our hemisphere and keep wealth on our continent, and to keep everyone safe,” Trump said.

Trudeau carefully steered around questions about the Canadian trade relationship with the U.S. in what was his first meeting with the new president. He said he expected each country to always remain each other’s most essential partner.

“There have been times where we have differed in our approaches and that’s always been done firmly and respectfully. The last thing Canadians expect is for me to come down and lecture another country on how they choose to govern themselves,” Trudeau said.

Trump’s vow to renegotiate NAFTA has unnerved Canadian officials, even though he has singled out Mexico in his criticism of the free trade deal. Canada sends 75 per cent of its exports to the U.S.

Canadians have become more supportive of NAFTA since Trump’s election victory on Nov. 8, a poll from the Angus Reid Institute showed on Monday. Forty-four per cent of the 1,508 surveyed said NAFTA had benefited Canada, up from 25 per cent from a poll last June.

Trudeau, when asked about Canadian firms’ concerns about possible changes to NAFTA, said: “It is a real concern for many Canadians because we know our economy is very dependent on our relationship with the United States.

“Goods and services do cross the border each day…we have to allow this free flow of goods and services and we have to be aware of the integration of our economies.”

Trudeau had a strong rapport with former Democratic President Barack Obama, prompting pundits to describe their relationship as a “bromance.”

Soon after Trump put a hold on allowing refugees into the U.S. and temporarily banned travelers from seven Muslim-majority countries in an executive order on Jan. 27, citing the need to head off attacks by Islamist militants, the Canadian prime minister took to Twitter to say refugees were welcome in Canada.

‘Huge win’

Analysts said Trudeau, who has strong incentives to build a relationship with Trump given rising anti-trade sentiment, is bound to be happy with the first meeting.

“I thought it was a huge, huge win. The worst-case scenario is we wound up with an Australia moment, when a relationship that should be on solid ground takes a bad turn,” said Carlo Dade, director of the Centre for Trade and Investment Policy at the Canada West Foundation.

“Instead, we actually got an endorsement of North American jobs, of Canada-U.S. jobs, working together, no “America First” — just the opposite,” he added.

Details about a tense telephone call late last month between Trump and Australian Prime Minister Malcolm Turnbull had created wariness. The Washington Post, citing unidentified senior U.S. officials, said Trump abruptly ended a phone call with Turnbull, even though Australia has long been a staunch U.S. ally.

David Wilkins, former U.S. ambassador to Canada, said the priority of the meeting was to set a positive tone, and that was accomplished.

“The president’s comment on the economy and creating jobs together was a very positive sign for Canadians, especially those that had been concerned about the trading relationship,” said Wilkins. “I think it was a win-win for both countries.”

— Andrea Hopkins is the Ottawa bureau chief for Reuters. Additional reporting for Reuters by Steve Holland in Washington and David Ljunggren in Ottawa.

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