This week brings an important deadline to either renew or review the USMCA, or Free Trade Agreement.
Canadian prime minister Mark Carney recently had a long telephone conversation with U.S. president Donald Trump, but Carney says there was no talk about the upcoming review.
While Canadian officials are trying to calm concerns about the talks, President Trump has slammed the deal, saying he may renew it or end it.
The point man speaking for Trump on the trade agreement file is the U.S. ambassador to Canada, Pete Hoekstra.
“Obviously we’re not anywhere close to announcing any type of a framework or interim agreement,” Hoekstra said. “I really think it’s in the hands now, on our side, it’s going to be the president. And I’m assuming on the Canadian side it will be the prime minister to determine what the next steps are and directionally where we’re headed.”
Hoekstra says Washington was ready to sign a deal in October, but then it fell apart. He didn’t say it, but the timeline coincided with a television ad featuring former president Ronald Reagan criticizing protectionism. The ad infuriated Trump and led to the termination of all trade talks for months.
Since then, Washington has had formal talks with Mexico, without Canada. The Canadians will join the talks this week. Both Canada and Mexico have formally declared they want a 16-year extension of the USMCA. But Hoekstra isn’t offering any hints on Trump’s current position.
“We will let the president outline with clarity exactly where he is when he’s ready and prepared to make an announcement,” Hoekstra said. “It could be in advance of July 1, or it could be sometime in July. I don’t think it will go into August, but I’ve been wrong before and I could be wrong again.”
Although there have been no formal talks with the Canadians, there have been meetings with the nation’s trade minister Dominic Leblanc and U.S. trade representative Jamieson Greer.
“I’m actually slightly more optimistic because we have seen some signs of life in the negotiations in a way that we weren’t seeing up until about a month ago,” said Brian Clow, a public policy analyst and former advisor to prime minister Justin Trudeau. “Minister Leblanc, Ambassador Greer have had some conversations. They’re going to meet again next week, so let’s see what the summer unfolds and what it entails.”
As for the suggestion of a deal in October, that’s not how some politicians north of the border see it. They also question Washington’s approach to the trade agreement.
“There’s a difference between an offer and a shakedown. And what we’ve been subjected to since October is basically a shakedown, asking us to make unilateral concessions as an entry step into a renegotiation of CUSMA,” said Derek Burney, a former Canadian ambassador to the trade agreement. “Why should we negotiate with a country that is violating the agreement we already have with them?”
Burney also referred to the delay in the opening of the Gordie Howe Bridge between Windsor and Detroit as a possible U.S. tactic in talks.
Prime minister Carney was asked about the negotiations, but he said little. What he did say was in a cautious tone.
“What I’ve seen with the president is you’re not close to making a deal and then you make a deal,” Carney said. “I’ve seen that in different cases. It doesn’t mean the deal’s a good deal, but it means being prepared, having done the work, knowing what you want.”
Carney hinted that ultimately a breakthrough would be likely after one-on-one talks with Trump.
“There’ll likely come a point where that possibility emerges,” Carney said. “We could sign a bad deal this afternoon, right? We could have signed a bad deal a year ago. We’re not going to sign a bad deal, so it has to be a real deal.”
At the close of the G-7 summit in France a week ago, Trump said he would rather leave the USMCA unsigned and terminated. But minutes later, he also suggested he might sign the deal.
