Guest column: Now’s not the time to restart trade talks with U.S.

Article content

By: Peter McKenna

Let’s not forget that Canada is under economic attack (and threat of annexation) from the United States right now. So this is definitely not the time to be entering into renegotiation of the Canada-United States-Mexico- Agreement (CUSMA) of 2020.

Yet, both leaders of the federal Liberal Party and the Conservative Party are promising to do so once the April 28 election votes are tabulated. It makes me wonder if these two gentlemen really understand the history of Canada-U.S. relations or even the free trade negotiations of the mid-1980s.

Article content

But there it is. Liberal Leader Mark Carney, after speaking with U.S. President Donald Trump on the phone in late March, talking about concluding a comprehensive negotiation of a new bilateral economic and security arrangement.

“The numbers of tariffs that have been threatened, the uncertainty that’s been created by that, the scale of ambition of what the U.S. administration is trying to do — all of that means that in our judgment, there’s an agreement on the other side that we need to come to,” he said plainly.

But is there really an agreement after the federal election that actually serves Canada’s vital interests?

Conservative Leader Pierre Poilievre, for his part, was just as enthusiastic about the idea of renegotiation.

“CUSMA must be renegotiated anyway next year. Why wait? Why not get it done now? Why not end the uncertainty that is paralyzing both sides of the border and that is also costing us jobs today?,” he said emphatically.

He then added: “We should set a firm date to finalize a new deal, and I will propose that both countries pause tariffs while we hammer out that deal.”

Article content

Both of these men would be making a huge mistake by launching such negotiations now. The current timing, political environment and unique set of circumstances all suggest pressing the pause button on Canada-U.S. trade relations.

One of the first things that Ottawa should do is to reach out regularly to Mexican President Claudia Sheinbaum to coordinate our approach to Trump’s trade policy. We share many of the same economic interests and vulnerabilities, have a great deal to lose if CUSMA negotiations go sideways, and can outflank the Americans by working together.

In addition, Canadians should not lose sight of the fact that when Ottawa entered into a multifaceted negotiation of a free trade agreement (FTA) with the U.S. in the mid-1980s that American trade negotiators exploited one crucial reality — that is, they knew that Canada desperately wanted a commercial pact more than the U.S. and thus were willing to make concessions to get it.

I have always believed that the U.S. side-strung us along, promising to deliver on key Canadian trade aims, only to get what they wanted without providing us with a secure way around U.S. trade remedy laws. Today, Ottawa is in no position to enter into USMCA negotiations when Trump can once again dangle in front of us what Canada badly wants and use it to our detriment.

Article content

Part of Trump’s strategy is to use the threat of trade tariffs as a negotiating ploy to extract concessions from Ottawa. He has his sights squarely set on securing changes to the CUSMA that will disadvantage Canada in terms of the rules of origin or input content requirements, the dispute settlement mechanism and agricultural supply management. He also wants to go after our digital services tax, Canadian foreign banking regulations, cultural industries and Quebec’s language laws and perhaps even the goods and services tax.

More importantly, just ask yourself one simple question: How can we trust a Trump administration to honour a new CUSMA 2.0 when he has so flagrantly violated the original trilateral pact?

As a recent report by the Expert Group on Canada-U.S. Relations makes clear: “Returning to a pre-FTA world will undoubtedly affect our prosperity, but it is a world we have lived in and survived before.”

Knowing that, there is no urgency to sit down at the negotiating table when we know that Canada can manage an economic world without a revamped bilateral trade deal.

Article content

If anything, then, Canada should be looking to simply buy time, to drag things out and to wait until the dust settles from Trump’s latest upending of the world trading system. And we also need to learn from the Canada-U.S. commercial negotiations of the 1980s and not make the same mistake of entering into talks when we have few trade cards to play.

Besides, undertaking any new round of comprehensive trade negotiations now would only be playing into Trump’s hands.

The best thing that our next prime minister can do is to try, along with our Mexican friends, to postpone the future CUSMA review and any talk of fresh trade negotiations until after the November 2026 U.S. congressional midterm elections.

Peter McKenna is professor of political science at the University of Prince Edward Island in Charlottetown.

Article content