Canada Looks To China As U.S. Talks Drag On

President Donald Trump has described the USMCA as ‘transitional.’  Meeting with Canadian Prime Minister Mark Carney at the White House last year, Trump said the deal may have served its purpose.  As an international trade agreement that’s been the envy of the world, and as the pillar of economic integration for nearly 40 years, North American free trade is at a critical juncture.

Canada Is Looking For New Partners

In large part, as a response to Trump’s dismissive tone of the USMCA pact, Mark Carney has been circling the globe to foster new trade agreements and to strengthen deals with Canada’s current trading partners.  Since his election last year, the Prime Minister’s stated goal has been to broaden the country’s international trade portfolio, and in that process to decrease Canada’s dependence on the United States.

Carney recently flew to Beijing to meet with the president of China to discuss various issues,  including China’s high tariffs on Canadian pork, seafood, and canola.  Carney told reporters that he sees agri-food tariffs as one of his top issues for discussion on his China agenda.

“The objective of the meeting was to establish that relationship, to unlock very important shorter-term issues," Carney said.  "Canola, same with the fishing industry. Those are important issues for us. We’re going to be working hard to get those resolved. For those hardworking farmers and fishers, it means a pathway to address the tariffs that China has on them.”

Almost to illustrate Carney’s goal of securing less dependency on American trade, President Trump was within a stone’s throw of the Canadian border on the same day that Carney was talking to reporters in China.  At an automotive plant in Detroit, Trump continued to dismiss, the need for an ongoing USMCA pact.

“It’s irrelevant to me, I don’t even think about USMCA," Trump noted.  "We don’t need their product.  We don’t need cars made in Canada; we don’t need cars made in Mexico.  We want to make them here.”

Ottawa is highly aware that courting a more positive relationship with China will cause friction with American negotiators, currently at the beginning stage of formally reviewing the USMCA.  But Carney explained that, as dealing with a U.S. administration on trade issues becomes increasingly difficult, it only makes good economic sense to build closer ties with the world’s second-largest economy, China.

“It’s important that we are engaged with the world’s largest country by population, second largest economy by value, and increasingly influential to the global system," Carney said.  "It opens up a much bigger set of opportunities, over the next few months, for a broader range of Canadian businesses to come back to a relationship. And you build on that. That’s what is now unlocked, which was not the case 24 hours ago.”

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