NAFTA uncertainty follows Trudeau to Davos as he meets with U.S. corporate leaders
Canada-U.S. economic roundtable will discuss modernizing trade deal
Prime Minister Justin Trudeau sat down with U.S. corporate and financial leaders Wednesday for a private roundtable at the World Economic Forum in Davos, Switzerland, to discuss the importance of the North American Free Trade Agreement and its potential modernization.
"We just had a great conversation about all the jobs in Canada and the U.S. that rely on NAFTA," Trudeau said to reporters after the meeting.
"We talked a lot about ensuring that citizens, and workers and families on both sides of the border understand that the integrated supply chains, the trade back and forth between Canada and the U.S. and Mexico, has been tremendously beneficial and we're going to keep working on that."
The Canada-U.S. roundtable was chaired by Dominic Barton, global managing partner of consulting firm McKinsey and Company. Barton also chairs Finance Minister Bill Morneau's advisory council on economic growth.
"The issue is the uncertainty and how it's going back and forth and people don't know what are threats and what is real. It's the uncertainty ... that makes people nervous investing. So the faster we can get this done the better," said Barton after the roundtable.
"It was about the importance of (NAFTA) and that we have to have voices coming [on that], not just from Canada, but also from the U.S. NAFTA is important for U.S. businesses. It's important that we understand that."
Trudeau was joined by Status of Women Minister Maryam Monsef. The U.S. members of the roundtable were:
- Andrew Liveris, chairman and CEO of Dow Chemical.
- David Abney, chairman and CEO of UPS.
- David MacLennan, chairman and CEO of Cargill.
- Don Rosenberg, executive vice-president and general counsel at Qualcomm Inc.
- Paul Jacob, executive chairman at Qualcomm Inc.
- John Furner, CEO of Sam's Club (a division of Walmart).
- Larry Fink, chairman and CEO of BlackRock.
- Tom Farley, chairman and CEO of the New York Stock Exchange.
- Tom Hayes, president and CEO of Tyson Foods.
Abney said that while NAFTA needs to be modernized, there's no question it has been good for jobs.
"Every 22 packages that either enters the U.S. or leaves the U.S. creates a UPS job," he said. "We believe there's a win-win-win solution and we're working with the governments in all three countries to make sure that we express our opinions."
'I am not Donald Trump'
As Barton said, uncertainty over the future of NAFTA and, therefore, over Canada's preferred access to the U.S. market, makes Trudeau's Davos pitch for more business investment challenging.
John Manley, a former Liberal cabinet minister and now CEO of the Business Council of Canada, said Trudeau simply needs to reassure businesses that Canada is committed to NAFTA.
"And he will probably make the case that when cooler heads prevail, NAFTA may be changed, but it will continue and businesses can expect to continue to benefit from the easier access to the United States' market," said Manley, who is also attending Davos.
While the focus for Canada is wooing business investment, strategic political meetings are taking place as well, of course. For example, Morneau is expected to meet Wednesday with his U.S. counterpart, Steve Mnuchin, who is also a friend.
Being part of a new Trans-Pacific Partnership trade deal, announced Tuesday, comes at a good time for Trudeau in his pitch to investors, said Manley, because it shows Canada favours liberalized trade with the fastest growing economic region in the world.
"It shows we favour a system of rules for trade with Asia that are not, frankly, dictated by China. And by saying Canada is part of TPP — without saying so — the prime minister is saying 'I am not Donald Trump' and I think that is a good thing," Manley said.
'Canada is a place to be'
Ulrich Spiesshofer, CEO of ABB Group, a power and automation technology company headquartered in Switzerland, doesn't see the uncertainty over NAFTA as a deterrent to investing in Canada.
"ABB has made a choice, a long time ago, to be active in Canada," said Spiesshofer, adding that just last year ABB opened a new campus in Montreal employing more than 700 people.
"We think Canada is a place to be," he said, pointing to Canada's education system that means his company can attract good, talented people.
Spiesshofer is also not overly concerned about the recent massive tax cut in the U.S., which greatly diminishes Canada's competitive edge on corporate taxes.
"It doesn't mean that Canada is not attractive. All together it's an important market and we're happy to serve it," he said.
Trudeau attributes ABB's recent Montreal expansion to meetings he had with the company two years ago when he was first in Davos.
He also credits his January 2016 Davos meeting with Thomson Reuters decision to open a new technology centre in Toronto in the fall of that year.
In other words, Trudeau is making the case that coming to Davos is worth it, and he can successfully sell Canada.
But it's not always a slam dunk.
In 2016, Trudeau and his ministers met with the head of General Motors in a bid to ensure its Oshawa plant continue. It remains open, but this past December GM announced it is scaling back production of the plant and cutting worker shifts.