Canada had little choice but to play it cool in NAFTA talks, trade experts say

As Canadian and U.S. trade officials race to hammer out a deal on NAFTA, some trade experts contacted by CBC News say they are generally supportive of the way the Liberal government has handled the negotiations.

Charm offensive hadn't worked with U.S., so there was not much Trudeau could have done to save NAFTA, say some

As Canadians play catchup and race to be included in a trade deal the U.S. has tentatively reached with Mexico by a Friday deadline, some trade experts say they are generally supportive of the way the Liberal government has handled the negotiations. (Evan Vucci/Associated Press)

When U.S. President Donald Trump announced that the U.S. and Mexico had agreed to a bilateral deal on trade to replace NAFTA, Conservative Leader Andrew Scheer swiftly rendered his verdict on the prime minister's handling of the negotiations. 

"Canadians will pay for Justin Trudeau's weakness and failure on NAFTA," the Opposition leader tweeted.

"With the U.S. and Mexico coming to a trade agreement without Canada, Canadians are now on the outside."

But as Canadian and U.S. trade officials race to hammer out a deal on NAFTA, some trade experts contacted by CBC News say they are generally supportive of the way the Liberal government has handled the negotiations.

"Have they made mistakes? I'm sure they have," said Gordon Ritchie, a former Canadian trade ambassador and the deputy chief negotiator of the 1988 Canada-U.S. free-trade agreement.

"But by and large, I would say they've done exactly what I would have wanted them to do.

"I think they played it very cool."

Liberals accused of 'political posturing'

Ritchie praised the Canadian negotiating team, saying they were better prepared than their American counterparts. As well, he said, the Canadians "haven't allowed themselves to be stampeded" by the U.S.

On Monday, Trump announced that the U.S. had reached a preliminary bilateral deal with Mexico, an agreement made during bilateral talks that had been going on since June — while Canada sat on the sidelines.

Trump has said he's open to Canada joining the deal and set a Friday deadline for all three countries to reach an in-principle agreement, which would allow outgoing Mexican President Enrique Pena Nieto to sign it before he leaves office at the end of November. Under U.S. law, Trump must wait 90 days before signing the pact.

Trump has warned he could try to proceed with a deal with Mexico alone and levy tariffs on Canada if it does not come on board, although U.S. lawmakers have said ratifying a bilateral deal would not be easy.

Erin O'Toole, the Conservative shadow minister for foreign affairs, said news of the U.S.-Mexico deal just confirmed that the Trudeau government had "failed to advance Canada's trade interests" and that "the Liberals have preferred domestic political posturing over advancing our economic interests."

"Mexico appears to have usurped our role as the key U.S. trade partner," he said in a statement released after the deal was announced. 

O'Toole said it was "critical for Canada to be at the negotiation table as a serious partner," in this case, it hadn't been.

However, Ritchie said there was little Canada could have done to ensure it was included in those meetings. 

"If Americans invite the Mexicans to tango and when [Foreign Minister Chrystia] Freeland calls [U.S. trade representative Robert] Lighthizer and says, 'Can I join the dance?' and the answer is, 'No' — I'm not sure what you do. Go down and bang on the door?"

No control over U.S.-Mexico meetings

Ritchie said it's his understanding that Canada was not caught off guard by the deal. Canadian negotiators were in very close communications with the Mexicans during those meetings and were informed about "pretty well everything that was going on," Ritchie said.

Gordon Ritchie, who negotiated Canada's first free trade agreement with the U.S., says the Liberals have done 'exactly what I would have wanted them to do.' (Power & Politics/CBC)

Dan Ciuriak, a senior fellow at the C.D. Howe Institute, a Toronto-based policy think-tank, and expert on international trade, said Canada has no control over whether the U.S and Mexico decided to negotiate separately. 

"Had we then caved on everything in order to get into the negotiation between U.S. and Mexico, we would have sold everything out without any ability to negotiate on our behalf," he said. "So, we couldn't do that. That would have been just throwing up the white flag."

Meredith Lilly, a former international trade adviser to Stephen Harper, wrote in a CBC opinion piece earlier this week that Trudeau had made "early missteps" including pre-emptively offering to negotiate the deal before Trump ever asked, ragging the puck throughout negotiations and criticizing Trump following his departure from the G7 meeting in Quebec.

"Trudeau's team placed Canada in the penalty box when it mattered most," she wrote. 

Charm offensive didn't work

Christopher Sands, director of the Centre for Canadian Studies at Johns Hopkins University in Baltimore, said Lilly makes some good points, but that by the time the G7 meeting rolled around in Quebec in June, "a reasonable Canadian would say, 'We tried being nice and what have we got for it?'"

The charm offensive, he said, resulted in aluminum and softwood lumber tariffs and now the threat of auto tariffs.

"Where's the payback for this strategy being nice? I don't think I would have advised at any point that Trudeau do anything differently," Sands said.

With the renegotiation of NAFTA, Canada's goal has been generally to maintain the status quo, Sands said. But the Mexicans were much more focused on getting a deal at any price, meaning the U.S. saw them as more willing to deal. 

Conservative MP Erin O'Toole said earlier this week the Liberals had 'failed to advance Canada's trade interests' but by Thursday, he had a more optimistic view of the chances of reaching a successful deal. (Sean Kilpatrick/Canadian Press)

"Canada seemed a bit standoffish, and that's certainly what the spin was from the [Office of the United States Trade Representative]. That the Mexicans were ready to deal. They had serious ideas. They were making proposals. The Canadians were kind of hanging back."

Sands said Trump has been unlike other U.S. presidents, who have typically respected the Canadian-U.S. relationship and tried to work things out because the two countries are neighbours, friends and have a long history together.

"With Trump, it counts for nothing, What Trump focuses on is, 'I'm big; you're small. You need me more than I need you, so I'm going to lay out the terms, and you're going to buy it.' That's unprecedented. But is that Trudeau's fault?"

Meanwhile, by Wednesday night, the Conservatives seemed to be sounding a more positive note. Although still critical of the way the Liberals had handled the negotiations, O'Toole, in a new statement, said his party remains "optimistic that Canada, the United States and Mexico will negotiate in good faith to finalize an agreement that is a win for all of our countries and the millions of jobs that depend on free and fair trade."

With files from Reuters

About the Author

Mark Gollom

Reporter

Mark Gollom is a Toronto-based reporter with CBC News. He covers Canadian and U.S. politics and current affairs.