| Speaker | Time | Text |
|---|---|---|
|
unidentified
|
These events all stream live on the free C-SPAN Now video app or online at c-span.org. | |
| C-SPAN, Democracy Unfiltered. | ||
| We're funded by these television companies and more, including MidCo. | ||
| Where are you going? | ||
| Or maybe a better question is, how far do you want to go? | ||
| And how fast do you want to get there? | ||
| Now we're getting somewhere. | ||
| So let's go. | ||
| Let's go faster. | ||
| Let's go further. | ||
| Let's go beyond. | ||
| Midco supports C-SPAN as a public service, along with these other television providers, giving you a front-row seat to democracy. | ||
| And now a discussion on trade relations between the United States and Canada amid ongoing tensions, featuring former Canadian trade minister Ed Fast. | ||
| During this hour-long discussion, hosted by the Hudson Institute, Mr. Fast addressed the effect of tariffs and North American defense ties. | ||
| All set. | ||
| All right. | ||
| Okay, shall we get started? | ||
| Welcome, everybody, to the Hudson Institute. | ||
| Welcome to those, of course, to you here in person and those who are with us online. | ||
| And hopefully we'll have some tuning in from Canada. | ||
| My name is Matt Boyce. | ||
| I'm a senior fellow here in the Center for Europe and Eurasia. | ||
| I, however, also cover Canadian affairs from time to time as I was a Foreign Service officer for many, many years, including a senior position at the U.S. Embassy in Ottawa. | ||
| So I follow these issues with great interest. | ||
| Before we start, just a couple of housekeeping items at sort of sort of midway through the, there'll be a lunch that will be sort of kind of brought to outside. | ||
| But however, please stay here and wait. | ||
| You're welcome to help yourself when this is over and hopefully stay a little bit stay a while and mingle and network. | ||
| And then of course, after we have the conversation, we'll sort of leave the usual 10 or 15 minutes for comments, questions, or cries of outrage from you. | ||
| Unfortunately, we won't be able to take questions from our online audience. | ||
| So without further ado, so today is Tuesday and Friday is the deadline that President Trump has set for a trade deal with Canada. | ||
| That isn't much time to get to yes. | ||
| And this time it seems like a real deadline. | ||
| There isn't any more important issue between the United States and Canada than concluding a trade deal at this time. | ||
| So we've seen a bunch of trade deals in the last few weeks. | ||
| We've seen the EU, we saw Japan, we saw Indonesia, but also Vietnam, Cambodia, and the Philippines. | ||
| And they all show a certain pattern. | ||
| All involve basic tariffs in the 10 to 20% range. | ||
| And for Cambodia, for example, up to 40% for transship goods from China. | ||
| Some deals include large purchases of U.S. energy, defense items, and foreign direct investment in the United States. | ||
| And the details are not always totally clear. | ||
| Some involve follow-on talks to sort of iron those details out, but the outlines, there's a certain pattern here. | ||
| So will this pattern apply to Canada? | ||
| President Trump likes tariffs, and many major U.S. trading partners seem to be falling into line. | ||
| If Canada does as well, what will the number be? | ||
| Or if there's no deal by Friday, it will be 35%, or so we are told. | ||
| Or will Canada buck this trend? | ||
| We'll see. | ||
| But are tariffs the only option? | ||
| Can anything else help get us past this impasse? | ||
| To discuss this question, I'm very pleased to announce, to introduce former Canadian Trade Minister EdFast and Jamie Tronas, director of the Center for North American Security, Prosperity and Security, CNAPS, the Washington, D.C. office of the McDonnell Laurie Institute, Canada's, in my opinion, best and most interesting think tank. | ||
| So if you don't know it, please check them out. | ||
| Ed knows this file intimately, and Jamie has been following trade very closely as well. | ||
| So Jamie and Ed recently co-authored, along with two other MLI colleagues who are not here, a very interesting paper, The Grand Bargain, a Path to Prosperity, Security, and Strength for the United States and Canada, which we'll discuss in a minute. | ||
| But before we start, I maybe take my prerogative as the one American and Hudson person on this panel to offer a few quick observations about the state of the bilateral relationship. | ||
| So from my foxhole, it's not in very good shape. | ||
| That might be an understatement to some people, but I was a diplomat for a long time. | ||
| And I'd be interested in seeing how you think about it. | ||
| But for those who don't follow Canada closely or don't have any skin in the game, they may not have noticed the most recent cover story of New York Magazine. | ||
| You have no idea how furious the Canadians are. | ||
| Now, even allowing for the magazine's anti-Trump and generally leftist editorial policy and headline hyperbole to attract readers, this seems like a pretty accurate reading of sentiment in Canada, at least as far as I can see from here, and across the political spectrum. | ||
| Now, this acrimony has many sources, probably mostly tariffs and arguments over trade, but also comments like the 51st State and Governor Trudeau. | ||
| Now, I wouldn't have used those terms myself, but they're out there, and Canadians don't like any of this. | ||
| And not surprisingly, Prime Minister Carney has punched back hard, for example, saying Canada's close relations with the U.S. are over, pushing the phrase elbows up, and fanning anti-American sentiment that is never far below the surface in the Liberal Party. | ||
| And it worked. | ||
| He came back from 25 points behind and won the April 28th election. | ||
| And some Canadian politicians are even calling for the country to free itself from the United States, forge closer ties with China, and cancel defense deals. | ||
| And by the way, in my humble opinion, that would be a major mistake and self-defeating, but that's a separate issue. | ||
| So the United States was the decisive issue in that election. | ||
| Even if millions of Canadian voters did not follow the Liberals' logic, the 41.3% who voted conservative did not like what the President of the United States was doing or saying, but they did not put him in relations with the United States in the center of their campaign. | ||
| They saw the election not as a referendum on Trump, the way the Liberals did, but on Trudeau, the last 10 years of Liberal rule and the future of Canada. | ||
| And now Prime Minister sort of Mark Carney is Prime Minister because he instrumentalized U.S.-Canadian tensions. | ||
| Now, some people say that we're going through the biggest crisis in the bilateral relationship since the War of 1812. | ||
| I think that's an exaggeration. | ||
| In your paper, you say it's the biggest crisis since the border disputes of the late 19th century. | ||
| That may be correct, but then there were also other periods of discord. | ||
| The Smoot-Hawley tariffs in 1930, which cut Canadian exports in half and made the Depression much worse for Canada. | ||
| John F. Kennedy and Prime Minister Diefenbaker hated each other. | ||
| The 1971 Nixon shock had a very negative effect on the Canadian economy. | ||
| But even if the current chapter is not the worst since 1812 or the late 19th century, it's at a bit of a low point, and both sides need to work hard to get past it. | ||
| Now, does this matter? | ||
| Yes and no. | ||
| Americans generally like to be liked. | ||
| The USG, the U.S. government, can only ignore public opinion and foreign governments' views so far to a certain point, especially those of close allies. | ||
| But the United States also has real interests. | ||
| And how Canada handles many issues, not only tariffs on many U.S. goods, but also the other issues that you raise, matter a lot. | ||
| And we're not going to decide today who is right and who is wrong on all these issues, but try to identify win-win ways out of the impasse and make North America great again. | ||
| The interests on both sides of the border are so vast that this will be resolved. | ||
| There will be a deal. | ||
| There are signs that the sides are moving closer to each other. | ||
| Prime Minister Kearney had a successful visit to the White House on May 6th, and since then he's endorsed NATO 5%. | ||
| He's lifted the digital services tax, and Defense Minister McGuinty reversed Canada's policy on ballistic missile defense and removed all restrictions dating back to 2005, which was long a sore point in the U.S. defense community. | ||
| The Liberal government is finally beginning to address long-standing USG concerns, U.S. government concerns. | ||
| And it seems like President Trump has gotten the Liberals' attention. | ||
| President Trump has also changed his tone, although he did just the other day say that he hasn't had much luck with Canada and that Canada will likely just pay tariffs. | ||
| It's not really a negotiation. | ||
| And he also groused about the fact that Canadians are not traveling to the United States and banning U.S. alcohol, which is happening. | ||
| But one last final point we get to the discussion. | ||
| So trade issues are extremely technical and complex. | ||
| The issues of tariff lines and non-tariff barriers and rules of origin, domestic laws, treaty and WTO commitments, not to mention powerful interest groups and domestic political considerations. | ||
| And most commentators have a relatively superficial understanding of these. | ||
| EdFast knows these issues inside and out from the Canadian point of view. | ||
| Mr. Minister, you were closely involved in this thought-provoking paper. | ||
| It sketches out a constructive and strategic argument on how the sides can get past the current impasse while building a stronger partnership and a stronger North America, which is a critical element in the Trump administration's high priority on the security of the Western Hemisphere, which is a massive priority for this administration. | ||
| How do you look at all this? | ||
| Well, the genesis for this project really came out of a concern that I had that, you know, over my 70 years of life on Earth, I have never seen the bilateral relationship as strained as it is today. | ||
| And much of it is on the economic front. | ||
| The tariff policies of the United States, as uncertain as they are right now, but we know that there are efforts to impose on Canada tariffs that could undermine our long-term prosperity. | ||
| All of that prompted me to start to put on paper a few thoughts about what if we looked at our relationship beyond just the narrow scope of USMCA. | ||
| Because the USMCA, you know, its genesis was actually Canada-U.S. free trade agreement and then NAFTA that morphed into the current iteration of this agreement. | ||
| But throughout that process, that has been a relatively narrow agreement that has stabilized our economic relationship. | ||
| There's much more to our relationship than just trade. | ||
| And I thought, think of all the irritants we have outstanding between Canada and the United States. | ||
| There are many. | ||
| There's a host of irritants, everything from supply management to defense spending to border security, the digital services tax. | ||
| All these issues that technically fall outside of a free trade negotiation. | ||
| What if we thought of our relationship in a much broader way and talked about, say, a grand bargain, where we take all of these disparate issues and bring them into one large agreement where for the long term we can establish what our continental security relationship will be? | ||
| How do we secure food and potash, energy security, and just broaden out the discussion to ensure that our two countries, which are bound so much by geography and by values and by a common history and our common engagement in the world in different wars, surely we can do better than what we have right now. | ||
| And by the way, that's not a criticism of the president. | ||
| It's a criticism of how we have almost taken our bilateral relationship for granted. | ||
| Well, let's make sure we don't take it for granted. | ||
| Let's incorporate these, this broad waterfront of issues into one large agreement where we resolve them once and for all and then move forward with driving prosperity and security between our two countries. | ||
| And, you know, eventually, of course, Mexico is going to have to be part of that discussion. | ||
| Maybe that's one of the questions someone will ask. | ||
| Well, what about Mexico here? | ||
| And we can get into that later, perhaps. | ||
| Jamie, you were one of the primary authors. | ||
| Could you summarize it briefly, perhaps? | ||
| Absolutely. | ||
| So that not everyone has to read it? | ||
| It's a bit long. | ||
| It was going to be longer, but as I'm sure all of you can appreciate, things changed so fast on the Canada-U.S. relationship in the past month. | ||
| We had a whole section on the digital services tax, which we had to take out, and we had sections on military spending that we had to change. | ||
| So this has sort of been my life for the last few months is constantly trying to play catch up with the different issues as they change. | ||
| But yeah, Ed came to us at MLI with this idea for a grand bargain, and we kind of ran with it in that it creates a very healthy relationship between Canada and the U.S. and it makes a pact that's much more difficult to break. | ||
| There's parts of it that are carrots, there's parts of it that are sticks, and there's parts of it that are candy. | ||
| The vegetables part, the part that maybe some folks in the U.S. administration don't want to eat would be the free trade part. | ||
| And we call that part of the deal the North American Prosperity Pact. | ||
| So we've broken the deal down into three different themes. | ||
| The North American Prosperity Pact essentially allows for Canada's access to the United States tariff-free. | ||
| But that doesn't come free. | ||
| That comes with a price that Canada has to pay. | ||
| Part of that comes in the force of having a second part of the pact on North American energy dominance, where Canada will help the United States to reach its energy goals. | ||
| to make sure that our oil and gas are flowing into the United States, to provide for additional energy for the AI future that America has planned, to allow for America to continue to be the world's dominant producer of oil and gas, and to allow for rising energy demands to be met. | ||
| We also have the other kind of stick, if you will, in that this is maybe something that Canada has been a laggard on, and we admit that freely, but that is the part of the pact that we call the Fortress Amcan, which is a comprehensive security and defense cooperation portion of the agreement. | ||
| Fortress Amcan would see us revitalize NORAD and put that more in the center of what we're trying to accomplish for North American security. | ||
| It would also, however, see Canada be forced to meet its percentage commitments to NATO and its percentage commitments to spending and other NORAD things that we could hash out as part of the trade deal in terms of purchasing and procuring and securing the North American defense industrial base. | ||
| But it also speaks to something that Trump really wants, and that is a crackdown on transnational crime from Canada and more efforts against things like fentanyl trafficking and freewheeling communications for transnational crime to be based in Canada. | ||
| So taking those three things together, the North American energy dominance part of the pact, the Fortress AMCAN, which really aligns the countries on defense and security cooperation as well as policing to secure the continent, including the Arctic, and combining that with access to the U.S. for free trade as part of the Prosperity Pact, it also sees a deepening integration of Canada and U.S. relations. | ||
| It acts as a reset, but also acts as a counteract for one president or one prime minister to no longer have the power to break an entire agreement because the incentives are so strong to remain in it. | ||
| You can say you want to do tariffs, but that means Canada no longer has to comply by its side of the agreement on defense, which America desperately would like it to do, and has made that very clear. | ||
| It would mean that the agricultural, agri-strong, and food-secure portions of the agreement would be broken. | ||
| That would guarantee American access into Canadian markets. | ||
| And so for either side, the stakes of trying to renegotiate or redo the agreement in such a unilateral way would have such strong consequences that it makes it more difficult for Canada and U.S. to break apart. | ||
| What this also does is deter China. | ||
| It makes it so that China understands that Canada is now securely within the sphere of the United States. | ||
| Canada is a middle power. | ||
| It has to kind of act by following a larger power. | ||
| That's just the way of the world and the way that Canada is. | ||
| We are geographically linked with the United States. | ||
| We may not like that fact sometimes when it's elbows up and we want to get our elbows to our neighbor, but unfortunately that's the way of the world. | ||
| And we cannot escape our geography. | ||
| We are united no matter what. | ||
| And so therefore we should be united through a large agreement that guarantees stability for investors, stability for infrastructure, guarantees investment on both sides of the border from both governments to ensure that the continent remains secure, prosperous, and strong. | ||
| Yeah, so one of the things that The advantages that the United States has over, say, for example, the EU is that the president actually can bring some of the other issues that are non-trade issues into discussions with negotiations with other partners, whereas the EU, for example, it's much more limited in that they can only do trade. | ||
| They can't bring in the defense peace or the whatever, the border peace, etc. | ||
| But this paper contains some very interesting ideas. | ||
| I particularly appreciate that you raised important, long-standing, unresolved issues like defense and the border, which I grappled with at the U.S. Embassy in Ottawa. | ||
| But President Trump has made it very clear on Truth Social what he wants in his usual sort of, you know, all caps. | ||
| I will only lower tariffs if a country agrees to open its market. | ||
| If not, much higher tariffs. | ||
| And I will always open up tariff points if I can get major countries to open their markets. | ||
| Without tariffs, it is impossible to get countries to open up. | ||
| Always zero tariffs to America. | ||
| Japan's markets are now open for the first time ever. | ||
| USA businesses will boom. | ||
| I'm drawing from several tweets together, but that's sort of the idea. | ||
| He's made it rather clear that tariffs are his, and zero tariffs for the United States are his priority. | ||
| So you've made it, I think, an excellent and some excellent and very intelligent strategic proposals. | ||
| Missile defense fits perfectly within the administration's priority on security of the homeland and the Western Hemisphere. | ||
| Canada needs to be a partner, an active partner in the Golden Dome for it to be effective. | ||
| President Trump also wants energy dominance, which can be achieved with Canada's rich resources and benefit both countries. | ||
| Canada has abundant rare earths that are critical for key industries that the U.S. industry very much needs. | ||
| You focus on the northern border. | ||
| Many Canadians don't really get how important this is to the United States, to the Trump administration. | ||
| It's a backdoor, it's a soft underbelly into the United States, and much negative stuff comes through here. | ||
| Now, Canadians often think, well, like, we're Canada. | ||
| Like, what's like, you know, we're a nice people, we're a great country. | ||
| Like, what's like, you know, how could this be happening? | ||
| Why are the Americans so upset about this? | ||
| But it isn't just fentanyl. | ||
| There's a lot more than that. | ||
| I mean, who here knows that the USG last year leveried a $3.1 billion fine against TD Bank for money laundering? | ||
| That gives a sense of the orders of magnitude of criminality that we're talking about. | ||
| Most people think of the southern border as the problem, and it is much more of a problem, but there are major issues to the north as well. | ||
| You understand this, and you make a strong case, and I think the Trump team should like that idea. | ||
| There are, however, other issues that you did not really go into deeply at all. | ||
| Communist China's use of Canada as a platform to gain and project influence into the United States. | ||
| This includes transshipment of Chinese goods and Chinese organized crime networks that have expanded into the United States over decades and much more. | ||
| Then there is Islamist influence, including the Muslim Brotherhood, who here saw the New York Post story on Sunday. | ||
| It covered the Muslim Brotherhood's long-term strategy dating back to 1991, an 18-page paper, to conquer North America through what it calls civilizational jihadist processes aimed at sabotaging and eliminating and destroying Western civilization from within. | ||
| Now, the Carney government has adopted some of the issues in your paper, 5% at Hague Summit, and by proposing this new security and economic agreement with the United States. | ||
| But how can your otherwise very positive ideas and your strategy be transformed into reality when the name of the game these days is tariffs? | ||
| Now, your Prime Minister has admitted that it will likely, that a deal will see some tariffs. | ||
| Do you see him addressing the Communist Party of China, for example, and Islamist concerns or any of the other issues, given that these are major constituencies that support the Liberal Party? | ||
| Anybody take a step back to the question? | ||
| Let me begin by saying that right now the issue is tariffs. | ||
| And eventually the tariffs will start to bite in Canada. | ||
| We fully expect that the tariff regime that the President is expected to impose on Canada is going to hurt, could very well undermine our economic health. | ||
| We could slip into recession very quickly. | ||
| I expect that tariffs will also bite on the American side. | ||
| It takes time for this to play out, but as tariffs lose their luster as a tool for economic diplomacy, I suspect that the discussion will broaden out to, okay, what is it that we really want in our bilateral relationship? | ||
| The U.S. is going to have to ask, what do we want? | ||
| Simply concessions on tariffs? | ||
| That will, as you mentioned, smootholi. | ||
| A perfect example of where terrification of a trusted trading partner ended up hurting both parties. | ||
| And it takes some time to actually take root, but we will feel the pain on both sides of our border. | ||
| And once that happens, I suspect there will be a growing appetite to take our relationship beyond that and not see it as simply about tariffs, but see it as about two trusted partners that actually have, in many ways, complementary things to offer each other. | ||
| And so my hope is that we'll start to have a discussion about a larger partnership agreement, which we're calling a grand bargain, and that it will bring in to that discussion the disparate challenges we have and the opportunities we have. | ||
| Canada has a lot to offer. | ||
| It's not only on energy, food security. | ||
| We should be talking about potash. | ||
| 80% of the potash that goes into the United States comes from Canada. | ||
| Is there a way of ensuring there's a long-term assurance of supply to the ag industry in the States? | ||
| Of course there is. | ||
| And I think once we start looking at those opportunities, we will say, you know what? | ||
| There are so many things that we could actually incorporate into a broader agreement that will establish us or set our course for many, many years to come. | ||
| Perhaps 50 years, perhaps 100. | ||
| But it'll prove that our relationship is still strong, it's vital, and it's necessary for both parties to continue to feed into that and nurture that relationship. | ||
| And I would add on the China part, you know, Chinese influence operations and disinformation campaigns, they're making strategic use of this crisis in Canadian and U.S. relations right now. | ||
| Just recently there was an op-ed in Canada's largest national newspaper entitled, Let's Free Ourselves from the U.S. and Forge Closer Ties with China. | ||
| As my colleague Balkan Devlin said, it sounded better in the original Mandarin. | ||
| It is quite astounding. | ||
| And China has been pushing leverage on Canada as well to move closer away from the United States and closer to China. | ||
| We have huge counter tariffs on Canadian farmers and they are facing counter tariffs on certain aspects that we were asked to impose on China because of requirements from the United States. | ||
| And we've done that as an ally. | ||
| We've done what was asked of us as a country. | ||
| And then we are also paying the price for it. | ||
| And so Canada wants to know, we need to know for sure that when we ask America and America asks us for something, that that can be reciprocated with an understanding that we're doing it as part of a larger agreement for the good of the continent and for the good of the relationship, and because it's the right thing to do to stand up to the PRC and to say that you need to back off from our continent. | ||
| And a deal like this can really act as a deterrent to those efforts. | ||
| Canada, I mean, for those of you who are Canada watchers here, has been just before the election, there was almost two years of hearings on the Foreign Interference Commission that looked into Chinese foreign interference, not just Chinese foreign interference, but from other countries as well, into how they are actively manipulating and infiltrating the government of Canada, not just as people on the ground trying to have influence, | ||
| but as actual potentially elected officials at different levels of government. | ||
| And this is something that Canadians are now aware of and they're very concerned about. | ||
| It was a concern in the last election as well. | ||
| It wasn't a top of the front concern, but it was a concern. | ||
| And so people are really paying attention to what foreign countries are doing in Canada. | ||
| And I think the United States should be paying even closer attention to that and should use this moment as a way to start thinking about strategic deterrence in their own backyard, in the Arctic backyard, particularly. | ||
| Our think tank's been doing a lot of work on Chinese influence in the Arctic and Chinese money laundering in the Arctic as well. | ||
| So there's a lot of different countries and a lot of different priorities that are at stake. | ||
| I think on security, when it comes to America asking Canada to do the things that we want to do on security that they want us to do, securing the border, whether it's securing the border, tracking down transnational crime, tackling terrorist organizations, tackling other money laundering operations. | ||
| In order to do that, we need to not be an insolvent country. | ||
| And tariffs are going to make it very hard for Canada to have enough investment and enough capital as a government to hire the people that we need to do those things. | ||
| Quite simply put, I always say you can have tariffs or you can have Arctic security, but you may not be able to have both because Canada won't be able to afford it if you tariff us and our economy goes into a deep recession. | ||
| One of our economists, Trevor Toom, has done an analysis that a 10% tariff across the board would throw Canada into a recession. | ||
| And if the United States follows into a recession, then it's going to be extremely hard for Canadians to pull themselves out of that. | ||
| And so we want to be able to do, I would say Canada wants to be able to do the right thing on all of this, but to do that, we need something that's going to help us raise the capital, raise the prosperity, create an environment of investment and security that this type of agreement would guarantee. | ||
| Those are interesting arguments. | ||
| I mean, I think sometimes, having watched this now for a number of years, that commission you're referring to on foreign influence and Canada, particularly Chinese Communist Party, et cetera, was very positive. | ||
| But there are a lot of Canadian sort of pundits or kind of think tankers, politicians wonder whether the Liberal Party really has gotten the message. | ||
| I mean, these were very important hearings to clarify this because the United States has been concerned about Chinese, the influence of the Chinese Communist Party in Canada for a long time. | ||
| And the Liberal Party never really paid much attention to it, especially since some of its, there are some major vote banks that are in this category, as well as Islamist vote banks that provide buffer in certain geographic areas which benefit the Liberal Party. | ||
| And so however valuable these suggestions are, and your argument makes a lot of sense. | ||
| I don't know whether I should express my sort of skepticism that the government has really figured this out or is prepared to put its money where its mouth is or whatever. | ||
| I don't know. | ||
| Some people will say, I'll believe it when I see it. | ||
| But I mean, the fact that they're doing it and you're talking about it and others are talking about it is very, very important because aside from all the very, very constructive and strategic and positive things you say, you put in your paper, et cetera, and you talk about, there are also the sort of, there are even others that I think would actually grab the Trump administration's attention because they do really care about the threat coming from communist China. | ||
| They do care about extremist networks of Islamist in nature. | ||
| And of course, we've been watching all the protests in your country that are Islamist-inspired, et cetera, and the anti-Semitism and all the rest of it that is sort of like all you need to do is open your Twitter feed and you sort of see all these things. | ||
| And it's really quite something. | ||
| But anyway, just moving on, I mean, so your prime minister has also used this term, the one that you've coined, the grand bargain, the title of your paper, in various contexts. | ||
| Is he stealing your idea or borrowing your idea or whatever? | ||
| Or how does his approach differ from yours? | ||
| Any thoughts? | ||
| You know what? | ||
| If he borrowed the idea or made it his own, I think both Jamie and I would be thrilled. | ||
| Because I believe that would be good for Canada-U.S. relations. | ||
| And I am encouraged to the degree that Prime Minister Kearney has actually signaled that the deal he wants to discuss with Donald Trump is actually beyond trade. | ||
| It would include security and defense cooperation, improving that. | ||
| We believe that there's room to make that grand bargain even larger, much larger actually, to encompass the totality of our bilateral relationship. | ||
| And if he embraces that, and we're able to also get to the key decision makers here in the United States and persuade them of the merits of broadening out our discussion to that degree, maybe we've got a chance to put our relationship back on the right footing and really establish ourselves as a fortress America economically and from a defense and security standpoint. | ||
| I mean, because when you think of when the administration talks about Western hemispheric security, that just doesn't mean south of the border. | ||
| That also means north of the border, and it also means the Arctic. | ||
| And so Canada's whatever active cooperation and partnership in Western hemisphere security is actually would be extremely desirable and would fit beautifully within the framework of Trump Rubio foreign policy in terms of this focus on the Western Hemisphere. | ||
| But Jamie, any thoughts on this grand bargain? | ||
| Yeah, no, borrowing, stealing, whatever. | ||
| Totally fine with it. | ||
| Actually, Danielle Smith uses this term a lot, but she talks about it more in the context of her also other favorite term, which is North American energy dominance, which is also a term we use and love a lot. | ||
| But the idea that Carney has said he wants a more comprehensive fiscal defense deal, I think is something that is encouraging to us, and I think it should be encouraging to Canadians in that it does put more cards on the table for Canada, and it also has the potential to resolve a lot more of these sticky issues that have been frustrating the relationship through various administrations for a long time. | ||
| And that is something else that we feel is part of a reset for the Canada-U.S. relationship as well, and that is contained in this. | ||
| We are overwhelmingly thrilled. | ||
| If anyone wants to take this paper on board and claim it as their own, we will just be happy with that. | ||
| We're happy to help. | ||
| I think that's the kind of thing everything tank dreams of, right? | ||
| And the reality is, it was only five years ago that USMCA was negotiated. | ||
| At that time, it was considered certainly by the President to be the best deal he had ever done, certainly with Canada. | ||
| And today, somehow the deal has lost its luster, right? | ||
| There's only so and so much new that could be negotiated within USMCA. | ||
| The real opportunity is outside of our trade relationship and everything that ensures that North American dominance in terms of economy and also security are key features of our bilateral relationship. | ||
| So, you know, restricting discussions to strictly the USMCA, the pending review of USMCA, which I suspect it's going to end up being a renegotiation, there's actually not that much that could be renegotiated. | ||
| Sure, there's all kinds of tariff lines. | ||
| Sure. | ||
| Supply management would likely be in the crosshairs of the president. | ||
| But beyond that, the big issues, the big irritants are outside of USMCA. | ||
| And that's where the grand bargain comes in. | ||
| Just playing devil's advocate here, though, I mean, sort of as soon as you open up the aperture and you bring in all these big, huge ideas, you set yourself up for months and months and months of negotiations and haggling over details and stuff. | ||
| And I mean, the tariff issue has its proponents and its opponents. | ||
| And as soon as you sort of, let's say, for the proponents, it does tend to concentrate the mind. | ||
| And it does tend to focus attention on issues that have been simmering or festering or whatever. | ||
| And so just if you were to take that point of view, it does, sort of however important and strategic and valuable your suggestions are, it does set up a sort of potentially months-long negotiation or who knows how long until you get to this big, huge package. | ||
| Months long? | ||
| I think. | ||
| Can it be? | ||
| Much more than that. | ||
| Well, I'm being, you know, here again, a diplomatic understatement. | ||
| I mean, a long time. | ||
| And of course, the Premier of Alberta the other day, Danielle Smith, said that observed that none of our energy resources are tariffed. | ||
| None of our agricultural products are tariffed. | ||
| The vast majority of goods crossing the border under USMCA or CUSMA, as you call it, are agreement compliant. | ||
| But however, President Trump does have particular issues that he has with particular industries. | ||
| When he identifies an area that's a trade irritant, that means it probably is, and trying to find a way to get a resolution is probably the way to get to a renegotiated deal. | ||
| We don't, as you say, have much to offer to lower tariffs beyond supply management in dairy and poultry, but sacrificing these sacred cows for a few tariff points would be politically very costly. | ||
| So, yeah, I mean, sort of, I just sort of look at this, the grand bargain idea, however strategic and collaborative and it is, I just kind of wonder about, you know, there are some like impending deadlines right now, and those deadlines seem to be pretty hard now. | ||
| And so I wonder whether we're going to get, we're going to be in a situation where, you know, as your Prime Minister has acknowledged, there will be some sort of tariff agreement, or it'll either be whatever is in the order of the Japan's or the EU's or it'll be in the order of the 35%. | ||
| And I just, you know, I'm not seeing that many plausible scenarios beyond that. | ||
| No, we totally understand that this might not be the right time for us to say, oh, well, hey, here's this great idea. | ||
| Let's just stop everything we're doing on the negotiation front and go with it. | ||
| We get that. | ||
| You know, timing is everything. | ||
| But we do think that no matter what, for the next three and a half years, whatever happens on August 1st, we're probably going to keep rehashing and renegotiating and talking about tariffs and what the rate is. | ||
| And because the President at the moment has the power to do that. | ||
| And so eventually, Canada and the U.S. at some point are going to reach a breaking point in the relationship even further than they have now if this keeps continuing. | ||
| This will be there when that time comes and we need to reset the relationship because it's going to take something, at least on the Canadian side, quite major, to reset that relationship and to gain trust back again in the United States, especially for investors who want to look at building infrastructure across the border to keep the goods flowing. | ||
| And that's something that we actually also address in here too on the tariffs that I feel like I should mention, which is that the trade deficit that Canada has with the United States, we outline in there quite significantly, is different than every other trade deficit that the United States has. | ||
| What we trade with the United States is primarily primary or secondary inputs into industry, which means that 66% of the stuff that America buys from us, America is buying it from Canada for the purpose of turning it into another product that they're going to profit from. | ||
| A value-added product. | ||
| So we're not selling you already-made shoes or already-made backpacks or already-made back-to-school supplies. | ||
| We're selling you the wood or the metal or the minerals or even the electricity or the energy that you need to make those products. | ||
| And that is the difference between Canada and what Canada is selling you and other countries. | ||
| And that means that 66% of our inputs are required for American jobs in manufacturing. | ||
| That's a huge number. | ||
| That's about 9% of American trade overall. | ||
| And Canada is responsible for that. | ||
| So by tariffing that or by threatening to tariff that, you're actually threatening American jobs. | ||
| And that is a problem for Canada because that does threaten Canadian jobs. | ||
| We need those Americans to keep making things with our products so that we can keep making those products to sell to Americans and the job cycle continues. | ||
| But if that starts to fall apart, it will hurt Canada and it will definitely hurt America. | ||
| And so we want to make sure that that is kept into consideration. | ||
| So if the prime minister needs that as a talking point, he's welcome to steal it. | ||
| But if the president also needs to justify why a deal with Canada would be different than every other country, this is why. | ||
| It's not just that too, though. | ||
| It's also that we have a comprehensive geographical trade relationship. | ||
| We have the defense treaties. | ||
| We need to secure our continent. | ||
| We need to deter China right on America's doorstep. | ||
| There's all these other reasons. | ||
| But American jobs are at the heart of this. | ||
| And that is something that I think is in both of our countries' best interests to protect. | ||
| Yeah, and in addition to the supply management issues that the Premier of Alberta was mentioning, as well as people have been talking about forever and ever, the softwood lumbers, et cetera, there's also, I've also seen papers with all sorts of other issues that are less well known because those are just the most usually cited, softwood lumber, supply management, et cetera. | ||
| But there are others as well. | ||
| So this is where this whole discussion gets unbelievably technical. | ||
| And you've got to be like an unbelievably well-informed trade lawyer or trade specialist to sort of sort all this stuff out. | ||
| But in any case, Mr. Minister, you also mentioned that USMCA QUISMA is up for renegotiation. | ||
| And the question is, I thought I heard you say that you think it's going to be opened pretty broadly as opposed to just maybe tweaked some of the kind of, because one of the things that happened with NAFTA over the time is that there were certain kind of pathologies in the trading relationship that festered over time. | ||
| It wasn't quite as, it existed for such a long time that these various anomalies started to grow, et cetera, which then the previous Trump one sort of wanted to renegotiate because it had gotten sort of, you know, it had been in existence for such a long time. | ||
| And to sort of fix some of these things that had kind of grown over the anomalies, et cetera, the pathologies or whatever you want to call it, the disadvantages to the United States, for example. | ||
| But I mean, in this case, it's only been five years. | ||
| So would you, I mean, so what do you think might happen next year when it's renegotiated? | ||
| Well, I didn't suggest that the USMCA renegotiation be broadened out. | ||
| Yeah, no, I know. | ||
| I know you didn't. | ||
| I think you probably don't want that. | ||
| No, I don't want that. | ||
| In fact, I'd love to see it left as is, just carry on the relationship as it is. | ||
| I mean, the agreement has weaknesses. | ||
| You know, I wasn't happy with 100% of what was negotiated five years ago. | ||
| But you know what? | ||
| That agreement, it's working for us. | ||
| It continues to underpin the North American Economic Partnership, which includes Mexico as well. | ||
| The whole premise of this paper is to say, you know, we have USMCA, but that's just a part of our relationship. | ||
| And if in fact we're going to have a discussion about our broader relationship, let's truly broaden it out and start to put our minds to what are the outcomes we could achieve if we started bringing all these pieces together in one grand bargain. | ||
| And yes, it will take time. | ||
| This is not a minor renegotiation of CASMA or USMCA. | ||
| This would be a very significant negotiation because it implicates so many parts of our relationship. | ||
| Just think about defense itself. | ||
| What a big piece that would be. | ||
| But even if you were able to formulate some broad strokes that would govern future discussions about North American or continental security would be a huge step forward if you would incorporate that into a grand bargain. | ||
| So I think there's a real opportunity for us to do something remarkable that will be looked upon by historians as having been a bold step forward the way the original Canada-U.S. free trade agreement was and then after that NAFTA. | ||
| A lot of people still look back and say that was world leading in every sense of the world and we can again be world leading in our bilateral relationship. | ||
| Some people would say that those were unbelievably important agreements, but I've also heard some people say that they actually sort of were a bit more favorable to Canada than they were in the United States. | ||
| But that becomes a case that you don't want to relitigate history or those whatever. | ||
| And they get so complicated that we don't need to go there. | ||
| But it seems to me these are so important that the fact that you've raised them and are talking about them seriously and hopefully making this also into an issue in your country so that your government also pays attention to the northern border and China, the platform that Canada does provide to malign actors that are looking at the North American continent. | ||
| And that would go over, I mean, to pay attention to that would be a big deal in addition to the things that you're already doing or that your government is already doing, the defense stuff. | ||
| And I mean, hopefully this, you know, energy dominance is a phrase right out of the Trump administration. | ||
| So I mean, to open up, to unleash the potential that that offers would be, I can't imagine how the Trump administration would not consider that positive. | ||
| And so all these sorts of things that you've made issues of are very valuable. | ||
| The question is just whether we have enough time until Friday to conclude them. | ||
| I wasn't suggesting this. | ||
| I know, I know. | ||
| By the way, I just want to add, there is a narrative developing in Canada, and Jamie's already touched on it, that the U.S. administration slowly but surely is chasing Canada into the arms of China. | ||
| I don't share that narrative. | ||
| I believe we as Canadians were strong enough, independent enough, sovereign enough to recognize the threat of that. | ||
| But it is a narrative that is starting to take root, and I lament that. | ||
| That should not be the case. | ||
| It should be very clear in Canada that our number one partner has to be the United States. | ||
| It will always be the United States. | ||
| And that should be our core narrative as a country when it comes to bilateral relations. | ||
| But just to put that on the map, there is a narrative developing that is troubling, to say the least. | ||
| Well, I've heard that narrative before. | ||
| I think I would be profoundly mistaken. | ||
| And I hope the good people of Canada, including your leadership, understands what kind of a regime the Communist Party of China is, what kind of a policy they are pursuing globally, et cetera, and that would remain in the West rather than chasing kind of temporary profits and compromising your principled approach to so many issues over the decades. | ||
| But that's a different question. | ||
| So we have 10 more minutes. | ||
| Shall we open up the floor for comments, questions, cries of outrage? | ||
| Or shall we, any last parting shots? | ||
| Okay, so, all right, so the floor is open. | ||
| Should anybody wish to ask our panelists a question or make a comment or whatever. | ||
| You, sir. | ||
| So I have two thoughts. | ||
| I have two questions and one idea. | ||
| The first is, how does Mexico play into this? | ||
| You alluded to that. | ||
| The second is, what do you think about the argument that the more concessions that Canada makes now in the context of a tariff-related trade deal, the less leverage it will have when the USMCA is renegotiated? | ||
| And the idea is, I totally understand what you're saying, that the USMCA is very narrow and what you're proposing is a vision for a very different outcome, a very different framework. | ||
| It would be great if you were somehow able to, I don't know, I envision a chart or something, some grand graphic where you would show the elements of the USMCA that could be used to maybe get you in the direction that you want to go with the grand bargain. | ||
| And then what's completely outside of the scope of the USMCA, just as a kind of a roadmap. | ||
| And that might be, you know, certainly for someone like me that doesn't know the USMCA very well, would be great to kind of see where the gaps are and what we can expect the USMCA to be useful for. | ||
| Thank you. | ||
| I'm sorry, could everybody please identify themselves? | ||
| I'm sorry. | ||
| Scott Seaman with Mitsui. | ||
| Okay. | ||
| Maybe I'll take the Mexico question. | ||
| You can take the second one. | ||
| On Mexico, do not misconstrue our paper as being a vote of non-confidence in Mexico. | ||
| That was certainly not the intention. | ||
| We very much value the trilateral economic relationship we have on the North American continent. | ||
| It is so highly integrated, supply chain is so highly integrated. | ||
| I don't know why anyone would ever suggest that we break that up. | ||
| Having said that, many, if not most of the issues mentioned in the grand bargain as being outside of USMCA are very Canada-U.S. specific. | ||
| And so bringing Mexico into that discussion is probably going to be counterproductive. | ||
| I think what has to happen is there has to be a reaffirmation that we are not in any way seeking to undermine the benefits of USMCA and the partnership, the tripartite partnership that that has established. | ||
| Yeah, we certainly make the assumption in the paper that folks know a little bit more about USMCA than we maybe think they actually do. | ||
| So that's good feedback for us. | ||
| In terms of concessions, I mean, there's been a lot of chat right now on whether or not the USMCA is even going to be renewed, which is terrifying for Canada. | ||
| But it is actually where we're at. | ||
| These are things that are on the table. | ||
| People are planning for a review. | ||
| That's the best case scenario. | ||
| The second best case scenario is a renegotiation. | ||
| The worst case scenario is a complete disavowal and disembodiment of the USMCA and trying to just say tariffs across the board. | ||
| That would be catastrophic. | ||
| And I don't think that that would help America. | ||
| It certainly would risk a lot of American jobs. | ||
| And it may even just be tariffs that are sector-specific. | ||
| We really don't know what it looks like. | ||
| But getting rid of the USMCA writ large would be a significant problem. | ||
| That's why we think that there's a need for looking at how Canada can expand its cards beyond what it has at the table for renegotiation of the USMCA and by bringing in extra issues that we know that America wants us to work on. | ||
| That's sort of how we can get there with this particular portfolio of issues. | ||
| Okay. | ||
| Did I see a hand? | ||
| We're here. | ||
| Thank you. | ||
| Identify yourself. | ||
| Hi, so I'm Abbey. | ||
| I used to work on policy in the previous Canadian election. | ||
| That was in April. | ||
| And this is a bit of a question for Mr. Fast. | ||
| First off, I wanted to say that you actually used to be my MP a little while ago. | ||
| But I imagine you also saw that Stephen Harper recently said that Canada should reduce our reliance on the United States because, in his view, he doesn't see the United States as being a reliable negotiating partner in the recent tariff talks. | ||
| And from what I've heard thus far in this talk, I presume that you want Canada to be more integrated with the U.S. and maybe that implies a little bit more of a reliance on the United States. | ||
| And I was wondering if, assuming this grand bargain is sort of enacted, whether Canada should also take steps to reduce our reliance on the United States, such as how the Carney government is proposing Atlantic LNG ports and also expanding access to ports in Coquitlam and other areas like that, essentially reducing reliance on the United States. | ||
| That was a very interesting question because I was going to ask that too about noticing what former Prime Minister Harper said the other day in Saskatchewan at that sort of the diversification, not only towards China, but also away from the United States, which is, of course, a theme that we hear from the Carnegie government. | ||
| Well, as someone who's part of the Harper government during the 10 years that we negotiated trade agreements with, I believe it was 46 different countries around the world, I believe Mr. Harper's comments were directed at trade specifically. | ||
| Diversifying our trade relationships around the world is a good thing. | ||
| We should be doing that. | ||
| That was the whole premise. | ||
| In fact, it was the linchpin of Harper's economic policy. | ||
| We need to open Canada up to the world and see the opportunities that are out there to trade, to invest. | ||
| I'd be very surprised if in any way he intended to signal an abandonment of our primary relationship with the United States. | ||
| I would be really surprised. | ||
| In fact, I don't believe that's what he intended to say, but you may want to ask him that yourself. | ||
| But the grand bargain we've proposed, it doesn't necessarily mean we are more highly integrated with the United States. | ||
| It means that our relationship is much better clarified going forward. | ||
| And there's an acknowledgement that because of our geographical proximity and our common value systems and our shared history, that we have something to offer the world that very few other partners do around the world. | ||
| And so if you were going to ask me the same question, I would say, listen, the United States will always be our number one trade partner, and we should never take our eye off that ball. | ||
| But as we're continuing to strengthen that relationship and improve it, yes, we should be diversifying our opportunities around the world. | ||
| I'm glad to hear that Canada is continuing to try to finalize a trade agreement with ASEAN, Southeast Asian group of nations. | ||
| A great idea with Indonesia as well. | ||
| I think the Philippines should be part of that, just giving us more opportunities to do business around the world on a tariff-free or a tariff-reduced basis, and also eliminating all those barriers behind the borders, the SPS, the sanitary and phytosanitary issues, the non-tariff issues that really tend to frustrate people trying to do business around the world. | ||
| And we have maybe time for one more. | ||
| Should there be another question or comment or otherwise? | ||
| I'm seeing no hands. | ||
| So if that's going once, going twice or three times. | ||
| All right, okay, good. | ||
| So let's just give our visitors from Canada, friends from Canada, a warm round of applause. | ||
| And good. | ||
| And thank you all for coming. | ||
| And please feel free to join us for lunch and stay for a while, network, chat with our guests, whatever. | ||
| Thank you again for coming. | ||
| All right. | ||
| Bye-bye. | ||
| Yeah, yeah, no. | ||
| Thank you. | ||
| Very kindly. | ||
| As you know, I was going to introduce myself in English. | ||
| I used to be on NASDAQ many years ago. | ||
| My husband works in the park government, so I just want to say hi. | ||
| C-SPAN's Washington Journal, our live forum inviting you to discuss the latest issues in government, politics, and public policy from Washington to across the country. | ||
| Coming up this morning, we'll talk about the 60th anniversary of Medicare and Medicaid with Andrea Dukas, Vice President of Health Policy at Center for American Progress. | ||
| Then Article 3, Project Founder and President Mike Davis, on the legal challenges facing President Trump's agenda and the administration's claims about the 2016 Russia probe. | ||
| And President Truman's eldest grandson, Clifton Fruman Daniel, discusses the 60th anniversary of the signing of Medicare and Medicaid and President Truman's healthcare legacy. | ||
| C-SPAN's Washington Journal. | ||
| Join in the conversation live at 7 Eastern this morning on C-SPAN, C-SPAN Now, our free mobile video app, or online at C-SPAN.org. | ||
| C-SPAN, Democracy Unfiltered. | ||
| We're funded by these television companies and more, including Mediacom. | ||
| Dear Future, we're on a mission to make small-town America bigger than anyone ever dreamed. |