Little progress being made in Canada-U.S. trade talks as Carney's focus shifts to Mexico

WASHINGTON, D.C. — When it comes to Canada-U.S. trade negotiations, things have been eerily quiet in Washington, D.C. recently.

Much of the focus in Washington has been on trade with the United Kingdom and U.S. President Donald Trump’s historic second state visit there this week. The trip promises plenty of royal pageantry that British leaders hope will persuade the American leader to lower tariffs on steel and aluminum imports.

Charles III’s first official visit to Canada in May to deliver the Speech from the Throne in person and open Parliament was, among other things, a way for Prime Minister Mark Carney to showcase his and the country’s royal ties in response to Trump’s fiery “51st State” rhetoric and trade war. But the pomp and ceremony playing out from Windsor Castle this week, with Trump referring to the king as his “friend,” means it’s the president’s turn to flex some royal muscle.

So, setting royal news aside, have Ottawa and Washington been holding tête-à-têtes in recent weeks?

A senior Canadian government source, who spoke on condition of anonymity, said there has been little contact between the U.S. and Canadian teams since late August.

A couple of weeks back, on Aug. 26, Dominic LeBlanc, the minister in charge of Canada-U.S. trade, Marc-André Blanchard, the PM’s chief of staff, and Michael Sabia, clerk of the Privy Council, had what were labelled “constructive” meetings with U.S. Commerce Secretary Howard Lutnick in Washington. LeBlanc said at the time that “technical discussions” between the two countries would continue.

The government source said that while the teams have been in touch by phone and text, “there’s nothing planned at this time” for in-person meetings. He added that there will be an opportunity to meet again soon, likely in a few weeks.

When asked how the Canadian team’s morale was holding up amid all the so-far fruitless efforts, he said all they can do is keep up the good work despite the challenges, acknowledging that “it’s a lot.”

“We’re just doing our best and hoping for the best,” the source added.

As for those “technical discussions,” he said those are happening “mostly at the official levels,” referring again to the discussions Sabia and the others had in late August, meaning there has been little movement.

This week, the focus is less on the U.S. and more on Mexico, with Carney preparing to meet with his counterpart, President Claudia Sheinbaum, on Thursday and Friday in Mexico City.

“It’s important for the upcoming review of the CUSMA,” the source said. “We want to keep a good relationship with them and keep our good power to negotiate and to review CUSMA with Mexico.”

He explained that staying close to Mexico can help Canada gain more leverage in the upcoming renegotiation of the trade deal.

“The president might want to divide and conquer, and only deal with Mexico and then deal with Canada, piece by piece,” he said, “but I think we believe that it’s good to have discussions as three nations altogether instead of one-on-one.”

Is Carney trying to negotiate a direct trade deal with Mexico in case CUSMA falls apart? “Not for now,” the source said, but he added that Carney will likely make news this week by signing something with Sheinbaum — an agreement “like a new partnership or something.”

He didn’t offer more details but said the new deal will help reinforce Canada’s relationship with Mexico.

As for the longevity of CUSMA, Washington sent a positive signal on Tuesday, when the Office of the U.S. Trade Representative announced the formal review process for the agreement, inviting public comments that are due on Nov. 1.

Jamie Tronnes, the executive director of the Center for North American Prosperity and Security, a project of the Macdonald-Laurier Institute, said she sees this move as promising.

“I think that’s a positive sign for the agreement in that the Americans are doing the USMCA process instead of throwing it all out, but we shall see,” she said.

The government source also seemed to think it was a good sign. “It’s a bit reassuring to see the U.S. following an actual process that is enshrined in law, so I guess it’s a bit encouraging.”

“But we’ll see. We can always be surprised.”

National Post

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