Trudeau Touts Nafta's Benefits to Pence on Eve of U.S. Deadline

Jul 14, 2017 4:22 pm ET

(Bloomberg) -- Canadian Prime Minister Justin Trudeau, addressing Vice President Mike Pence and more than 30 state governors, said his country and the U.S. would benefit more from enhancing Nafta than from seeking protectionist “shortcuts.”

Speaking Friday to the National Governors Association in Providence, Rhode Island, Trudeau said Canada is the top export destination for two thirds of U.S. states, and is the country’s “biggest, best customer by far,” ahead of countries such as China and the U.K. He also held up auto-parts maker Magna International Inc. and construction supplier Canam Group Inc. as examples of Canadian firms that create jobs on both sides of the border.

Time is winding down before negotiations on the North American Free Trade Agreement are due to begin next month. Trudeau, the first sitting prime minister to address the NGA, spoke ahead of a Monday deadline for the U.S. to release its objectives under the fast-track process with Congress for any renegotiation of the 23-year-old deal.

The prime minister said he’s reaching out to a broad array of U.S. lawmakers to remind Americans that it can be easy to take the longstanding cooperation between the two nations for granted. He said Nafta can be renegotiated to the benefit of all parties, and working families would lose if protectionism took hold instead.

“If anything we would like a thinner border for trade, not a thicker one,” Trudeau said. “Free trade has worked, it’s working now.”

Lumber, Dairy and Aerospace

While U.S. officials have suggested its trading relationship with Canada may only need to be tweaked, there has been a mismatch between words and deeds. The U.S. imposed new tariffs on softwood lumber and raised concern with subsidies in the dairy industry. Montreal-based Bombardier Inc. is facing a complaint from Boeing Co. over sales of its new C Series model. Overshadowing it all is President Donald Trump’s suggestion that he could quit Nafta if the talks don’t work out.

The Canadian leader’s speech to the governors followed an address by Pence, and the two also held a private meeting Friday.

Trudeau said in his remarks that while Nafta isn’t “perfect,” no major trade agreement is. The temptation to erect new trade barriers should be avoided, he said.

“Sometimes getting it right means refusing to take the politically tempting shortcuts, more trade barriers, more local content provisions, more preferential access for home grown players in government procurement, for example, doesn’t help working families over the long term, or even the mid-term,” Trudeau said.

Canada and the U.S. have trade that is “well balanced,” Trudeau said, calling it “the
most successful economic partnership in the history of the world.”

Even still, Trudeau said Canada has to work harder as a smaller country, even one neighboring the U.S., to make its case.

“Sometimes we take each other for granted,” he said. “The principals invariably live to regret it.”

--With assistance from Josh Wingrove and Mark Niquette

©2017 Bloomberg L.P.