Canada’s trade representative issued some pointed criticism which appeared aimed at the Trump administration’s belligerent stance on trade negotiations, while wooing Southeast Asia at the ASEAN economic ministers’ meeting in Singapore on Saturday.
“We come together at a time when many countries are looking inward. We are seeing major powers taking advantage of the evolving trade landscape, pushing forward their own self-interested continental strategies,” James Carr, Canada’s minister of international trade diversification, said on Saturday at the meeting in the Shangri-La Hotel.
“Canada’s goals in ASEAN are for mutual advantage: For trade that creates jobs on both sides of the Pacific, for trade that protects and builds on the benefits of the trade that we enjoy today and for trade that respects and upholds the rules-based international trading system and multi-laterialism,” Carr added. “We value a rules-based order where might does not equal right.”
Carr’s remarks come both as Canada is seeking a Canada-ASEAN free trade agreement and as it deals with an economy heavily dependent upon the U.S., where the Trump administration has shown hostility toward upholding existing trade agreements, including the NAFTA, or North American Free Trade Agreement, between the U.S., Canada and Mexico.
Dependence on US trade
Canada’s trade is heavily weighted toward the U.S.: In 2017, 76 percent of its merchandise exports headed to the U.S. and in 2016, 54.9 percent of its commercial services exports also went to its Southern neighbor, according to data from the World Trade Organization.
It’s a two-way street: 51.4 percent of Canada’s merchandise imports were from the U.S. in 2017 and in 2016, 55.5 percent of its commercial services’ imports were from its Southern neighbor, the data show.
But talks to update NAFTA appear to be mired. While the U.S. heralded reaching a deal with Mexico, it has missed a Friday deadline to reach an agreement with Canada.
Leaked off-the-record remarks by Trump during a Bloomberg News interview which was published on Thursday, U.S. time, that he wouldn’t compromise with Canada, and that “it’s going to be so insulting they’re not going to be able to make a deal,” reportedly have complicated the talks. Bloomberg reportedly denied the leak of the off-the-record remarks was from its organization.
The U.S. Congress must approve any negotiated agreements to revise NAFTA; terminating NAFTA to approve a bilateral deal with Mexico would require Congressional approval, which analysts believe is unlikely to pass muster.
Additionally, U.S. trading partners have faced concern that the Trump administration wouldn’t honor U.S. commitments under existing trade deals, with unrelated matters often becoming tied to trade talks, while also appearing to try to poke holes in the global rules-based trading system.
Trump told Bloomberg News during the interview that he would pull the U.S. out of the World Trade Organization (WTO) if it didn’t “shape up,” claiming that the organization which has been a bedrock of global trade has treated the U.S. “very badly” and calling it the “single worst trade deal ever made.” To be sure, Trump has described many trade deals as “the worst ever.”
Those concerns have driven some U.S. trading partners to seek ways to lessen dependence upon American markets.
Canada’s Carr noted that it was only in July that “diversification” was added to his job title, with his mandate to expand Canada’s trade to key markets, particularly in the Asia-Pacific region.
Canada’s representative wasn’t the only country to appear to criticize Trump administration policies in public remarks.
Earlier in the day, Damien O’Connor, New Zealand’s minister of state for trade and export growth, also took aim: “Firstly, we’ll be defending the rules-based system centered on the WTO,” O’Connor said on Saturday.
Canada’s Carr also made what may be a veiled reference to recent U.S. policies targeting immigrants and restricting immigration.
“We appreciate our diversity,” Carr said, noting that the Philippines was largest source of new Canadians, with 2.5 percent of the country’s population identifying as Filipino.