“We know that the new president-elect has concerns with NAFTA, but they are about Mexico, not Canada.”
— interim Conservative leader Rona Ambrose.
Ever since Donald Trump appeared on an episode of the CBS television show “60 Minutes” in September 2015 disparaging the North American Free Trade Agreement, there have been concerns about what it could mean for Canada.
The 22-year-old trade agreement between Canada, the United States and Mexico has always had detractors — including Ambrose’s former boss, ex-prime minister Stephen Harper, who called it “unbalanced” on a trip to Mexico in 2014.
But Trump went much further. He called NAFTA a “disaster” in 2015, and said he would rip it up or renegotiate it if he ever won power.
Offering to sit down and talk about the agreement the day after Trump’s election win weakened Canada’s position, said Ambrose, especially since — in her view — Trump’s antipathy towards NAFTA was not really directed north of the 49th parallel.
Is that a realistic view of how Trump sees NAFTA?
Spoiler alert: The Canadian Press Baloney Meter is a dispassionate examination of political statements culminating in a ranking of accuracy on a scale of “no baloney” to “full of baloney” (complete methodology below).
This one earns a rating of “some baloney” — the statement is partly accurate but important details are missing. Here’s why:
Trump didn’t mince words about NAFTA during his Sept. 27, 2015, interview on “60 Minutes.”
“It’s a disaster,” he said. “We will either renegotiate it or we will break it. Because, you know, every agreement has an end.”
Throughout the campaign, Trump made dealing with NAFTA a cornerstone of his plan to create more jobs for Americans. At an April rally in Rochester, N.Y., he trashed trade in general — and singled out Canada.
“I like free trade, but free trade is not free trade, it’s dump trade because we lose with China, we lose with Mexico, we lose with Japan and Vietnam and every single country that we deal with,” Trump said.
“We lose with Canada — big-league. Tremendous, tremendous trade deficits with Canada.”
In a June 28 speech in Pittsburgh, Trump took at aim at NAFTA once more, saying he would “tell our NAFTA partners that I intend to immediately renegotiate the terms of that agreement to get a better deal for our workers.
“And I don’t mean just a little bit better, I mean a lot better. If they do not agree to a renegotiation, then I will submit notice under Article 2205 of the NAFTA agreement that America intends to withdraw from the deal.”
Trump did not single out Canada by name, referring only to “our NAFTA partners.” Campaign officials later distributed talking points that focused on Mexico, not Canada.
On Tuesday — well after Ambrose made her statement — CNN obtained what it described as a transition memo detailing Trump’s first 200 days. According to the network, the memo says Trump intends to begin the process of withdrawing the U.S. from NAFTA on the first day of his presidency.
That process would see the U.S. trade representative notify Mexico and Canada that it wants major changes, including adding softwood lumber. Trump also wants to include currency manipulation, country of origin labelling and environmental and safety standards, CNN reported.
The document also reportedly asks that “extra consideration” be given “to the effects such a policy change may have on the middle class, manufacturing and service sector workers, and foreign direct investment into the United States.”
What the experts say
Former Pennsylvania senator and one-time Republican presidential hopeful Rick Santorum said Wednesday that he’s spoken personally with Trump about his NAFTA message, and is convinced the U.S. president’s principal target is Mexico.
For Canada, the NAFTA bluster represents an opportunity, said Santorum, who expects the U.S. officials to pursue separate bilateral deals with the two countries.
Lawrence Herman, a Toronto-based trade lawyer with Herman and Associates, said the latest leaked documents make it absolutely clear that Canada is in Trump’s trade crosshairs.
“Canada will be a target in the aggressively protectionist Trump trade agenda,” Herman said.
“Canadian softwood lumber, beef exports and dairy supply management are all on the Trump shortlist. So we need to be prepared for some dark and stormy days ahead with our American neighbours.”
Scott Sinclair, trade researcher with the Canadian Centre for Policy Alternatives, said Ambrose was not entirely wrong, because most of Trump’s campaign rhetoric on NAFTA was largely aimed at Mexico.
“But what it omits is that if a more nationalist Trump administration plays hardball on NAFTA, it will definitely affect Canadian interests.”
Sinclair said the U.S. has a long list of grievances with Canada when it comes to trade — everything from supply management, to telecoms services, to softwood lumber to intellectual property protection for medicines.
“The Canadian government needs to come to the NAFTA renegotiating table with its own set of demands: not just maintaining tariff-free access to the U.S. market, but getting rid of negative features such as NAFTA Chapter 11, which has resulted in Canada being the most sued NAFTA party.”
Sinclair said Mexico and Canada should join forces. Indeed, The Canadian Press reported Wednesday that Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto spoke last week about trade issues following Trump’s victory.
Adam Taylor, a trade consultant and former aide to ex-Conservative trade minister Ed Fast, says Ambrose may have a point that Trump is more concerned about Mexico than Canada.
But given that all three countries have highly integrated economies, “any moves to affect just one will inevitably affect all. To suggest otherwise doesn’t appreciate the 21st century realities of the North American production platform.”
Much of Trump’s anti-trade rhetoric has been wrapped up in his broader disdain for Mexico. But even before he became the Republican nominee, and then the president-elect, he made no secret of the fact he didn’t like NAFTA and would either seek to have it amended or killed. That has implications for Canada, whether or not Trump names Canada in his anti-trade tirades.
The leaked document about his transition plan, obtained this week by CNN, leaves no doubt about that — although Ambrose didn’t have the benefit of that knowledge when she made the remark.
For those reasons, Ambrose’s assertion that Trump’s NAFTA rhetoric is aimed at Mexico, not Canada, contains “some baloney.”
The Baloney Meter is a project of The Canadian Press that examines the level of accuracy in statements made by politicians. Each claim is researched and assigned a rating based on the following scale:
No baloney — the statement is completely accurate
A little baloney — the statement is mostly accurate but more information is required
Some baloney — the statement is partly accurate but important details are missing
A lot of baloney — the statement is mostly inaccurate but contains elements of truth
Full of baloney — the statement is completely inaccurate