Canada Must Hold Ground in Upcoming Trade Negotiations

Key Takeaways

• Canada is set to review its free trade deal with the United States next year and must stand firm for a good deal
• Rushing into a deal at any cost is not a viable approach, and Canada must remember it has leverage in these talks
• The review of the Canada-U.S.-Mexico trade deal (CUSMA) will hinge on resolving concerns about Canadian policies on dairy products, alcohol, and digital services
• Canada must play hardball and not allow tariffs to be legitimized in any form
• The United States is facing internal pressure due to the impacts of tariffs on its economy, which puts Canada in a better position for negotiations

Introduction to Trade Negotiations
As Canada approaches a review of its key free trade deal with the United States next year, Unifor national president Lana Payne emphasizes the importance of standing firm for a good deal. Payne is concerned about the views of some in the business community who have pushed to reach trade deals quickly, as she believes that rushing into a deal at any cost is "absolutely the most terrible approach to negotiations." Canada has to remember that it has leverage in these talks and must use it to its advantage. Prime Minister Mark Carney has announced that Canada will enter into formal discussions with the United States in January to review their free trade agreement, which will be a crucial moment in the country’s trade relations with its southern neighbor.

Concerns and Priorities
The review of the Canada-U.S.-Mexico trade deal, also known as CUSMA, will hinge on resolving concerns about Canadian policies on dairy products, alcohol, and digital services. Washington’s trade representative has expressed concerns about access to Canada’s dairy market and Canada’s exports of certain dairy products. In response, Carney has stated that Canada has been clear about its intention to protect the supply management of agricultural products, while being open to striking deals on specific sectors like forestry. Payne agrees that Canada must protect its dairy market and other sensitive sectors, and that the government must be prepared to play hardball in the negotiations.

The Impact of Tariffs
Canada has also been in talks with the U.S. on sectoral tariffs that have hit industries like autos, forestry, and metal production especially hard. Payne argues that Canada needs to hold out and let the "self-inflicted wounds" of tariffs create pressure on the U.S. instead of legitimizing them. The tariffs have already had significant impacts on the U.S. economy, including the loss of manufacturing jobs, downward direction of new hires and payrolls, and negative effects on the tourism industry and small businesses. According to Payne, these internal pressures in the U.S. put Canada in a better position for negotiations, as the "cake is baking down there right now." This means that Canada has more leverage in the talks and can push for a better deal.

Dealing with Unpredictability
The talks are still daunting, however, due to the unpredictability of the U.S. administration, particularly President Trump. Payne notes that Trump’s potential decision to withdraw the U.S. from the trade deal is a concern, and Canada needs to be ready for a range of possibilities. "We have to be able to respond accordingly, but we also can’t be conditioned into taking a bad trade deal just because they’re threatening us," she said. This unpredictability requires Canada to be flexible and prepared for different scenarios, while remaining firm in its commitment to protecting its interests and securing a good deal.

Conclusion and Future Outlook
In conclusion, the upcoming review of the Canada-U.S. free trade deal will be a critical moment in the country’s trade relations with the United States. Canada must stand firm and use its leverage to secure a good deal, rather than rushing into a bad one. The impacts of tariffs on the U.S. economy have created internal pressure, which puts Canada in a better position for negotiations. However, the unpredictability of the U.S. administration requires Canada to be prepared for different scenarios and to remain flexible in its approach. By playing hardball and protecting its interests, Canada can secure a good deal that benefits its economy and its people. As the talks begin in January, Canada must remain vigilant and committed to its goals, and ensure that it emerges from the negotiations with a deal that is fair and beneficial to the country.