Canada-U.S. 2018

Written by  //  July 25, 2018  //  Canada, Trade & Tariffs, U.S.  //  No comments

See also Canada-U.S. 2015-2017
NAFTA

A ‘safe country’ dilemma for Canada
Understanding the recent wave of migrants crossing into Canada requires an explanation of the Safe Third Country Agreement. Celine Cooper lays out its origins, impact and the various reasons many are now calling for its repeal.
(Open Canada) Is the United States a safe country for refugees?
The question isn’t new. But the rapidly evolving political, legal and policy context for asylum seekers in the United States under President Donald Trump has lent it an unprecedented urgency.
The Safe Third Country Agreement between Canada and the US has been in effect since December 2004. In the wake of the 9/11 attacks, the two countries entered into wide ranging discussions around border control. In exchange for agreeing to cooperate on information sharing and other enhanced border security measures, the US consented to enter into a STCA with Canada.
In Canada, there is mounting pressure from refugee advocates, academic and legal experts, and a number of prominent civil society organizations — including the CCR, the Canadian Association of Refugee Lawyers (CARL), Amnesty International and the Canadian Council of Churches — for Canada to revisit or suspend the STCA with the US.
Calls to repeal the STCA existed long before Trump came to power, in part because of procedural and outcome discrepancies for asylum seekers between the two countries. For example, Canada has officially recognized gender-based persecution under the definition of a refugee since 1993 while the US does not. Refugee claimants in Canada also have greater access to government-funded services and can apply for work and student authorization while their claims are processed.

7 July
Paul Krugman: How to Lose a Trade War
Trump’s tariffs are badly designed even from the point of view of someone who shares his crude mercantilist view of trade. In fact, the structure of his tariffs so far is designed to inflict maximum damage on the U.S. economy, for minimal gain. … almost none of the Trump tariffs are on consumer goods
Canada’s picture is complicated by its direct response to aluminum and steel tariffs, but those industries aside it, too, is following a far more sophisticated strategy than the U.S.:
Except for steel and aluminum, Canada’s retaliation seemingly attempts to avoid messing up its engagement in North American supply chains. In broad terms, Canada is not targeting imports of American capital equipment or intermediate inputs, focusing instead on final goods.
And like China, Canada is clearly trying to inflict maximum political damage.
Canada Strikes Back! Here Is a Breakdown

28 June
Ottawa’s push to share more border-crossing data with U.S. raising red flags over privacy
Bill C-21 would result in the collection of data on all Canadians entering and leaving the country
The bill quietly cleared the House last week and is awaiting Senate debate in the fall. Once enacted, it would allow the government to keep tabs on just how long someone was outside the country — information that could be used to claw back social benefits like Old Age Security (OAS), Employment Insurance (EI) and the Guaranteed Income Supplement (GIS) from those who have been away too long to qualify.
The information collected under C-21 also could be used to track whether prospective citizens — permanent residents — have met strict residency requirements. The data could help the government keep tabs on high-risk travellers for national security purposes, or track down foreign nationals who have overstayed their visas.
In particular, sharing all this data with the administration of U.S. President Donald Trump is a “big concern.”
“We have seen in the past sharing information with the U.S. has led to horrific human rights violations, in the case of Maher Arar, and others … It was all from sharing erroneous, inaccurate information with U.S. agents and governments that practised torture,” Anne Dagenais Guertin, a research and communications coordinator at the group, told CBC News.

15 June
Conrad Black: Take heed Canada: the U.S. would win a true trade war
Behind the peeling façades of Norman Rockwell and Walt Disney, the United States is a monster, and not always an amiable monster.
(National Post) If Canadians are blinded by their visceral dislike of Donald Trump, as the antithesis of Canadian criteria for likeable public figures, they will be exposed to the ruthless pursuit of the national interest that in his own career propelled him from technical insolvency to immense wealth and celebrity and then, against all odds, to control of a great political party and to the headship of the most powerful country in the world. If these talks blow up, the U.S. doesn’t have to settle for WTO rules; it can impose outright protectionist measures. Justin Trudeau has been agile, and the country has responded admirably. But Canadian policy-makers must understand that they are playing for almost mortal stakes with potentially dangerous protagonists who have no sense of fair play and no interest in what Canada thinks of them.

13 June
A Trumped-up charge against Canadian dairy tariffs
(Brookings) President Trump and his Administration have based their public spat—and that is putting the term mildly—with Canada on that country’s “270 percent” tariffs on U.S. dairy imports. Some facts would help to put this claim in perspective.
First, Canada’s props up its dairy industry by using both import quotas and domestic production quotas. As part of this system, Canada has negotiated import quotas with each of its major trading partners.  The U.S. has obtained a favorable quota and, as a result, exports more dairy products to Canada than it imports from Canada. In 2017, Americans sold $792 million in dairy products to Canada, while Canadians sold $149 million in dairy products to the U.S., creating a tidy trade surplus for the U.S. of nearly $650 million.
Second, Canada only imposes high tariffs on imports above the quota, not on all the dairy products U.S. producers sell to them. For example, Canadian tariffs on dairy products within the quota are often zero and never more than a few percent. Above the quota, tariffs on dairy products range from 200 percent to over 300 percent. As a practical matter, no dairy products are sold to Canada outside the quota, so no U.S. exports really pay a high tariff.
Third, in addition to subsidizing domestic dairy production, the U.S. also uses a quota system to elevate prices for many farm products, including dairy. U.S. import quotas for dairy products are so low, and tariffs for imports above quota are so high, that, except for cheese, imports of dairy products account for less than one percent of domestic U.S. sales. Canada’s tariffs on U.S. dairy products are based in part on the value of U.S. quotas and tariffs. This practice is the kind of reciprocity that the President claims he wants in all U.S. trade deals—but on dairy trade between the U.S. and Canada, it’s already happening.

12 June
Diplomacy Trump-Style: Understanding Narcissism
by Don Lenihan
Trump’s team is not arguing that Trudeau said something new or different at the press conference. Their claim is that at the bilateral meeting everyone agreed to move on, but that Trudeau then cheated on the agreement. This was the trigger for Trump’s tweets.
(National Newswatch) Trudeau defends his performance at the G7 press conference by noting that he didn’t say anything there that he had not already said publicly or privately to Trump.
Trump advisor Larry Kudlow think this sidesteps the real issue. He focuses on the bilateral meeting where the two leaders discussed trade. According to Kudlow, “they were getting along famously…We were very close to making a deal with Canada on NAFTA…”
CBC’s Rob Russo provides further details. At that meeting, he says, Trump unexpectedly waived his demand for a sunset clause, which was the main obstacle to an agreement. Suddenly, the logjam broke and a deal was within reach. When Trump took off for Singapore, the understanding was that the NAFTA negotiations would quickly resume. Everyone was optimistic.
Kudlow believes that at this meeting Trump and Trudeau effectively made an agreement to move on from their differences, but that Trudeau then violated it at the press conference.
In Trump’s mind, the decision to waive the sunset clause had been a generous act of reconciliation. Yet Trudeau publicly denigrated him just to score political points with Canadians.

10 June
Sorry, Canada: Americans apologize for their President’s words
Americans have written dozens of letters to The Globe and Mail reacting to Donald Trump’s conduct at the G7 meeting of world leaders in Quebec. Here are 22 of the letters:
Trump’s ‘Bully’ Attack on Trudeau Outrages Canadians
(NYT) It takes a lot to rile people in this decidedly courteous nation. But after President Trump’s parting shots against Prime Minister Justin Trudeau on the day he left the Group of 7 summit meeting in Quebec, the country reacted with uncharacteristic outrage and defiance at a best friend’s nastiness.
Trudeau takes his turn as Trump’s principal antagonist, and Canadians rally around him
(WaPost) President Trump has helped bring together the most bitter of Canadian enemies, as he lashed out at Trudeau following the Group of Seven meeting in Quebec, and even the country’s most staunch conservatives have publicly backed up their Liberal prime minister for taking a tough tone in the U.S.-Canada trade conflict.
“I think sometimes, you know, you have to tell the schoolyard bully that they can’t have your lunch money. And I think that’s what the prime minister did today,” said Jaime Watt, a Toronto-based conservative political strategist. “I think most Canadians would say that they were proud of their prime minister.” …
Harper himself took to Fox News this weekend to criticize Trump’s actions at the G-7. Another high-profile Canadian conservative also tweeted support of Trudeau: Doug Ford, the brother of late Toronto mayor Rob Ford and who this week was elected leader of the province of Ontario. “We will stand shoulder to shoulder with the Prime Minister and the people of Canada,” Ford wrote.
Trump Economic Adviser Ties G-7 Pullout to North Korea Meeting
(NYT) President Trump’s top economic adviser said on Sunday that Mr. Trump had pulled out of a joint statement with allies at the Group of 7 meeting over the weekend because a “betrayal” by the Canadian prime minister had threatened to make Mr. Trump appear weak before his summit meeting on Tuesday with North Korea’s leader.
The adviser, Larry Kudlow, said that Mr. Trump had no choice but to take the action after the prime minister, Justin Trudeau, said in a news conference that Canada would not be bullied by the United States on trade.
Mr. Trump “is not going to let a Canadian prime minister push him around,” Mr. Kudlow said, adding, “He is not going to permit any show of weakness on a trip to negotiate with North Korea.” …

9 June
‘The gig is up’: Trump demands Canada dismantle supply management or risk trading relationship
‘We don’t want to pay anything, why should we pay anything?’ Trump says of Canadian tariffs on dairy products
(CBC) U.S. President Donald Trump says Canada will have to dismantle its supply-managed dairy system or else Americans will dramatically curtail its trading relationship — a shot across the bow at Prime Minister Justin Trudeau, who has vocally defended the country’s existing agricultural policies in the face of U.S. opposition.
“No tariffs, no barriers, that’s the way it should be and no subsidies. In other words, let’s say Canada, where we have tremendous tariffs. The U.S. pays tremendous tariffs on dairy, as an example, 270 per cent … we don’t want to pay anything, why should we pay anything?” Trump said, referencing the Canadian tariff imposed on U.S. and foreign milk imports.
Canada levies a tariff of 270 per cent on milk, 245 per cent on cheese and 298 per cent on butter in an effort to keep U.S. and other foreign dairy imports out.
(iPolitics) Dairy 101: The Canada-U.S. milk spat explained (April 2017)

31 May
Lawrence Martin: Get ready for an extended, destructive trade war
U.S. President Donald Trump promised Prime Minister Justin Trudeau he would not impose steel and aluminum tariffs on Canada. It happened not just once over the last few months but on three separate occasions, Canadian officials say.
So much for presidential promises. So much for the idea that playing nice with the mercurial man works. Canada got slammed with the tariffs anyway. It didn’t matter that the United States has a large surplus in steel trade with Canada. It didn’t matter that the national security rationale for the tariffs, as Prime Minister Justin Trudeau rightly pointed out, is bogus. The attempts to be reasonable, to temper the retrograde Hoover-era protectionists in Washington failed.
The Trudeau government couldn’t sit idly by in the face of Mr. Trump’s aggression. Mr. Trudeau has played kid-gloves diplomat with nothing in return from this President for long enough. For self-respect and for economic justice, he had to hit back hard and his retaliatory measures are strong.
Canada hits back at U.S. with dollar-for-dollar tariffs on steel, aluminum, maple syrup
Tariffs of 25% on imported steel and 10% on aluminum announced by U.S. Commerce Secretary Wilbur Ross
(CBC) The government is soliciting public comments on its plans until June 15. The new Canadian tariffs would kick in July 1.
Trudeau called the Trump administration’s national security argument “inconceivable” and called the tariffs “an affront to the Canadians who died” alongside Americans in battle.

29 March
Canada 150 research chairs draw scientists fleeing Trump, guns and Brexit
The haul of prominent scientists attracted to the new chairs suggests that a predicted brain gain for Canada owing to reactionary politics in the United States and elsewhere is having an impact and that scientists are indeed voting with their feet
A total of 25 Canada 150 research chairs will be established at Canadian universities under the one-off program, supported with $117.6-million in federal funding. Four chairholders were already named late last year, including computer scientist Margo Seltzer who, like Dr. Aspuru-Guzik, is leaving a faculty post at Harvard to come to Canada.
“I think it speaks to what Canada is doing here in science,” federal Science Minister Kirsty Duncan said. “We’re in a global competition for talent.”
Several of the appointees who spoke to The Globe and Mail before Thursday’s announcement were enthusiastic about what they perceive to be a collaborative, pro-research culture in Canada. But many also expressed a sense of relief when speaking about what they were coming from.

15 March
Donald Trump admits making up ‘facts’ in trade meeting with Justin Trudeau
US president told donors ‘I had no idea’ when he complained to Canada’s prime minister over (non-existent) trade deficit
(The Guardian) Donald Trump bragged that he made up facts in a meeting with the Canadian prime minister, Justin Trudeau, according to an audio recording obtained by the Washington Post.
The office of the US trade representative states that the American goods and services trade surplus with Canada was $12.5bn in 2016.

11 March
‘Canadians should understand that we are under attack,’ says Canada’s former trade ambassador
(CBC Radio) Speaking to The Sunday Edition’s Michael Enright, Gordon Ritchie accuses Trump of willful ignorance and says Canadians should not underestimate the damage he can cause on both sides of the border.
“We are under attack. And the result of Mr. Trump’s occupancy of the White House will be that Canadians will enjoy a lower standard of living, lower rates of growth, and lower employment than otherwise would be the case. And that’s almost irrespective of how it plays out — just the threats alone are enough to chill investments in Canada and encourage companies to look at the big market, where there’s less border risk, than to put stuff in Canada.”

29 January
Canada suggests a deal on softwood lumber may lead it to drop WTO case against U.S.
(National Post) “We are aware that the U.S. is concerned by our litigation. And to those concerns, I have a very clear response and a clear offer, which is: let’s sit down and let’s negotiate a softwood lumber deal,” the [Foreign Affairs Minister Chrystia Freeland] told reporters following her earlier appearance with Lighthizer and their Mexican counterpart, Ildefonso Guajardo.
A big challenge in reaching a softwood deal is that it’s not entirely up to the governments of Canada and the U.S.
As part of any deal, the American lumber industry would need to sign off on the right to sue Canada again for punitive duties — and there’s no indication that’s happening.

26 January
Bombardier wins bid to overturn 292% tariffs at U.S. trade body
U.S. International Trade Commission says C Series planes do not harm U.S. industry, Delta welcomes decision
(CBC) Bombardier Inc. has won its fight against almost 300 per cent duties applied to U.S. imports of its C Series aircraft.
The U.S. International Trade Commission in Washington, D.C., ruled Friday that “100- to 150-seat large civil aircraft from Canada do not injure U.S. industry.”
Boeing had claimed it stood to suffer harm by the planes, even though aircraft destined for U.S. customers are now slated to come from a new assembly line near the Airbus facility in Mobile, Ala.
Cross-border aircraft rivals Bombardier, Boeing clash in trade hearing

18 January
Trump presidency turns one: Our year of living vulnerably
One year into Trump’s term, what has Canada learned as it adjusts to life ‘strapped to a madman?’
By Stephen Marche
(Open Canada) Is Trump America? Is America Trump?
For Canada, these seemingly abstract questions are eminently urgent and practical, because they affect essential matters of foreign policy and trade. In the short term, how should we negotiate with Trump? But also, how should we negotiate with an America so divided against itself? In the long term, are the Trump years merely an interruption in an otherwise more or less wonderful relationship? Or are they the signal of collapse, the first crack of a deeper sundering? …
Perhaps because of his essential unpredictability, which makes strategy itself less viable, the Trump presidency has brought out the best in our political class as a whole. The multi-pronged and bipartisan approach to these recent NAFTA negotiations has been one of the most well-prepared and well-executed diplomatic movements in Canadian history. Personalizing the relationship to Trump while nonetheless subverting his negotiating power has been a fine line to navigate; it has required an immense coordination of different parties and multiple levels of government and previous governments with current governments. The urgency and obvious national importance of NAFTA — 78 percent of Canadian merchandise exports go to NAFTA countries — has unified the country’s politicians in an unprecedented way. We should be collectively grateful.

10 January
Canada Attacks U.S. Tariffs by Taking Case to World Trade Organization
(NYT) Canada has filed a sweeping trade case against the United States at the World Trade Organization, lobbing a diplomatic grenade at the Trump administration’s “America First” approach amid an increasingly embattled trade relationship between the longstanding North American allies.
The trade case could exacerbate tensions between the two nations, which have frayed in recent months as the countries wrestle with trade disputes and attempts to renegotiate the North American Free Trade Agreement. Canada’s case challenges the United States’ use of tariffs to punish unfair trade practices and protect its markets, saying those actions violate World Trade Organization rules.
Canada has borne the brunt of several United States trade actions, including a decades-long dispute over lumber and recent cases against Bombardier airplanes and Canadian newsprint.
It is already a fractious time for the two nations. Canada, Mexico and the United States will reconvene in Montreal on Jan. 23 for the next round of Nafta negotiations.
One of the most contentious issues is an American proposal to do away with a part of the pact known as Chapter 19, which allows Canada and Mexico to appeal America’s anti-dumping and anti-subsidy tariffs.
The United States argues that these appeals compromise its sovereignty, while Canada has refused to entertain the idea of eliminating their ability to appeal decisions.
Canada has not been targeted as frequently by the United States’ anti-dumping and anti-subsidy tariffs as some other nations, notably China. But they often become major public issues in Canada and a significant source of irritation between the countries.

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