Trump signals broader renegotiation of NAFTA

Commerce Secretary Wilbur Ross says NAFTA does not properly address lumber and dairy

President Donald Trump speaks with reporters on Air Force One while in flight from Andrews Air Force Base, Md., to Palm Beach International Airport, Fla., Thursday, April 6, 2017. (Alex Brandon/AP/CP)

President Donald Trump speaks with reporters on Air Force One while in flight from Andrews Air Force Base, Md., to Palm Beach International Airport, Fla., Thursday, April 6, 2017. (Alex Brandon/AP/CP)

WASHINGTON – President Donald Trump’s surprisingly caustic complaints about trade with Canada in recent days could be setting the stage for a broader renegotiation than previously signalled of the North American Free Trade Agreement.

The administration is suddenly suggesting that irritants like dairy and softwood lumber could be on the table in the update to NAFTA, rather than just the minor tweaking the president spoke of a few weeks ago.

On Tuesday, Trump’s point man on the file explicitly linked individual disputes to the broader negotiation. Commerce Secretary Wilbur Ross said the reason lumber and dairy have erupted as irritants is they’re not properly addressed in the old agreement, which he calls obsolete.

“Everything relates to everything else when you’re trying to negotiate,” Ross told a news briefing at the White House.

“Think about it: If NAFTA were functioning properly, you wouldn’t be having these kinds of very prickly, very unfortunate, developments back to back. . . . If NAFTA were negotiated properly, you wouldn’t have these.”

MORE: Softwood lumber: Well, that escalated quickly

When a reporter pointed out that dairy and lumber aren’t part of the free-trade agreement, Ross replied: “That’s one of the problems.”

As trade tensions escalated with Canada, he made that case from the White House press room podium. He was there to explain why the U.S. administration had begun slapping tariffs averaging 20 per cent on softwood lumber — the latest move in a long-standing dispute.

That led to an unusual scene. The White House’s daily briefing began with exchanges about the most arcane Canadian trade issues, like stumpage fees from public land and dairy regulations that have limited imports of milk proteins.

Some American reporters asked why he was so ostentatiously picking on Canada, such a close ally and neighbour. Ross replied: “They’re generally a good neighbour. That doesn’t mean they don’t have to play by the rules.”

Canadian officials voiced a theory a few days ago about all the sudden, heated rhetoric: one said it’s a negotiating tactic, representative of Ross’s style.

That theory appeared to gain currency Tuesday.

Ross himself used the most highly visible platform in Washington to talk about softwood lumber duties, then linked what’s normally an under-the-radar issue in Washington to the broader NAFTA negotiation and fielded questions from U.S. network correspondents about it.

MORE: Trump attacks Canada’s supply management for dairy as unfair to U.S.

The Canadian government isn’t necessarily displeased by this.

One official said the softwood element could be welcome, depending on where negotiations go. In fact, the very first thing Canada said it wanted in a new NAFTA, the day after Trump’s surprise election win, was a long-term deal on lumber.

One official already has an answer ready for the Americans if they complain about Canada’s supply management in dairy, which restricts imports: “The U.S. has supply management for home lumber.”

The Canadian government has also been reaching out to allies throughout the U.S.

Federal ministers have been fanning across country, meeting Americans who benefit from cross-border trade. One example of an ally is the National Association of Home Builders.

On Tuesday, the association put out a statement denouncing the lumber tariff, calculating that fears of impending tariffs had driven up wood prices and added almost US$3,600 to the cost of a typical home.

“These price hikes have negative repercussions for millions of Americans,” said the group.

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