Review of an agreement with the United States | Experts call on Ottawa to make more trade efforts

(Washington) A group of experts is sounding the alarm: Ottawa must quickly move closer to the United States, or Canada will be at a serious disadvantage in the imminent revision of a crucial trade agreement.

“We’re running out of time very quickly,” said Perrin Beatty, co-chair of the Expert Panel on Canada-U.S. Relations.

The independent panel, which includes former diplomats, political advisers and business leaders, was created in recent months amid concerns that Ottawa was “sleepwalking” ahead of the 2026 review of the Canada-United States-Mexico Agreement (CUSMA), Beatty said.

A new report from the panel says Canada needs to get its house in order before formal negotiations begin. It calls on Ottawa to clarify its objectives and launch a clear strategy, appoint a chief negotiator and work with Canada’s business community.

“The train is leaving the station quickly,” warned Mr. Beatty, also president and CEO of the Canadian Chamber of Commerce.

Memories of NAFTA

The negotiation of CUSMA, commonly dubbed “the new NAFTA” in Canada, was a key test for Ottawa after Donald Trump’s victory in the 2016 presidential election.

“The new NAFTA represents a victory for Canadians of all political stripes and in every region of the country,” Deputy Prime Minister Chrystia Freeland said in January 2020. “This was a true Team Canada effort.”

Still, Robert Lighthizer, the trade representative in the former Trump administration, criticized Canada’s handling of the renegotiation in his book. He said that at one point, the two countries weren’t talking and that “NAFTA was hanging by a thread.”

The new report describes Mr Trump’s current relationship with the liberal government as “cold at best”. If the former president returns to the White House, he will likely aim to disrupt global trade and has already announced plans to impose 10% tariffs on imports.

That doesn’t necessarily mean Canada can ease up under a Democratic president. Joe Biden has largely maintained his predecessor’s tariffs, despite promising to roll them back. There was also tension over the Biden administration’s Buy American provisions.

Many expect Kamala Harris, who is pushing for the Democratic nomination now that Mr. Biden has ended his race, to follow in her predecessor’s footsteps on Canada-U.S. relations.^me Harris, however, was one of 10 U.S. senators to vote against Trump’s trilateral deal, saying it did not do enough to protect American workers and the environment.

The federal government is monitoring opinions on the deal in Canada, the United States and Mexico, says Global Affairs Canada spokesperson Jean-Pierre Godbout. Ottawa is considering a range of potential scenarios to consider, he said.

“When the time comes, the government will be ready to move forward and defend Canadian interests,” Mr. Godbout reassured in an email.

Deterioration of relations

Mr. Beatty explains that the problem is that the relationship between the two countries has “moved from a strategic relationship to a transactional relationship.” In addition, Canada has become a less important trading partner for the United States than other countries in the world.

Ottawa will have to make the case for Canada’s importance for other things like security, said Fen Hampson, co-chair of the panel.

“It’s not going to be easy,” warned the Carleton University international affairs professor. “We really have to up our game.”

Industry Minister François-Philippe Champagne has been making regular visits south of the border as part of the Team Canada engagement strategy. Canada’s Ambassador to the United States, Kirsten Hillman, has been working hard from state to state and recently attended the Republican National Convention in Milwaukee, where she championed Ottawa’s cause.

The report, however, indicates that there are limits to Canada’s charm offensive. Americans are looking closely at Canada, but not in a good way.

Justin Trudeau faced significant pressure over Canada’s defence spending while in Washington for the NATO leaders’ summit earlier this month.

The prime minister has promised to meet NATO’s spending target of 2 per cent of gross domestic product by 2032. He has been criticized, however, for the length of his timeline and the lack of details on how Ottawa will get there.

Americans across the political spectrum have also been extremely critical of Canada’s new digital services tax, which hits large foreign companies. The Office of the United States Trade Representative has said it will work to end the tax.

Canada must stop “pulling the tail feathers of the American eagle” by positioning itself as part of the solution rather than the problem, Mr. Beatty urged.

This means the federal government should develop a Hippocratic oath, like the one taken by doctors, he argued.

“First, do no harm.”