Full Comment - Why Carney is blowing trade talks with Trump

00:00:00.000 it seems that the center of our politics right now is international trade it's most of what we

00:00:07.700 talk about in this country hello and welcome to the full comment podcast i'm brian lily your host

00:00:12.080 and coming to you today from the sidelines of the vamp forum not inside the vamp forum because that's

00:00:18.920 that's a special uh session that happens and it's of course chatham house rules it's my first time

00:00:24.580 here really enjoying it but two distinguished people have agreed to join me for a discussion

00:00:29.880 about international trade people that know an awful lot about it ed fast served as international

00:00:34.200 trade minister in stephen harper's government he's also with the institute for research on public

00:00:38.740 policy where he serves on the board a strategist at sussex group strategy and where else did you

00:00:44.440 mcdonald laurier institute senior fellow louise blay also with me and she is a former ambassador for

00:00:51.660 canada diplomat that worked on trade files for years works alongside groups like the uh canada

00:00:57.920 u.s business council and both of them so knowledgeable so thank you so much um let me

00:01:04.340 start with you louise because you're in the states all the time i know you just came back

00:01:08.340 what is the feeling down there towards canada because right now you talk to americans that come here

00:01:15.300 and all they say is they feel nothing but anti-americanism yes it's true i i mean when we go down i spend

00:01:23.120 quite a bit of time in washington i spend quite a bit of time speaking with republicans and lawmakers

00:01:27.940 and people close to the white house and what strikes me is that there's more optimism about the

00:01:33.040 renewal of usmca than we have in canada they're all saying look it was a bipartisan agreement it was

00:01:38.840 donald trump's agreement um it'll get renewed it may be modified uh in certain parts there may be

00:01:47.080 things that will uh will have to be uh looked over but in their mind is something that's working many

00:01:52.780 provisions in there they're very happy about but there are a few things that they don't think um

00:01:57.140 have been uh respected or or or implemented in the right fashion or in the way that they had intended

00:02:02.920 so they want to revisit history a little bit but having said that um some of them are aware of the um

00:02:10.700 some of them are aware of the uh the uh the uh the the hurt and the the the negative feeling in

00:02:18.100 canada towards some of the measures that have been taken and some of the things that their president

00:02:22.060 has said others a little bit less are surprised that the canada is is this upset and what they

00:02:28.740 keep telling us is that look um yes you know it's too bad some things have been said but uh at the

00:02:35.000 end of the day you're our partner you'll continue to be our partner we'll get through this that's what

00:02:39.920 they say ed uh do you get the sense that perhaps canadians took things too personally in the

00:02:48.080 beginning and acted you know overreacted or do you think that the way that we have reacted as a

00:02:54.740 country is understandable given what donald trump said given the uh the quick and harsh changes to

00:03:02.720 the trading relationship well it's easy to be armchair quarterbacks and uh

00:03:09.560 second guess our leadership in ottawa uh what i would say is that as canadians we have to be

00:03:17.660 very careful that as we engage with the u.s in the lead up to the renegotiation of our free trade

00:03:24.260 agreement and as we try to negotiate away some of the tariffs that have already been levied against us

00:03:30.680 let's make sure we don't bite off our nose to spite our face because simply imposing retaliatory

00:03:38.180 tariffs means that we're actually penalizing canadians it's canadians that will pay the cost

00:03:44.300 of those tariffs because those tariffs have to be absorbed by business business is not willing to

00:03:50.080 absorb those for the most part so we're the ones that would pay for a retaliatory approach to the united

00:03:55.420 states what i i would say is this a renegotiation of kuzma our trade agreement uh represents some

00:04:04.400 significant peril to canada because within that narrow negotiation we have very few if any cards to

00:04:12.580 play now we've already seen that american ambassador pete hoekstra has discreetly signaled that

00:04:20.900 the americans have said let's do a bigger deal a broader deal that would bring into the discussion

00:04:27.360 the waterfront of outstanding issues between canada and the u.s and there are many but they're not

00:04:34.820 necessarily encompassed within a narrow trade negotiation and he seemed to indicate as well

00:04:41.460 that somehow those efforts to broaden out the negotiation have been rebuffed so it would concern

00:04:48.220 me if our government has said nope we want to do this on a sector by sector basis within the framework

00:04:53.540 of kuzma well then we don't have a lot of cards to play that places us in a very difficult situation

00:04:59.680 especially given the asymmetry in our bilateral relationship louise i see you nodding when i heard

00:05:07.760 ambassador hoekstra make those comments it kind of surprised me because what i've been hearing was

00:05:12.880 there was a a push to get a very high level 50 000 foot kind of view deal and that's what they were

00:05:21.520 talking about at the end of may beginning of june and then it was oh well we'll get that deal by

00:05:26.520 cananaskis in the middle of june of course those things never happen so what are you hearing on that

00:05:32.940 bigger deal smaller deal what what are the americans that you're talking to looking for

00:05:38.400 well it's interesting because um there there does seem to we do seem to be two ships passing in the night

00:05:47.020 i don't think we we're i'm hearing one thing from the americans i'm hearing another thing from the

00:05:52.240 canadians so that's very concerning it means that we're what are we talking about and and so one week to

00:05:58.200 the next i'm told that the americans have not made their position clear and then the next week i'm hearing

00:06:03.200 from the americans that they feel that we're not um we're not coming to the table uh with goodwill and

00:06:09.340 and and a a real position of negotiation so at that it's a little bit disconcerting to be hearing

00:06:15.940 completely different things and i think this is what tells me what this tells me is that we're not

00:06:21.000 speaking the same language yet it's taking a long time uh it's as if we're and we as canadians i have

00:06:27.620 seen us do this and it's not a criticism of any government uh in particular but i have seen

00:06:34.920 we come into the to the bilateral meeting we come into the negotiation with our list of things we

00:06:40.740 want to accomplish we don't come wanting to listen and we don't listen and i've seen um a

00:06:47.080 present company excluded because i never had the pleasure to work directly with you or

00:06:54.020 in bilaterals um uh surface but i have seen several times where the minister when we leave

00:07:00.960 the meeting the minister saying oh that went well i went i know very well it didn't go well and i get

00:07:06.320 the call from the american side that will tell me what was that so we we have not found even though

00:07:12.880 we're neighbors we'll work we're really close in many ways when it comes to speaking about hard

00:07:19.400 issues we don't seem to connect with particularly with republicans for some reason and um so that's

00:07:27.340 what that tells me so big deal small deal now i think we're back to the small deal whatever if we

00:07:32.780 were ever in a big deal i don't know and now we're going into we're being told it's steel aluminum

00:07:38.320 maybe auto lumber is being pushed aside as being too difficult to uh a nut to crack and that will get

00:07:46.320 the other stuff but it's friday now uh we're recording this uh on friday um after uh labor

00:07:54.140 uh after uh thanksgiving weekend you know it's this is almost two weeks now since the prime minister

00:08:01.260 was back in the oval office we just feel like it's it's or the momentum is is evading us yet again

00:08:09.080 i felt like carney and trump had a good moment in egypt at the signing of the peace deal and that

00:08:15.360 little joke about oh thanks for promoting me to president and and trump said at least i didn't

00:08:20.440 call you governor and they had a laugh and i thought i watched that with interest and i said okay

00:08:24.800 they seem to have a good rapport i don't think that our teams on the ground have a good rapport

00:08:30.500 but those two seem to we've got to use that to crack through we are um you know i i've been very

00:08:39.040 critical of the ambassador uh ambassador hillman not because i don't think she's a smart woman or

00:08:44.880 accomplished woman i just i watch her interactions and i said this is not a diplomat and then you've

00:08:49.580 got uh dominic leblanc who was a salesman he's a great kind of guy that you need for that he's going

00:08:54.880 down there all the time are we putting the right team in place ed as someone that's been in these

00:08:59.440 trade negotiations before do we have the right team in place and this is not a i want people to be

00:09:04.860 clear this is not a partisan criticism of this government because you you might have noted i

00:09:09.280 said put a big honking liberal named dominic leblanc in charge i mean you don't get more liberal than dom

00:09:14.880 uh i just want to have us to have the right players what's your sense of having the right players

00:09:20.840 well let me provide a bit of a counterpoint uh as someone who has worked very closely with

00:09:28.000 ambassador hillman when she was our chief negotiator on the tpp file uh her competence is beyond question

00:09:35.900 oh yeah i'm not talking about her competence no let's let's make sure we're not talking about her

00:09:40.120 competence um i i'm not in a position to comment on her diplomatic skills um i found her in negotiations

00:09:48.680 to exercise the highest levels of a diplomacy conventional diplomacy which i think was sorely lacking

00:09:57.880 over the last 10 years uh i think we lost our advantage when it comes to diplomacy but you asked about

00:10:05.600 the team um they're still putting together the team as we approach the formal commencement of

00:10:12.580 negotiations on kasma that team isn't yet crystallized and i'm not sure who's going to play a part of it

00:10:20.000 i know in the past we had some of the best negotiators in the world one of those was ambassador

00:10:24.940 hilderman when she was an ambassador steve ahul another one there's others that are still there

00:10:30.720 uh marvin hildebrand i believe might still be there um you know weldon app uh individuals within

00:10:38.380 the global affairs that direct specific areas of our global reach uh i'm confident that we have the

00:10:48.260 resources in canada put together a really strong team but before we do that we better have a strategy

00:10:56.020 in place and i am one that is not necessarily in favor of a narrow renegotiation of our trade agreement

00:11:04.080 because i think that puts us in significant peril i think we have to broaden out these negotiations so

00:11:09.920 we take advantage of our strengths like critical minerals we can offer the united states continental

00:11:15.780 defense by collaborating on the golden dome we can collaborate on providing them with an assured

00:11:21.160 supply of things like nuclear sorry uranium and things like potash so before we even get to

00:11:29.800 finalizing what our team looks like which may be led by ambassador hillman let's make sure we have

00:11:36.100 the right strategy in place that allows us to leverage the assets we can bring to the table in this

00:11:42.000 negotiation what are your thoughts on on the strategy because i think of the last time that

00:11:48.540 we had negotiations your thoughts louise on on strategy i think of last time the americans published

00:11:54.120 their full list of demands for negotiating kuzma and it was all about market access and ours was

00:12:00.460 gendered language and i thought okay we're we're at a disadvantage from the start here what should our

00:12:06.880 strategy be going into this i know you've already uh talked about large deal small deal but what

00:12:12.440 strategy does the team whoever it is take into this look that the number one thing that uh that we need

00:12:20.820 to do and and and i agree we have some of the best uh trade policy people in the world in fact when

00:12:29.620 brexit happened the uk came after some of our best minds you know because we have been negotiating trade

00:12:36.200 deals for decades i mean we really have a specialty and then the last you know last time um when nafta was

00:12:43.360 renegotiated the americans were a little bit on the back foot even though lighthizer was very knowledgeable the

00:12:49.660 president was not as focused on it and there was a lot of and and really we did well in that context this is

00:12:56.660 not that we are now facing a very well organized uh well taught through american position it's going

00:13:04.140 to be a much more difficult to uh to push back on on them they are not in and partially because they

00:13:13.100 are not in the mood we've not put them in a very good mood and we and i will say it doesn't matter who's

00:13:18.820 at the negotiation table uh the most important thing at this moment is the relationship between mark carney

00:13:26.120 and donald trump and at the end of the day that's the man who's going to make the decision is donald trump

00:13:31.820 and i think that that is our strategy has to begin with working on that relationship and we're coming late

00:13:37.820 to that so i mean in that context elbows up and running an election campaign on anti-americanism

00:13:47.880 doesn't necessarily work i mean trust me they they did notice that they watch our every move and so

00:13:55.160 does the president it's on it's unnerving he will cite canadian officials because they bring it to his

00:14:01.940 attention he's very well aware and we've been don't forget the other thing that we've done which i would

00:14:07.660 never have advised or any government in canada to do we went on the airwaves in the u.s on fox news

00:14:15.120 and all the others to criticize the president not just to it we tried to do it nicely but really at

00:14:22.920 the end of the day we're basically saying he doesn't know what he's doing canada is very important

00:14:27.540 to the united states this is destructive to the u.s you know he watched that he did not appreciate it

00:14:34.420 there was an article in the new york times where i think uh some things were said by diplomats that

00:14:40.500 shouldn't have been said and so it's hard to build trust to build and he said something when they saw

00:14:47.260 each other last week the donald trump to to to carney i don't remember the exact word but it was sort of

00:14:53.600 like don't try to be nice now you know it was sort of this connotation of it's not because you're

00:15:01.300 buddy buddy with me now that everything is forgotten i'm not saying he said that but

00:15:05.280 you build trust by respecting by understanding and i'm told when i'm in dc and this is not wrong

00:15:11.860 and we can we may dislike it but we're told know your leverage critical minerals all the things you've

00:15:20.640 said but also know your place like you just have got to understand uh how to play it and people say

00:15:26.640 why can't you do what the uk did i mean republicans are kind of saying please we want things to work

00:15:32.080 we want the relationship to be repaired i'm not saying that we need to to um uh genuflex uh totally

00:15:39.100 but at the same time you just have to understand some of the concerns and you have to give them

00:15:44.000 merit uh when we go around canada saying that the united states what they're doing is is illegal

00:15:49.480 and improper and and that doesn't raise that kind of background that's going to get us a deal

00:15:55.780 my view on treaties is always they're in effect until they're not and one side breaks them they're

00:16:01.380 no longer in effect so you know just yelling that the tariffs are illegal it doesn't catch anywhere it

00:16:06.460 might make you feel good uh but you know you you mentioned about carney and and and trump seeing each

00:16:13.820 other and i i raised the issue at both the carney going to the signing ceremony i think that was a

00:16:19.160 good move for him now it was a bit surprising considering that a little while earlier he had

00:16:24.100 been all about let's recognize a palestinian state unilaterally and i know some of my colleagues in the

00:16:30.580 media have said oh these two things aren't related and why would you conflate them well here's my view

00:16:35.880 um we're in the middle of trade negotiations with them donald trump's singular focus for the last while

00:16:42.680 has been on getting this peace deal in the middle east and then our prime minister goes and undermines

00:16:47.620 him it's going to annoy him and that doesn't that affect trade negotiations if you're annoying the

00:16:53.640 guy that you're sitting across from oh perfect segue into what i wanted to say and that is you're

00:16:59.060 absolutely right the relationship with donald trump is absolutely critical and having our prime minister

00:17:04.880 there at the signing ceremony i think was a good thing i don't think we should overstate the value of

00:17:10.600 that but every time we add another irritant to our bilateral relationship an irritant that

00:17:17.960 the president takes very personally uh let's start you know we've we've had already a history of this

00:17:26.240 the digital services tax the imposition of retaliatory tariffs on both of this issues on kuzma goods

00:17:36.080 we had to back down on both of those because they were irritants in our bilateral relationship

00:17:41.320 now we've taken a step we've departed from traditional foreign policy to recognize a

00:17:48.880 palestinian state now quite aside from the merits that shift in policy i would suggest the timing was

00:17:55.920 absolutely poor because you know that donald trump and the white house took notice of that

00:18:01.640 and we got another decision coming up ev tariffs are we going to trade off ev tariffs for access for

00:18:11.340 canola crops to china that is a decision mark carney is going to have to make very very soon and if we

00:18:19.080 depart from our aligned position with the united states on ev imports from china we're going to get killed

00:18:27.840 so being strategic and positioning ourselves uh vis-a-vis a president that can be unpredictable

00:18:37.180 that takes irritants very personally is so critical let's get this right and again it goes back to

00:18:45.520 what is our overarching strategy and then we deploy our team based on that strategy

00:18:53.020 okay we have to take a quick break but when i come back we have to start talking about irritants

00:18:59.900 on a bigger basis we'll start with canola but also the trade irritants that we have um too many

00:19:05.160 canadians think that we are pure as the driven snow and that's not the case back in moments this is

00:19:12.320 tristan hopper the host of canada did what where we unpack the biggest weirdest and wildest political

00:19:17.980 moments in canadian history you thought you knew and tell you what really happened stick around at

00:19:23.700 the end of the episode to hear a sample of one of our favorite episodes if you don't want to stick

00:19:28.640 around make sure you subscribe to canada did what everywhere you get podcasts so louise i want to pick up

00:19:34.460 with something ed was just saying and that's about the canola tariffs um i hear from um you know my

00:19:43.300 extended family my in-laws are canola farmers they are very annoyed at this i hear from my

00:19:48.440 friends in western canada about this your ev industry isn't real it doesn't exist uh we should

00:19:54.360 just get rid of them and i point out like look i understand but if we drop them do the americans hit

00:20:02.780 us back with something harder that's got to be a concern donald trump is not the biggest fan of

00:20:07.780 uh electric vehicles but he's really not a fan of china and their trade policy of dumping vehicles

00:20:14.520 at half the price into our market look as i've as i've said i mean on one on the one hand with the

00:20:20.220 luckiest country in the world because we are uh so far we you know the the effective tariff rate on

00:20:27.120 canada is three percent because of the usa mca compliant but on the other hand we're the most exposed

00:20:31.480 to whatever happens we're in between uh two big powers and we have been there before on security

00:20:37.580 and now we're there on trade we have a big decision to make um and i think i i what worries me in all

00:20:44.820 of this is we've got to be really cleared eye clear eye because the americans are not going to decouple

00:20:50.300 from china okay the americans are going to decide to trade with china on goods and services that are

00:20:56.360 not essential or that are not uh security uh that don't have a security component so they're going to

00:21:03.320 reduce on chips they're going to reduce on certain things and they've decided to make cars

00:21:07.240 something that for some reason is exist existential to to the american economy and industry so cars

00:21:14.000 are is very important but uh they're going to trade commodities that we trade with china

00:21:20.280 so we have to sit down at the table with the americans and say look we're being squeezed we cannot

00:21:26.320 afford to completely lose our can our canola industry you need to we need to make uh you're going to make a deal

00:21:34.960 with china you're going to be trading things with china don't you because what worries me is that 0.98

00:21:41.680 they will steal market share from us the americans they'll make a deal with china and they to sell the 0.75

00:21:47.240 same commodities we don't grow soybeans uh uh in a in a big way but there are things that they can

00:21:53.320 provide china that we provide china and so i think we need anything we do with china we have to do it 0.99

00:21:59.700 uh in alignment with the united states that does not mean it has to be complementary it doesn't have

00:22:05.100 to be identical uh could we did we have to go 100 on ev track did it had to be 100 tariff or could we

00:22:12.760 have looked at a at a middle ground like the eu did and that's a question mark but we were really

00:22:17.880 this was the period where we you know we were big on evs in canada we threw mexico under the bus at the 0.99

00:22:24.420 time so because what we kept hearing was that mexico was the back door for china into usmca and this is

00:22:32.020 this is one of the things that the americans are still thinking they don't want usmca to be the back

00:22:38.900 door for china into their market and so we have to have an open conversation with them and i don't 0.99

00:22:45.480 think we consulted them on the 100 on ev tariff i think we just did it because we just thought that

00:22:49.680 that's what they wanted us to do i think we need to be spending more time aligning not copying it

00:22:55.820 doesn't have to be identical what how we're going to handle china and i think that's going to take

00:23:00.360 patience and a lot of diplomacy my advice uh to the canola farmers of western canada is

00:23:06.560 yep we got to do something to help you out with china but also china is a bad trading partner 1.00

00:23:12.540 2013-14 they screwed us over on canola 2017 they screwed us over on canola 2020 they banned us for two

00:23:19.180 years it's a big market but they keep every time they have an irritant with us what do they hit hit

00:23:24.060 canola and pork so it's uh an unreliable partner at best and uh we'll see so let's talk about other

00:23:33.600 irritants though um dairy uh this is something that uh you dealt with with other countries the reason we

00:23:43.600 don't have a uh trade agreement with the united kingdom right now is because we refuse to give

00:23:49.240 them the same dairy access that they had under the european trade agreement uh you know people think

00:23:55.700 it's an all or nothing that we have to either completely protect or completely get rid of supply

00:24:00.980 management and i i'd argue ed that i've never heard an american say you've got to get rid of supply

00:24:05.880 management what are your thoughts on on dairy as an irritant and how we deal with that

00:24:11.160 well i have a few uh views on that um the dairy industry um has been very effective in canada

00:24:21.780 bringing its concerns and advocating for its interests in ottawa as you know there's a law now

00:24:30.620 on the books it was a private members bill which by far the majority of parliamentarians supported

00:24:37.020 which effectively says supply management will never again be tabled on a negotiating table

00:24:46.060 in our trade negotiations with the united states or any other country in the world

00:24:51.360 the reality though is donald trump and his negotiators won't care about that private piece of

00:24:59.640 legislation that's now on the books in canada they'll say you know what implementing legislation

00:25:05.820 can cure that it can deal with that issue we're going to negotiate assuming that you have the ability

00:25:12.680 to talk about this and i have suggested to the supply managed industries that

00:25:19.280 if they're not careful and strategic here they are facing a very challenging negotiation

00:25:29.540 as these trade negotiations move forward i believe this time donald trump is emboldened

00:25:37.340 he has the ear of the farm organizations in the united states that don't like supply management

00:25:44.100 and he wants major major changes in how we allow access for dairy for chicken for eggs

00:25:53.580 and i've encouraged our industries to be strategic here to reimagine what supply management might look like

00:26:04.380 as we enter these negotiations to make sure that they have a backup plan that might continue to sustain

00:26:12.780 a system of supply management but address some of the major concerns that the united states has

00:26:19.780 when it comes to access to our dairy chicken and egg markets well in the last kuzma negotiations the

00:26:26.780 americans thought they had negotiated a certain amount of access for industrial milk and cheese and then

00:26:32.400 we gave the quota to saputo and agripoor and armstrong and they're not importing any of it so they get

00:26:39.120 nothing and in that that was a major trade irritant for the biden administration and the trump

00:26:44.260 administration and that's the big big challenge we have over the years our supply managed sector

00:26:52.580 has manipulated the system that protects them and benefits them in a way that has irritated the united

00:27:01.700 states supremely um their milk pricing process their how they manage their quotas as you mentioned

00:27:09.620 um we have to be very very careful in how we approach these negotiations because there's an existential

00:27:19.140 threat that exists for those in industries i don't want to overstate it because with every threat there's

00:27:25.620 also an opportunity and my i believe the opportunity is for that industry and other industries in canada

00:27:31.860 to reimagine what life will be like after kuzma is renegotiated because my fear is that eventually

00:27:40.740 our prime minister and his government will be presented with with an all or nothing deal

00:27:46.020 where we are told you either have a free trade agreement with the united states and give up this this this and

00:27:52.900 this or you don't and it'll be that binary choice that will have to be made and that's where i'm

00:28:00.660 encouraging our industries be really strategic and visionary about where they this may land and adapt

00:28:08.180 accordingly make sure you have the ear of our negotiators so that they know what some of the

00:28:14.180 additional options might be that they can place on the table and that might actually be more attractive

00:28:21.380 to the american negotiators one of the things that i've been hearing louise from other industries is that

00:28:27.700 if supply management pushes us to having no agreement with the united states and renegotiated kuzma

00:28:34.740 that they will all lose it on the dairy industry and throw the dairy industry under the bus they're

00:28:38.980 they're willing to you know work to protect the the industry overall but not at the cost of them giving

00:28:46.100 up nothing and everyone else losing i come back to the to the premise of your question brian when you said that

00:28:52.260 you know finding a middle ground and you were saying that as well ed about finding a middle ground

00:28:59.140 with the united states does not mean dismantlement of supply management it doesn't doesn't from what

00:29:05.220 i'm told from the american side there there it's exactly what you said they thought they had agreed

00:29:12.740 we had agreed to something that in in its implementation we've actually did a bit of a run around with the

00:29:19.300 concentration of protein and it's it gets a bit technical and complicated but we we have not

00:29:26.660 fulfilled you could argue uh the the spirit of what we agreed to in uh usmc and i think and i go back to

00:29:36.260 what you said at the beginning when you opened up this part of the the the podcast in the segment when

00:29:41.220 you talked about we're not perfect we're not perfect and in this area we are being seen as protectionists

00:29:47.060 in dairy for good or for bad we have interprovincial trade barriers that not only hurt us internally

00:29:54.740 but also make it difficult for foreign companies to operate i know because i work with a lot of american

00:29:59.620 investors who tell us about and we make it really difficult from the regulatory perspective and now i'm

00:30:05.460 hearing we're hearing in the media canadians worried about americans investing in critical minerals

00:30:10.900 and somehow we're worried that you know they're going to be taking us over so we we we do we do uh

00:30:18.580 and of course we did the ev 100 on ev tax credit and we say that we're the free traders no no when it

00:30:25.540 suits us we use we use measures we use tariffs too so when others do it as or others react to what they

00:30:34.980 perceive as as lack of access to our market i think we need to listen to what they're saying and we need

00:30:41.940 to meet them somewhere halfway if we don't want to end up with exactly what you both have said which

00:30:48.500 basically take it or leave it kind of deal the recent visit by mark carney and minister leblanc they

00:30:55.700 went down and they were talking about they were there for a deal on steel aluminum and energy

00:31:02.660 and they floated the idea of keystone xl again which donald trump's already signed an executive

00:31:08.420 order to allow the cross-border portion to happen but i can tell you that in ontario the fact that auto

00:31:16.020 was not mentioned was duly noted and caused a panic do you think that they're kind of walking away from

00:31:24.340 the auto industry as you hear howard lutnik saying no you can have parts but we're going to take all the

00:31:28.500 assembly you hear about uh jeep uh deciding they're not going to move the uh this yes delantis

00:31:36.420 putting the compass jeep compass in illinois instead of in brampton ontario uh general motors

00:31:42.180 moving some production to the united states as well do you think that they're saying okay we don't have

00:31:47.620 cards to play here i think we do have cards to play but do you think that there may be saying well we can

00:31:52.980 get a deal on this and if we have to give up that so be it see that's the problem with sectoral

00:31:58.420 negotiation when we isolate our negotiations to each sector we don't have the cards to play to push

00:32:06.900 back on donald trump the reality is donald trump wants to suck canadian manufacturing back into the

00:32:14.260 united states i think everyone's acknowledged that he has said that very clearly that's his long-term goal

00:32:20.340 how do we push back well let's give the americans what they need to make a deal that brings

00:32:28.580 predictability and certainty back into our bilateral relationship but if we're doing it on a sectoral

00:32:35.460 basis uh we're going to get killed at the negotiating table do i believe that the carny government is

00:32:42.020 abandoning the auto industry absolutely not and we shouldn't and i believe doug ford is going to make

00:32:48.660 sure he doesn't do that but the reality is um we need cards to play and right now i don't see us

00:32:56.980 putting those cards on the table we've talked about critical minerals you know the the government has a

00:33:01.380 big decision to make it's coming up the anglotech merger tech resources is the largest critical minerals

00:33:09.860 miner miner in canada and we could lose that miner to this merger because the head office would end up in

00:33:19.700 london and uh who knows what happens to the jobs and the concern is that the production from tech resources

00:33:33.060 will eventually flow to the european union as opposed to the united states and don't kid yourself the trump

00:33:39.300 administration is keenly aware of that dynamic again talking about irritants let's not put another

00:33:47.460 irritant you know on the radar for the trump administration to go ballistic on let's make

00:33:53.540 sure we handle this in a way that preserves our bilateral relationship while at the same time

00:34:00.980 ensuring that canada remains open for business one of the irritants many irritants that i

00:34:07.540 had with the biden administration's inflation reduction act was they had a section in there

00:34:11.860 on critical minerals to have all the processing done in the united states it's like wait a minute

00:34:16.740 that's those are our critical minerals why why are you saying it's got to be done that way so look

00:34:21.860 we have irritants back and forth part of the reason i talk about our irritants is that most of

00:34:26.740 my colleagues in the media will only talk about what the united states has done we all know what the united

00:34:31.780 states has done sometimes we've got to look at at ourselves um we'll close with the last couple

00:34:36.900 minutes going back to something we talked about earlier strategy you're both smart people you've

00:34:42.820 both been involved in these sorts of things both advised governments and industry what's your advice

00:34:49.140 for the next two months or the next until the end of the year louise what's your advice for getting

00:34:54.740 us to the place we need to be where our economy is not constantly feeling like we're under threat

00:35:00.260 so um i can't go back i can't say what i wish we had done different no

00:35:09.380 no no i mean we have to deal with what we have now i think um i i totally agree the dangers of of

00:35:19.700 of giving of of of signing a deal for example on aluminum we know they have no choice right we have

00:35:26.900 a distinctive competitive advantage on aluminum they they recognize that there's no way they can

00:35:32.180 replace our aluminum they know that and it would take them years and even if they tried it would

00:35:36.980 be very difficult we have water we have energy we have everything you need to do aluminum so the

00:35:42.100 issue is if we if we get a deal on aluminum then what's the leverage on the other sectors that we don't

00:35:48.500 have as much of as much leverage right so i totally agree that the way you get across the finish line

00:35:54.180 is you have to deal with everything all at once you can't leave the tough you know what they say in

00:36:00.020 and in uh in negotiation that the easy stuff gets done first and then you've got the last stuff well

00:36:06.100 we we cannot do all the easy stuff and tuck them away and sign deals and then be only left with the

00:36:12.580 things we don't have leverage with so i think we need to i think we need at this point i think we could

00:36:17.300 have gotten the bigger deal earlier on i think now we've been put in a queue um and uh and they're

00:36:23.540 not as much in a rush but i think we need to go back we need to convince them that it's important

00:36:28.340 that they settle this they need some stability as well they've got the midterms next year and i think

00:36:32.980 we try to go and we deal with every single sectors and we get as good a deal as we possibly can get

00:36:38.420 and and and that's i i think it's the only choice we have

00:36:43.620 ed your thoughts what what would your advice be if um you know you were sitting down with

00:36:50.180 prime minister carney and his team uh later today i would remind him of the profound asymmetry in our

00:36:59.060 bilateral relationship we are the mouse sleeping next to the elephant when the elephant rolls over

00:37:06.100 we better be careful and i would suggest to him that we take note of the comments of ambassador pete

00:37:18.020 who signaled that the u.s had a desire to do a bigger deal of a grander bargain a grander bargain

00:37:25.300 allows us to bring into play all of the key assets that the united states has a key interest in

00:37:31.860 but has no guarantee on and we've talked about some of those we've talked about defense and

00:37:39.060 continental security and critical minerals we could talk about uh cross-boundary water management

00:37:44.980 which a lot of people don't talk about we do we could talk about food security and potash and

00:37:49.620 just there's a whole waterfront of issues and assets we can bring to the table if we broaden out our

00:37:56.500 negotiations into a grander bargain so i would say to prime minister carney look at the grand bargain

00:38:02.980 it is our one opportunity to really get this right and let's make sure that when we negotiate this

00:38:09.140 and complete negotiations we've baked into that agreement much tougher enforcement provisions so

00:38:16.500 that neither party can simply bail out on the whim of a prime minister or a president that there are

00:38:23.060 legislative bacons lock lock-ins that are in place that we have tougher enforcement process dispute

00:38:31.620 resolution that is timely it doesn't take years to resolve and i think if we open our minds to that

00:38:40.420 possibility we have an a real opportunity to get this right ed fast louise blaith thank you both very much

00:38:47.620 great conversation and uh thank you for letting me pull from your respective minds for what we need

00:38:53.060 to do full comment is a post media podcast my name is brian lily your host this episode was produced by

00:38:58.820 andre pru theme music by bryce hall kevin libban is the executive producer please hit subscribe

00:39:05.140 leave us a review and tell your friends about us thanks for listening until next time i'm brian lily

00:39:09.780 here's that clip from canada did what i promised you

00:39:20.100 two years later he was still opposition leader and he lost again to the pearson liberals

00:39:26.500 despite this dieffen baker doesn't resign as leader of the progressive conservatives which put the party

00:39:32.740 in an awkward situation that hasn't really happened before the typical rules of a canadian political

00:39:38.740 party were that you stayed leader until you died or resigned and if you lost twice in a row you were

00:39:44.260 supposed to do the honorable thing and step aside but dieffen baker just didn't prompting the party to

00:39:51.700 take the unprecedented step of forcing a party convention in toronto for the singular purpose of

00:39:57.540 crowbarring dieffen baker out of the leadership dieffen baker shows up pretends everything is fine

00:40:04.580 and gives a finger wagging speech chastising his fellow party members for their disloyalty

00:40:10.500 i followed this party when i didn't disagree when i didn't agree with policies i gave loyalty to

00:40:17.620 leader after leader

00:40:20.820 because i believe that there is no other way he's politely cheered by the assembled conservatives

00:40:27.460 and then abjectly humiliated in their subsequent leadership vote on the first ballot dieffen baker gets

00:40:33.300 a distant fifth place and even then he refuses to admit defeat

00:40:40.340 if you want to hear the rest of the story make sure you subscribe to canada did what

00:40:45.540 everywhere you get your podcasts

Full Comment - October 20, 2025

Why Carney is blowing trade talks with Trump

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