U.S. President Donald Trump’s top trade negotiator hinted Wednesday that the United States and Canada remain at odds on trade policy as the deadline for renewing the Canada-U.S.-Mexico Agreement draws closer, accusing Canada of “doubling down on globalization.”
U.S. Trade Representative Jamieson Greer raised other trade issues with Canada while testifying at the U.S. House Ways and Means Committee, including teasing a future “enforcement action” over provincial bans on U.S. alcohol.
Greer faced several questions during the hearing about how he was approaching the review of CUSMA, which requires all three countries to agree by July 1 on whether to renew, withdraw from or keep renegotiating the North American trade pact.
Greer said he was particularly focused on strengthening and broadening rules of origin that prevent third countries like China from importing subsidized goods into the North American market, where they can then cross borders tariff-free. He said Mexico has already agreed to do its part in improving those rules.
Asked if Canada has made similar commitments and is “playing by the rules,” Greer said “a little bit” in regards to steel but then pointed to Prime Minister Mark Carney’s efforts to diversify Canada’s trading relationships.
“Overall, they’ve indicated that they want to be trading more, they want to have more trade agreements with more countries,” Greer said.
“They’re doubling down on globalization when we’re trying to correct for the problems of globalization. So those are two models that don’t fit together very well.”
Greer added that “if the Canadians don’t want to have the rule of origin” on additional sectors beyond automobiles, “then we’ll have to have some other border control to make sure that we aren’t disadvantaged.”
Earlier Wednesday, Carney said “no” when asked by reporters if Canada was willing to make any additional concessions in trade talks.
“We understand what some of the – what the Americans would call trade irritants or trade issues – are. We have some on our side as well,” he said.
“It’s not a case of, the United States dictates the terms. (Once) we have a negotiation, we can come to a mutually successful outcome.”
Carney has stressed the importance of expanding trade with several other countries — including China — in order to reduce reliance on the U.S., which government figures say accounts for 75 per cent of Canada’s exports.
Other Trump administration officials, including U.S. Commerce Secretary Howard Lutnick, and experts like Michael Kovrig have criticized Carney for seeking closer ties with China in response to Trump’s tariffs and policy demands on Canada.
Lutnick said last week that Trump views CUSMA as “a bad deal” that needs to be “re-imagined.” He also criticized Canada’s position on trade as “the worst strategy every” and claimed “they suck” or leach off of the U.S. economy.
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Greer, who has previously suggested CUSMA could be replaced with separate bilateral trade deals with Canada and Mexico, has also said it’s “unlikely” an agreement will come by the July 1 deadline.
He said Wednesday that there are “load-bearing pillars” in CUSMA that are working well but added that a renegotiation is necessary in order to address U.S. concerns.
“I don’t think we want to rubber-stamp it,” he told the committee.
He also said there were opportunities to make the dispute mechanism within CUSMA more efficient, and suggested the Trump administration would make use of it.
“I think even more important than making sure the mechanism works is making sure we have the political will to actually enforce the agreement,” he said.
“Mexico and Canada have to understand that we will act if they don’t honour their commitments.”
Greer says U.S. alcohol bans may need ‘enforcement action’
Later in the hearing, Greer was asked about the provincial and territorial bans on U.S. alcohol that were enacted over a year ago in response to Trump’s tariffs, which Greer has identified as a trade irritant.
Alberta and Saskatchewan lifted their bans last summer, but the others remain in place, and Greer said it’s up to those provinces and territories to lift them.
“I think we’re kind of at the end of our rope in just asking for them to do this,” he said.
“Think about it this way: there are two countries that have retaliated economically against the United States in the past year, the People’s Republic of China and Canada. So that’s kind of the company that they’re running in. So my sense is there may have to be an enforcement action to deal with this issue on wine and spirits in Canada.”
He did not say what sort of action the U.S. may take.
Greer told the committee he had good relationships with his Canadian counterparts, who he did not specifically name, and has regular conversations with them about trade issues.
He mentioned ongoing frustration with Canada’s refusal to change its supply management system for the dairy industry or limits on fruit and vegetable imports from the U.S. — the latter of which he said he thought would be “an easy one for them to fix.”
Asked by Republican Rep. Claudia Tenney of New York what can be done to repair the Canada-U.S. relationship and bring Canada “back to the table,” Greer suggested it’s up to Canada to address Washington’s concerns.
“I have been pretty consistent over the past year that if we can get some changes in Canadian trade practices, it’s going to help me get over the political hump that we face here in the United States,” he said.
Neither Greer or Tenney acknowledged the tensions raised by Trump’s threats against Canada’s sovereignty and economy, or insults from other Trump administration officials.
During a separate hearing Wednesday at the U.S. Senate appropriations committee, Lutnick called Canadian bans on U.S. alcohol “insulting” and “disrespectful to America.”
“Absolutely,” Democratic Sen. Jeanne Shaheen of New Hampshire responded. “And they won’t do it because of the insults from this president and comments like yours.”
“We’re not going to get agreement (on trade issues) when we keep insulting people,” she added later. “When we have allies and partners, we should try and work with them, not insult them. And I find your rhetoric insulting.”
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