LILLEY: Canada must use leverage now in CUSMA trade negotiations
· Toronto Sun
Prime Minister Mark Carney says he’s not taking notes or instructions from the Americans on restarting trade talks and he’s willing to wait things out if need be.
Ontario Premier Doug Ford says he’s determined not to put American booze back on the shelves at the province’s LCBO stores – the largest purchaser of beverage alcohol in the world – until American tariffs are lifted.
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It’s good to see political leaders show backbone and resolve as both Carney and Ford are doing here.
That said, sometimes, it can pay to lean in and find a compromise to achieve your end goal.
Ontario’s booze ban has clearly struck a nerve with the Americans, and it was smart retaliation when the tariffs hit. The booze ban in Ontario and in every province except Alberta and Saskatchewan has become the number one irritant for the Americans – it’s hurting their producers, especially Kentucky bourbon makers and California’s wineries, and it’s sent a message.
Time to decide whether to send a messages or get results
Now we need to decide whether we want to just send a message or get results for our workers and businesses.
Auto workers in Oshawa, Oakville, Windsor and in parts plants along the 401, steelworkers in Hamilton, Edmonton, Regina and Sault Ste. Marie, are all concerned about their future. Business owners big and small are dealing with uncertainty and that means so are their workers.
Carney is right to reject “entry fees” and as he said the Americans haven’t asked for one, but they do want movement on some files and the easy ones to deal with would be American booze on provincial shelves and living up to the terms we agreed to on American dairy quotas in the last round of CUSMA.
Canada could face more tariffs over booze ban
On Wednesday, U.S. Trade Representative Jamieson Greer was asked about the ban of American booze across much of Canada. Greer said that he’s been asking Canadian officials about this issue for some time and is at the end of his rope.
“My sense is there may have to be an enforcement action to deal with this issue on wine and spirits in Canada,” Greer said.
According to University of Toronto economics professor Joseph Steinberg, that enforcement action is likely to come in the form of more tariffs on Canadian goods. In mid-March, after the Supreme Court struck down Trump’s IEEPA tariffs, Greer launched Section 301 investigations under the Trade Act of 1974 into the practices of 60 different countries, including Canada.
If the Americans find any practices that they deem unfair to their market, the law allows the president to impose tariffs or other measures. Steinberg believes the Americans will declare the booze ban and the blocking of American dairy quota usage to be unfair practices, meaning Canada will face additional tariffs.
“In my view, neither of these practices confer any benefit to the Canadian economy – I think they are actually harmful. Abandoning them would make it much harder for the U.S. to use Section 301 tariffs as a cudgel to extract even greater concessions during the upcoming USMCA review, and would benefit Canadian consumers to boot,” Steinberg said.
Team Canada should drive the agenda like a confident country
Instead of escalating the situation, why not get to the table with the Americans, put everything on the table from Trump’s tariffs to our booze ban, their issues with the negotiated dairy quota and our issues with their Buy American provisions. In addition to the direct trade issues, we could add in talks about energy security for America using Canadian oil, electricity and renewables along with Canada’s increased defence spending and commitment to Arctic security.
That’s the kind of deal Carney promised to seek in the last election and it’s the kind he should seek now to secure Canadian jobs and bring about certainty for Canadian businesses.
Canada has what the world wants, Canada has what the United States wants, let’s stop reacting and start driving the negotiation the way a confident country should.