Canadian Prime Minister Justin Trudeau was to begin a two-day retreat with his Cabinet yesterday, focused mainly on the best approach to take with US President Donald Trump, whose vow to renegotiate the North American Free Trade Agreement (NAFTA) could damage Canada’s economy.
Trump on Sunday said he plans talks soon on the three-nation NAFTA, under which Canada and Mexico send the majority of their exports to the US.
Canadian officials — trying to persuade Trump’s administration that focusing on Canada makes no sense, given how closely the economies are linked — said his team is most concerned about large US deficits with China and Mexico.
“They haven’t said anything specific about any real problems that they have with us,” said David MacNaughton, Canada’s ambassador to the US and a key player on the NAFTA file.
The danger is that Canada could suffer collateral damage from US measures designed to cut the trade deficit with Mexico, he told reporters late on Sunday.
The two-day meeting in Calgary, in western Canada, is the first chance for the Cabinet to discuss US relations since Trump was sworn in.
As part of the Canadian bid to reach out to Trump’s team, Blackstone Group LP chief executive officer Stephen Schwarzman was invited to address the retreat yesterday.
Schwarzman chairs a panel of business leaders who give Trump advice.
The challenge of dealing with Washington comes at a sensitive time for Trudeau, who is facing separate probes into a luxury vacation he took with the Aga Khan as well as his centrist Liberal Party’s fund raising activities.
He is also under fire from Kevin O’Leary, a brash TV personality running for the leadership of the opposition right-leaning Conservative Party, who said Trudeau is too weak to stand up to Trump.
O’Leary said that Trudeau, who came to power late in 2015 promising to run a few years of modest budget deficits on infrastructure projects, has ramped up spending so much that Canadian Ministry of Finance officials predict there will be shortfalls for decades to come.
While polls show the Liberals ahead of their rivals in the run-up to the 2019 election, pollster Nik Nanos of Nanos Research said O’Leary could eat away at Liberal support.
“Canadians were okay with a modest deficit for a specific purpose, but I think there’s a difference between that and a perpetual deficit,” Nanos said.
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