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Questions swirl about the effects of the Trudeau-Trump joint declaration

Questions abound after Trudeau-Trump meeting

OTTAWA — Even with companies and politicians breathing a little easier after Justin Trudeau’s first encounter with U.S. President Donald Trump, it remains to be seen what the two governments actually agreed to.

A day after the Trudeau-Trump tete-a-tete, questions on critical files remained unanswered — from trade, to infrastructure, to taxes, to pipelines.

Trudeau cabinet ministers acknowledged Tuesday that the Trump-related economic uncertainty had yet to dissipate.

On energy, Natural Resources Minister Jim Carr said there’s still a lot of unfinished work when it comes to reminding Americans that the two economies are highly integrated.

“I’ve been spending an awful lot of time on the telephone talking to people who are very close to those in a position of influence in the United States to make that argument,” Carr told reporters in Ottawa after a cabinet meeting.

“We’re doing two things: we’re making arguments and we’re making friends — and then our friends will help us make the argument.”

Canada’s crucial oil and gas industry has concerns about a possible border-adjustment tax as well as Trump’s pledge to boost U.S. energy production — even as carbon pricing in Canada is poised to become more expensive. On the other hand, the president did sign an executive order advancing the controversial Keystone XL pipeline, which would benefit the Alberta oilpatch.

In many ways, the joint statement released after the Trudeau-Trump meeting raised even more questions than it answered.

— The document declared the governments would “encourage opportunities for companies in both countries” to create jobs through infrastructure investments, but it did not offer explicit comfort that Canada would be exempt from any Buy America provisions.

— It mentioned the two sides would work together on labour mobility in various economic sectors. However, it didn’t say how it would make that happen or whether it would come through the upcoming renegotiation of the North American Free Trade Agreement.

— The statement said the two sides would continue talks on regulatory issues to make them more business friendly and to cut costs without compromising health, safety, and environmental standards. It did not provide details on how it would get there.

The joint declarations that follow meetings between U.S. presidents and Canadian prime ministers rarely include specifics and this one was no different.

However, the many unknowns surrounding Trump, and the potential for spillover into Canada, has created an intense thirst for detail. 

Companies say they need to have confidence in the fine print before they can make big decisions in areas like investment.

On trade, business leaders said they felt some relief after Trump told reporters Monday that NAFTA would only be tweaked, rather than torn up, as he had promised on the campaign trail.

But they remained unsure what a Trump tweak might look like.

Parts of Corporate Canada has been bracing for the worst since Trump’s unexpected election victory in November. The combination of his unpredictability and his protectionist vows has raised concerns across many sectors.

In particular, businesses are watching closely to see whether the U.S. will follow through on a proposed border-adjustment tax, which has many firms deeply concerned.

A new study released Tuesday warned that the border plan would inflict considerable damage on both economies.

The analysis by the C.D. Howe Institute think-tank said the plan would reduce bilateral trade in both directions and estimated it would shave nearly a full percentage point from Canada’s economic growth.

They predicted it would also cut nearly 1.3 percentage points from U.S. economic growth.

On Monday in Washington, Trudeau also met top House lawmaker Paul Ryan, who has promoted the border-tax measure.

It’s unclear, however, whether Trudeau was able to get some reassurance from Ryan on the future of the proposal.

When asked whether Trudeau learned more about the border-tax proposal, a spokeswoman in his office pointed to a brief statement that only said the prime minister discussed trade during his meeting with Ryan.

Foreign Affairs Minister Chrystia Freeland said Tuesday that the meetings in Washington confirmed her expectations the fate of the border-tax plan was uncertain.

“This is very much in the early stages and there is a very broad diversity of opinion in the United States around that,” Freeland told reporters in Ottawa. 

“It’s not appropriate for us to have a position on that until we see where the U.S. lands.”

She noted that the border-tax measure is part of a broader tax-reform plan.

Freeland also said talks surrounding NAFTA’s renegotiation had yet to begin because appointees for the new U.S. secretary of commerce and trade representative positions had to be confirmed.

“Therefore, it’s not possible for us to start the negotiations at a technical level,” she said. “Yesterday’s conversation with the president was very productive. It’s a good start.”

On infrastructure, federal officials believe the inclusion of the Gordie Howe international bridge in the joint statement was another sign the relationship was off to an encouraging start.

The officials believe that, at the very least, the bridge’s mention was an indicator Trump’s team won’t create any obstacles to its construction.

The previous Conservative government ran into many political roadblocks as they sought its approval. Canada eventually had to agree to take on the financial risk from the bridge project.

Once built, the bridge between Windsor, Ont., and Detroit will relieve congestion at the busiest border crossing in the country.

On Tuesday, Infrastructure Minister Amarjeet Sohi sidestepped a question on whether Canadian firms would be exempt from any Buy America policies attached to U.S. investments.

“Both the United States and our country have a great emphasis on building infrastructure to grow our economy and create opportunities for workers on both sides of the border,” he said.

— with files from Jordan Press, Joanna Smith and Jim Bronskill

Andy Blatchford, The Canadian Press

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