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During a meeting held on Monday January 23rd in Calgary, Prime Minister Trudeau in town for a cabinet retreat, met with Stephen Schwarzman, chair of President Trump’s Strategic and Policy Forum. M. Schwarzman is also the chief executive of the U.S. investment firm Blackstone Group and was appointed to head Trump’s forum last December.
The most recent move by President Trump to renegotiate the North American Free Trade Agreement (NAFTA), has the Trudeau government scratching its head on how it will map out its new approach with the U.S. in light of Trump’s clear protectionist agenda.
Schwarzman’s presence in Calgary may have been one to reassure the Prime Minister, as the banker mentioned that Canada was not in the president’s crosshairs when it comes to its trading relationship. “There may be some modifications, but basically, things should go well for Canada…it’s a model for how trade relations should be; it’s a positive sum game. Canada is well-positioned.”
Rumors of Jared Kushner, Trump’s son-in-law / adviser fell through Monday afternoon. Sources had mentioned to the CBC that Kushner was possibly en route to Calgary to speak with cabinet members about NAFTA and other topics of predilection of his father-in-law.
One thing is for sure, as confirmed by newly minted White House press secretary, Sean Spicer, the President will be meeting with both Prime Minister Trudeau and Mexican President Enrique Pena Nieto, sometime within the next 30 days – possibly when the crowd size scandal calms down – in order to discuss the terms of the renewed trilateral trade agreement. Spicer did press that if President Trump didn’t get his way, he’d stump right out and withdraw the United States from NAFTA.
The agreement was implemented in 1994 and touches a variety of provisions such as intellectual property, the environment, agriculture and transportation infrastructure. It also affects a total population of 478,400,000 people and has an estimated nominal GDP of $20.731 trillion (2015).
One of the issues being thought to be brought to the table is a potential border tax according to Schwarzman. The banker acknowledged that U.S. politicians have considered applying tariffs to Canadian energy imports. Although Canada’s natural resources minister said he has heard nothing about the idea, it is one that has been floating around Washington D.C. mainly by Republican House Speaker Paul Ryan as part of his strategy to overhaul the U.S. tax regime.
Such a tax would make Canadian gas and oil more expensive for U.S. refineries to buy. A scenario like that is of course cause for worry in Alberta’s oil patch, which has already taken serious hits in the past years. An energy tax from the U.S. could lead to an exodus of investment dollars that would remain south of the Canadian border rather than make its way up into Alberta.
David MacNaughton, Canada’s ambassador to the United States, who is also in Calgary to brief cabinet members, spoke with reporters about the talks he has already held with the Trump transition team, mentioning they have been positive. It seems like the President is mainly aiming at countries that have a trade deficit with the U.S. in his protectionist crusade.
Looking forward, Mexico’s President Nieto agreed during a call with Prime Minister Trudeau last Sunday, to join forces in order to encourage economic integration in North America. Trump has advised he would be meeting with Trudeau and Nieto separately on NAFTA and border issues. No date has been confirmed in regards to a possible Trump visit to Canada.