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Minister Offers at Island Summit a Behind-the-Scenes Look at USMCA Negotiations

Navdeep Bains talks foreign trade at economic summit in Nanaimo

American politicians and negotiators were surprised by Canada’s resilience and unity during North American Free Trade Agreement renegotiations, according to a federal cabinet minister.

During a discussion about foreign trade at the Vancouver Island Economic Alliance’s Economic Summit on Thursday, Navdeep Bains, the minister of innovation, science and economic development, said the United States administration felt it could divide Canadians, but ultimately failed to do so.

“The Americans were stunned because the divide-and-conquer game didn’t work. They couldn’t pit a sector against one another, they couldn’t pit a region against one another or a politician against one another,” he said. “We were all united and I think that really strengthened our negotiations and ultimately allowed us to get a good deal.”

Bains, who touched on a range of topics including the Island’s recent designation as foreign trade zone, described the NAFTA/USMCA negotiations as an intense “emotional” rollercoaster ride. He said the federal government’s position was to ensure free trade with the United States continued and that Chapter 19 – a dispute mechanism giving Canada, United States and Mexico the right to challenge anti-dumping duties in front of panel of members from all three countries – remained.

“We need to have a dispute settlement mechanism in place. We need to make sure that there are rules that are being followed … that was something that we remained firm on. That was a red line issue for us,” Bains said, adding that the Americans did everything they could to remove Chapter 19.

There were also a lot of behind the scenes “players” who helped influence President Donald Trump and the U.S. administration, according to Bains. He said Canadian negotiators had a “team Canada” mentality and put on a “charm offensive” with U.S. governors, congress, mayors and the business community.

“There was no relationship that we did not engage with,” Bains said.

Bains told the crowd he personally spoke with Matt Bevin, the governor of Kentucky, about the importance of maintaining free trade with Canada. He said Bevin is very close to Trump, but knew that Canadian tariffs on American aluminum and steel would hurt his state, which produces the No. 1-selling pickup truck in Canada.

“[Bevin] understood how important that was,” Bains said. “So, he proactively worked with us and other like-minded individuals who were close to the administration.”

Speaking to the News Bulletin afterwards, Bains said Canada’s relationship with the United States will outlast any president because it is extremely deep. He said the negative comments about Canada from the United States during renegotiations weren’t easy to hear, but that Canadians remained unified throughout the process.

“That strong united team Canada front allowed us to get a good deal,” he said.

Although the federal government already recognized the need to diversify trading partners, Bains said the NAFTA/USMCA renegotiation efforts reinforced that. He said Canada has nearly finalized a free trade agreement with Europe, is close to signing off on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and wants to deepen its trading relationships with China, India as well as countries in Southeast Asia, South America and Africa.

“There are so many other countries where there is enormous economic opportunities for us to trade. Our view is that we are a trading nation and we need to continue to look at other markets,” he said. “The U.S. is by far our No. 1 market and it is so critical, but I think it is not only the government, but Canadians now realize how important trade diversification really is.”

Vancouver Island’s recent designation as a foreign trade zone is hugely important and will really help small- to medium-sized businesses by creating a “strong brand” for Island products and services, according to Bains. He said in addition to the FTZ designation, the federal government is aware of the labour shortage on Vancouver Island and that it remains committed to investing in education and job training to help address that issue.

“We believe that if we invest in people … that they will get better jobs, quality jobs, higher-paying jobs and that they will be able to succeed in this new digital economy,” he said.

Bains said continued immigration is also needed throughout Canada in order to help address the ongoing labour shortage. He said anti-immigrant rhetoric is growing nationwide and that some politicians are attempting to create division in Canada, which he believes is wrong.

“Promoting division, promoting anti-immigrant sentiment is a great way to maybe win [politically], but it is a horrible way to govern and to build a country,” he said.

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