President Donald Trump reiterated his threat to withdraw the USA from NAFTA while saying that gains from a new deal could be used to pay for a wall at the Mexican border.
The economic fallout from trade disputes is top of mind for ministers holding a two-day winter retreat in London, Ont., after Canadian stocks and the dollar fell Wednesday on reports the U.S.is increasingly likely to withdraw from NAFTA.
The Liberal cabinet is portraying Canada's decision to launch a sweeping challenge of US trade practices as a show of strength, even as it prepares Canadians for the possibility that the government may lose its battle to keep NAFTA talks alive.
She said the government takes the U.S.at its word, and is treating the threat seriously.
Foreign Affairs Minister Chrystia Freeland said Thursday that Canada is hoping for the best when NAFTA talks resume later this month in Montreal, but is also preparing for the worst. "So Canada is prepared for every eventuality and that is a whole-of-government preparation", she said.
U.S., Canadian and Mexican officials meet this month for the sixth and penultimate round of talks to update NAFTA, which President Donald Trump has threatened to abandon unless major changes are made.
"When it comes to the more unconventional USA proposals, we have been doing some creative thinking, we've been talking with Canadian stakeholders and we have some new ideas that we look forward to talking with our USA and Mexican counterparts about in Montreal". Trump told the Journal that he was leaving the negotiations "a little bit flexible" for the time being, because of Mexico's upcoming presidential election.
The talks start on January 23, just weeks after Canada launched a wide-ranging complaint against the United States at the World Trade Organization, potentially complicating NAFTA negotiations.
"Our American colleagues. understand when you stand strong", Trade Minister Francois-Philippe Champagne told reporters.
Freeland said the WTO filing is about the "unfair and unjustified" tariffs imposed, and is "on a quite separate track from the NAFTA negotiations". "You get respect. When people see that you're firm, you get respect".
As Canada prepares for a possible USA pullout from NAFTA, it will continue an aggressive outreach plan that includes meetings with state governors and lawmakers in Washington.
"We have some new ideas", she added.