Canada-U.S. trade growing stronger despite differences, officials say at rare meeting

In the grand scheme of a volatile and unpredictable world, the Canada-U.S. trade relationship is healthy and only growing stronger, its two senior curators insisted Thursday during a rare joint appearance in Ottawa.

U.S. Trade Representative Katherine Tai was in the national capital for a two-day visit, her first to Canada since President Joe Biden appointed her as his principal international trade emissary last March.

Appearing alongside Trade Minister Mary Ng, Tai acknowledged the various and long-standing irritants that exist between the two countries, but said they pale in comparison to the global challenges looming over the continent.

“If you zoom out, and you look at the fact that the United States and Canada exist in the larger world, then you start to see the real strength and durability of this relationship,” Tai said.

She cited their united front in helping Ukraine in its war with Russia and the U.S.-Canada-Mexico Agreement as “foundational pillars” of their collective effort to work together for each other’s mutual benefit.

“In the context of North America, it is very clear that the success of your economy, your workers, means success for our economy and our workers, and vice versa,” Tai said.

“Policies that erode your industries are the same policies that erode our industries.”

Tai also mentioned the specific issue of solar panels — a dispute resolution panel ruled in February that Trump-era tariffs on Canadian-made solar products were a violation of the USMCA, known in Canada as CUSMA.

The Biden administration has been maintaining the previous president’s tariffs on imports of certain solar components, albeit at lower levels, in an effort to help U.S. manufacturers catch up to competitors like China.

The panel’s final report found that by keeping Canadian exports — a relatively tiny segment of the total — subject to its so-called “safeguard measures,” the U.S. was in violation of its obligations under the deal.

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“That is another example where if you zoom in close, you see that as a dispute between the two of us,” Tai said.

“Zoom out, and you realize that we are in this together in terms of competing within a world where we’ve got competitors that are really fierce and we need to work together to meet those challenges.”

She turned taciturn on the subject of Buy American and Buy America, a longtime protectionist doctrine in the U.S. that Biden has embraced enthusiastically when it comes to financing federal infrastructure projects.

Business leaders in Canada fear the chilling effect that Biden’s protectionist rhetoric is having on the ability of contractors and suppliers north of the border to win contracts in the U.S., both in the private sector as well as at lower levels of government.

“Let’s just be very, very clear: those are federal procurement policies, and Canada has federal procurement policies as well,” Tai said.

“I wouldn’t characterize that championship by President Biden as a barrier that the administration is throwing into the U.S.-Canadian trade relationship.”

Dennis Darby, chief executive of Canadian Manufacturers and Exporters, happened to be testifying Thursday before the House of Commons transport committee on the subject of supply chain vulnerabilities.

“We know our government and our diplomatic corps are hard at work mitigating the protectionist tendencies of the current administration in the U.S., (but) we have to keep up the pressure,” Darby told the committee.

“We need to approach this as Buy North America, not Buy America — it’s one way for us to continue to be part of their supply chain, and to shorten their supply chain.”

Ng said she’s looking forward to showing her counterpart a GM facility Friday in Markham, Ont., where they expect to see integrated Canada-U.S. supply chains in action.

With the industry shifting rapidly and dramatically towards electric vehicles, the Canada and U.S. auto sectors are about to become even more closely intertwined, she predicted.

“We’ve been building autos for over 100 years — and for the last 50 years, very deliberately so, through deliberate policies that have integrated our auto supply chains, and the future is electric,” Ng said.

“We are going to invest in, of course, critical minerals, which is the beginning of that value chain, but from critical minerals to electric batteries that will go into those electric vehicles, we’re going to be working with the United States on this.”

The pair were scheduled to meet with union leaders later Thursday, as well as the owners of small and medium-sized businesses Friday in Toronto.