Canada needs to shift its focus to saving the CUSMA

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“Canada has to find a way to save the furniture, and the furniture is the CUSMA or the USMCA, and not just save it for now, but save it for the next four years,” Mark Warner, principal council at MAAW Lau, said in a recent interview with the Financial Post’s Larysa Harapyn.

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Warner said the trade agreement is an important piece of “architecture” that needs to be saved for when there’s a new U.S. president to negotiate with. He added that Canada’s current combative position in the trade war with U.S. President Donald Trump is not the best approach.

“If we match Trump, blow by blow, we run the risk of blowing the whole thing up and having to start back where we were in 1987 with a new free trade agreement. I’m not sure that’s smart,” he said. “The first step is to preserve the architecture that we have with them even if it’s under assault from Donald Trump.”

Instead, Canada needs to figure out a way to get Trump to enter a renegotiated CUSMA, even if that means offering up different and/or more concessions. That includes things like dairy, softwood lumber and the digital sales tax, Warner said.

“One thing is clear: that Trump really is tariff man … and he is prepared to use the threat of tariffs to achieve both economic and geopolitical ends,” he said. “If you resist too much, he will react in an even stronger fashion.”

Warner added that Canada can no longer get away with “riding multiple trade horses” with different countries.

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“We want to be cool with the kids in Britain and France. Unfortunately, we share a continent with the United States and they’re not really cool with the kids,” he said. “If we want to have that preferred relationship with the United States, we’re probably going to have to pick a lane.”

Warner said Canada and Mexico should instead try to negotiate for a customs union with the U.S. that is similar to the European Union.

“That’s … as opposed to sort of saying, ‘We’re going to match you blow by blow and just help you destroy the agreement that you say you never really liked’,” he said.

• Email: novid@postmedia.com

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