By Canadian Press

U.S. no longer needs ‘improper’ metal tariffs as negotiating tactic: Freeland

Apr 6, 2019 | 7:41 AM

OTTAWA — Roadblocks to ratifying the new North American trade pact are being raised on both sides of the American political divide, as unresolved trade issues overshadowed Foreign Affairs Minister Chrystia Freeland’s trip to a NATO summit in Washington.

Whether it was the Trump administration’s “improper” imposition of metals tariffs as leverage in the contentious renegotiation of the North American Free Trade Agreement or the “Pandora’s Box” Democrats would open by seeking to change the agreement, Freeland made clear the final hurdles for the continent’s new trade pact remain formidable.

Freeland took that message to Washington on Thursday, where the continued existence of U.S. steel and aluminum duties dominated discussion ahead of the NATO summit she was attending, casting further uncertainty over the fate of the new trade deal signed by Canada, the U.S. and Mexico last fall but not yet ratified in their legislatures.

Freeland said the tariffs were improperly applied in the first place last spring by the Americans as leverage in the protracted NAFTA talks. And they’re no longer required because the continent’s three countries now have a deal.

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They make ratifying the new North American trade pact unpalatable for many Canadians, she said.

President Donald Trump unleashed a provision of U.S. trade law, known as Section 232, that allows the president to impose tariffs on national-security grounds.

At the time, Commerce Secretary Wilbur Ross said the Trump administration was suspending a 232 exemption for Canada and Mexico, imposing a 25-per-cent duty on steel and 10 per cent on aluminum, because the NAFTA talks were talking too long.

“As to Canada, Mexico, you will recall that the reason for the deferral had been pending the outcome of the NAFTA talks,” Ross said. “Those talks are taking longer than we had hoped.”

Freeland argued that’s now a moot point because all three countries have finished negotiating.

“Now, 232 was never meant to be a tool to be used as any kind of leverage. That would be a very improper use of it,” Freeland said Thursday, adding the Americans “were quite explicit that that was the intention” when the tariffs were imposed.

“How can that be relevant today when it comes to Canada? The deal is done. No more leverage is needed,” Freeland said. “So both on the national-security grounds and when it comes to the notion that there could be some sort of negotiating purpose served by 232, we really think this is groundless.”

Freeland and the Trudeau government have branded the tariffs illegal and absurd.

The minister made the remarks at the U.S. State Department, where she was attending a meeting of ministers in the NATO transatlantic military alliance.

“Standing here in the U.S. State Department, a few minutes before the NATO meeting celebrating the 70th anniversary of this great alliance, I think underscores the absurdity of those 232 steel and aluminium tariffs,” Freeland said. “For Canadians, that absurdity is cast in even starker relief by the fact that we now have a trade agreement.”

Freeland pressed U.S. Secretary of State Mike Pompeo to lift the tariffs during their meeting Wednesday night in Washington.

“During the meeting, the minister made it clear that the application of Section 232 on imports of Canadian steel and aluminum is unjustified and urged the United States to drop these tariffs,” her office said in a statement.

Pompeo’s office decided the tariff talk wasn’t worth noting. A State Department readout of their conversation detailed a long list of pressing international-security concerns, from NATO burden sharing to the Canadians imprisoned in China, the Venezuelan crisis, and tensions with Iran and North Korea. But there was no mention of tariffs.

On the Democratic side, House Speaker Nancy Pelosi said earlier this week her party won’t approve the new agreement unless Mexico passes a law protecting workers’ rights. She told the U.S. news outlet Politico “no enforcement, no treaty” if there is no mechanism that binds Mexico to elevate its labour standards.

Freeland said Canada agrees firmly with the Democrats on the need for that, but she flatly rejected the broad hints dropped by Pelosi and many in her party that the agreement might have to be re-opened to address their concerns.

“We’ve done our deal,” Freeland said. “Compromises were made on all sides, and we believe that people need to be very careful around opening up what could really be a Pandora’s Box.”

Mike Blanchfield, The Canadian Press