Canada's trade insiders say they are preparing for the worst when it comes to the fate of NAFTA, with one top adviser saying it鈥檚 only a matter of time before U.S. President Donald Trump pulls out of the North American Free Trade Agreement.
鈥淭he consensus felt like it鈥檚 not if, it鈥檚 when he鈥檚 going to pull the plug,鈥� Rona Ambrose, the former Conservative interim leader and member of Canada鈥檚 NAFTA advisory council, told CTV's Question Period.
Ambrose鈥檚 comments come as the latest round of talks between Canada, Mexico and the United States get underway in Montreal on Sunday. The talks are set to wrap up on Jan. 29.
鈥淚 really believe Canada is doing everything that we can do,鈥� Ambrose added. 鈥淚 think we just need to ramp up all those measures even more in the next week or so,鈥� she said.
Foreign Affairs Minister Chrystia Freeland, who is Canada鈥檚 lead on the file, told Question Period host Evan Solomon that Canada is 鈥渁bsolutely鈥� preparing for a Plan B.
鈥淲hen it comes to what the U.S. may or may not do, our approach is to hope for the best and prepare for the worst,鈥� she said.
鈥淎nd it is no secret -- in fact, it is absolutely a matter of public record, that the U.S., including the president, has said quite clearly that they have thought about invoking Article 2205, which would set the clock ticking on the six-month withdrawal notice. And I think that it is only sensible and prudent for us to take the president at his word. So we are absolutely prepared for every eventuality.鈥�
But Freeland remains hopeful NAFTA will survive.
鈥淲e also approach these negotiations ... with a spirit of good will and positive intent and we鈥檙e going to be working hard to get to a positive result,鈥� she said.
Canada鈥檚 backup plan?
Last week, Canada鈥檚 International Trade Minister Francois-Philippe Champagne said that there was no clear 鈥減lan B鈥� if the trilateral deal gets torn up.
Frank McKenna, the former premier of New Brunswick and a top Liberal, now says that he sees an 鈥渆mbryonic plan B taking place now.鈥�
McKenna said that includes diversifying markets through continued pursuit of an 11-country Trans-Pacific Partnership, a trade mission to India, 鈥渙vertures with China,鈥� as well as 鈥渟omething like accelerated depreciation for business investment.鈥�
鈥淏ut it鈥檚 really difficult to put a concrete plan B out there when your primary mission is to achieve plan A,鈥� McKenna said.
Progressive chapter problem?
Freeland is denying reports that Canada鈥檚 insistence on so-called 鈥減rogressive鈥� chapters -- on labour standards, gender equality, the environment and Indigenous rights -- has been a sticking point for the U.S.
鈥淚鈥檓 really proud that, in Montreal, for the first time ... we鈥檙e going to have a table devoted to discussing the Indigenous chapter,鈥� Freeland said.
鈥淗aving said that, these progressive elements have in no way been the sticking point in these negotiations,鈥� she added.
Freeland said 鈥渢he key sticking points鈥� are 鈥渦nconventional U.S. proposals: things like Chapter 19, the sunset clause, rules of origin.鈥�
Chapter 19 is the agreement鈥檚 dispute resolution mechanism. Rules of origin refer to provisions on how much foreign content, such as autoparts, can be included in a product without tariffs.
Assembly of First Nations National Chief Perry Bellegarde told Question Period that NAFTA must to be updated to reflect the changing legal landscape around First Nations rights, and it would benefit the U.S. to recognize that.
鈥淭hey鈥檙e going to lose out if NAFTA is dead as well,鈥� he said. 鈥淭his is good for the economy on both sides.鈥�
Meanwhile Jean Charest, former premier of Quebec, said that he understands what the government is trying to do with the progressive chapters, but called for a 鈥渞ethink.鈥�
鈥淭he point they鈥檙e trying to make is that trade is about prosperity and prosperity isn鈥檛 just about numbers,鈥� he said. 鈥淚t鈥檚 about social justice. It鈥檚 about the environment. It鈥檚 about gender equality. It鈥檚 about a broader set of issues.鈥�
鈥淚s this the best way to do it?鈥� he added. 鈥淏y putting them or advancing them on the table of these trade agreements? I鈥檓 not sure.鈥�
Ambrose, meanwhile, said she doesn鈥檛 believe the progressive chapters are actually a sticking point, but rather something the Americans will point to in order to paint Canada as uncooperative.
鈥淭hey鈥檙e positioning themselves so they鈥檒l be able to pull out,鈥� Ambrose said. 鈥淭hat鈥檚 where I think this is going.鈥�
