Canada’s envoy to the U.S. emphasized the necessity of reintroducing American alcohol in Canadian markets as a crucial step towards finalizing a deal with the U.S. to avert potential new tariffs, according to insights obtained by CBC News during a video call on Thursday. Mark Wiseman relayed this message while delivering a comprehensive briefing on the prospective trade agreement to approximately 100 members of the Canada-U.S. trade council, comprising various businesses, industry associations, and labor unions.
The ongoing negotiations involve Canadian officials working diligently at the Canadian Embassy in Washington to iron out the details of the potential agreement. Wiseman indicated that the team aimed to complete this work within 24 to 48 hours during the call on Thursday morning. The proposed deal includes provisions to reduce tariffs on steel, aluminum, and automobiles, as well as modifications to the allocation of dairy import licenses by the government, a move that could result in increased American dairy products on Canadian retail shelves.
Following Wiseman’s briefing, Steve Verheul, a former Canadian chief trade negotiator, cautioned the council about potential pitfalls associated with the deal. Verheul, who played a pivotal role in negotiating the Canada-U.S.-Mexico Agreement and previous NAFTA talks, raised concerns about the implications of accepting sectoral tariffs and making concessions in the agreement.
Verheul highlighted the risk of relinquishing leverage before the CUSMA review process and warned about potential future demands from the U.S. He emphasized that the American industry largely supports duty-free trade and advised against conceding significant terms while the U.S. industry can still exert pressure on the Trump administration.
The proposed agreement entails reductions in steel and aluminum tariffs from 50% to 25% and a decrease in the tariff rate on Canadian-built vehicles to 15%, with exemptions for American content. However, Canadian auto sector representatives expressed disappointment during the call when informed that their request for an exemption from American tariffs on Canadian-made content would not be granted and would instead be deferred to CUSMA negotiations.
Verheul stressed the importance of Canada formally rejecting the administration’s sectoral tariffs and maintaining duty-free trade as a key objective in the upcoming CUSMA review. He underscored the need for clear communication from Canada regarding concessions made in the agreement.
Furthermore, concerns were raised about the lack of adequate consultation with affected industries and the limited information provided to provincial leaders compared to their U.S. counterparts. The advisers on the call, including former finance minister Chrystia Freeland, highlighted the challenges of reversing tariff agreements once in place, even with potential changes in the U.S. administration.