Can U.S. industry convince Trump to renew free trade in North America_ _ Power & Politics

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00:00Some of the most powerful voices in American industry are weighing in on whether the U.S.

00:05should keep its free trade deal with Canada and Mexico this week.

00:08The federal U.S. trade office is holding public hearings starting Wednesday as part of the mandatory review of the Kuzma trade deal next year.

00:17There's been over 1,500 submissions in advance, including from the U.S. National Association of Manufacturers,

00:24which says Kuzma, quote, is the most pro-U.S. manufacturing trade agreement in history.

00:30Automaker Ford goes even further, saying that under a renewed deal,

00:33Trump's sector-specific tariffs on goods like steel and aluminum should only apply to countries outside of North America.

00:40Some U.S. players are asking for concessions from Canada, too, like the International Dairy Foods Association,

00:46which calls on Washington to fix the broken access for U.S. dairy exports to Canada.

00:51So will these hearings help or hinder Canada's pursuit of a renewed free trade deal with the U.S.?

00:57Julian Cara Gessian is a former special advisor on international trade to the Ministry of Finance

01:02and a visiting lecturer on economics at McGill University.

01:06He's with me in studio.

01:07Thank you very much for joining me.

01:08Thank you for having me.

01:09Now, you've read not all 1,500.

01:11Well, I'm going to call you out here.

01:13More than 50 of these submissions to the U.S. trade representative.

01:16What was your big-picture takeaway for how much support there is for Canada?

01:21I would say the overwhelming majority of the submissions I read.

01:25So I picked 25 on purpose and I picked 25 randomly.

01:28And the overwhelming majority are in favor of maintaining some form of free trade within North America.

01:36And in terms of the argument that they are making, what would we want to know about that?

01:42If you look at one of the biggest associations out there that's big business, the U.S. Chamber of Commerce,

01:48they're making the argument that all three countries benefit massively from the specialization that trade allows,

01:56that the supply chain integration, the competitiveness vis-a-vis the rest of the world.

02:01As you mentioned Ford, Ford mentioned that 80% of their vehicles are assembled in the United States.

02:08And then they benefit immensely from supply chain integration with both Canada and Mexico.

02:15You have the Spirits Associations of the United States, the Whiskey Association.

02:20They want to get back in on those shelves, right?

02:22Yes, they do.

02:23And even like the Sunflower Association, there's so many different submissions.

02:26That's sort of, that's, I suppose, I want to laugh because it's surprising,

02:31but it also speaks to the breadth of the impact that we're seeing of some of these tariffs.

02:36The manufacturing group who called the deal the most supportive of its sector in history represents 14,000 companies.

02:44How much sway can they hope, or can we hope, that they would have with the president?

02:50I mean, they were careful to point out that they have companies in every state of the union

02:58and that $3 trillion of the United States, $31 trillion of GDP is affected by trade

03:06and is represented by their membership.

03:09And that, you know, millions of jobs, 13 million they mentioned.

03:13So they have sway.

03:15Now, the Trump administration and President Trump seem to have some kind of plan to disrupt the system,

03:21to short-circuit global trade in favor of the United States.

03:25They want to re-industrialize the country and bring manufacturing jobs.

03:30They want to make America great again.

03:32But these associations and these big businesses that are American are saying that this is,

03:37very politely, they're saying this may not be the right way to do that.

03:40Well, so this may not be the right way to do that against, but to, let's say,

03:46a president who, you know, tariff man, the most beautiful world in the U.S., the English language.

03:52I've used tariffs to end several wars.

03:54Like, does, he's not, he, unlike you, sir, I imagine he's not reading these things.

04:00And I don't know to what extent he's influenced by politeness.

04:03So will this make a difference at all?

04:05Well, these interests are heavily represented in the former Rust Belt, or in the Rust Belt states,

04:12in the farming states of the Midwest, and both of which are hurting.

04:16They may be benefiting in part from the steel tariffs, but manufacturing jobs are in their eighth or month,

04:23nine month of decline.

04:25The farming states of the Midwest are hurting from the trade war with China.

04:29So it's not clear, at least in the immediate to short term, that President Trump's plan is working.

04:37You know, he may make an argument that it may work in the long term.

04:40But I think if I want to read into President Trump's plan and those who are advising him,

04:46they may have a longer term plan that, and disruption may be part of it.

04:51Do you think that Canada is likely to be better or worse off when we're done talking about the Kuzma renewal process?

04:59Well, yeah, that's the key question, isn't it?

05:02I think that this current administration is not really interested, and they've said so directly to us,

05:10and they've said to Mexico as well.

05:11They're indifferent, they said, to whether there's a free trade agreement or not.

05:16And so I think they prefer divide and rule, which would be two bilateral agreements,

05:21one with Canada, one with Mexico.

05:23And I don't think they want to do a 16-year renewal of Kuzma.

05:26I think they want to do an annual review.

05:29And I imagine that just means, it's a bit hyperbolic, but endless instability, right?

05:35If we're talking about every year, a new chance to open this up,

05:38as long as Donald Trump or someone of Trumpian views is president, the disruption is near constant.

05:44It's worth noting that some of the young, under-40 conservative economists that advise the Trump administration,

05:51they say quite openly, and without trying to be pernicious,

05:56they say quite openly that disruption is their agenda,

05:59and that to make an omelet, you have to break some eggs.

06:04So I think what we're going to see, if the Trump administration can be convinced to renew Kuzma,

06:09I think they're going to try and extract the most concessions possible,

06:14critical minerals, energy, access to our water, dairy, and maintaining sectoral tariffs.

06:21Well, it is a useful starter guide, an unsettling one to this period.

06:26Thank you very much for taking the time to talk us through this.

06:28Julian Karagessian with McGill University.

06:31Thank you for having me, Catherine.

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