When Prime Minister Justin Trudeau meets here with U.S. President Donald Trump on Oct. 11, the stakes are high.
The Canadian side is entering this little summit with barely concealed animosity. Officials will tell you – and indeed a case can be made – that Ottawa is facing the most protectionist American administration since the 1930s.
The North American free-trade agreement talks, to be blunt, are failing. There have been three rounds. They're at the halfway point. They're stalled. On the separate softwood lumber issue, there is what Ottawa sees as complete intransigence on Washington's part. A third great bilateral bone of contention is the outrageous duties levied against Montreal-based Bombardier on aircraft sales.
Deciding to let things fester no longer, Mr. Trudeau set up the Oval Office meeting. The intent is for him to be pointed with Mr. Trump, more pointed than in previous talks. Bringing things to a head with the most mercurial, volatile President anyone can remember can be risky business.
Not to worry, says David MacNaughton, our unflappable Washington ambassador. The two leaders have built a positive, constructive rapport. Given that relationship, acrimony is unlikely. There won't be a feud along the lines of a Pierre Trudeau and Ronald Reagan, or a Lester Pearson and Lyndon Johnson. "The risk is only if they don't keep talking."
On NAFTA, what Ottawa is looking for, the ambassador says, is clarity. There are so many mixed signals as to what the United States wants. The big complaint entails trade deficits particularly as they relate to manufacturing. But from Ottawa's standpoint, it makes no sense. The ambassador reminded the Americans recently that they have a $34-billion surplus with Canada on manufactured goods. He cheekily wondered what they are prepared to do about it.
Asked if there has been a response, he said, "I'm still waiting." If they are really concerned about that issue, "they should have absolutely no concerns about Canada. Quite the contrary, the concerns should be on our side."
Mr. Trudeau might well ask Mr. Trump, "Where is the problem with Canada?" Ottawa is convinced it is mainly with Mexico. An official put a number on it, saying "it's 95 per cent Mexico." The Prime Minister moves on to meet the Mexican President after the Trump bilateral.
On the dispute with Boeing, tempers will be tested. Ottawa has no intention, officials say, of taking the hit, of sitting back and watching the U.S. Department of Commerce and Boeing driving Bombardier, our largest industrial company, into the ground. There will be no backing down on Ottawa's retaliation threat – withdrawing plans to purchase billions worth of Boeing fighter jets.
What will Mr. Trump say to that?
On NAFTA, an issue where some common ground might be found, says Mr. MacNaughton, is on rules of origin. The Trump administration recently released a study, one which Ottawa disputes, showing that U.S. value-added content is significantly declining for manufactured goods, particularly auto parts, imported from Mexico and Canada. Ottawa is concerned that if the issue isn't addressed properly, the effect might be to drive production out of North America. "It's not that we're having a big fight with them about this," says the ambassador. "It's about understanding what it is they are actually trying to achieve."
There have been three rounds and so much is still so vague and there are few doubts as to where the fault lies. If NAFTA negotiations continue to flounder and no agreement is reached, it's back to the status quo. That's not so bad for the Canadian and Mexican sides and not so bad for a great many American stakeholders. But it is not something, given all his ranting and raving about the trade agreement, that Mr. Trump can accept.
No agreement could drive him to play, as he has threatened, the killer card: withdrawal from the accord. Mr. Trudeau can't play cute. He has to convince him that this would be crazy, as crazy as the levies against Bombardier, as crazy as hewing to 1930s-styled protectionism in the 21st century.