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Former Negotiator Says Time Favors Canada in USMCA Talks
Ex-Canadian Negotiator Steve Verheul Cites Rising Pressure on US Economy During April 8 Panel Discussion
Pressure on the U.S. economy is building, and Canada can likely get the best outcome in trade negotiations by waiting, according to the former Canadian negotiator who helped draft a new deal during President Donald Trump’s first term.
“Time is on our side because I think the pressures on the U.S. are only going to increase over time,” said Steve Verheul, who was Canada’s chief trade negotiator from 2017 to 2021 and now works as a private consultant.
Trump’s second-term approach to trade — applying broad tariffs on many trading partners as leverage — is “not providing the kinds of benefits they thought it would provide,” Verheul said, speaking April 8 at a panel discussion hosted by Bank of Montreal on the topic of global trade. It hasn’t resulted in a revival of U.S. manufacturing jobs, he said.
The war in Iran has caused supply disruptions in energy, aluminum, fertilizer and other commodities. Canada plays a central role in those supply chains and can help the U.S. administration, Verheul said.
Given the uncertain environment for investment, “there will be further pressure to try to get to places where we have more stability, more predictability,” he said. “That’s positive for Canada because that’s what we’re looking for.”
A growing number of Federal Reserve officials are worried the war couldfurther stoke inflationand wanted to make clear following their March meeting that the central bank may have to consider raising interest rates, according to minutes of that meeting, released April 8.
MORE: Tricky USMCA Negotiations Begin
The U.S.-Canada-Mexico Agreement, which currently governs trade on the continent, is set for a formal review this year because July 1 will mark six years since it came into force.
U.S. Trade Representative Jamieson Greer said April 7 that he intends to outline the U.S. position on the agreement on June 1.
“I think that we aren’t probably going to be able to resolve all issues by July 1, but I think we are on track to resolve many of them and to move as quickly as we can,” Greer said, speaking at the Hudson Institute.
U.S. concerns about trade with Canada and Mexico are different, Greer added, and he expects there will be side deals negotiated with each country alongside any broader agreement among the three countries.
