Canada Feels Anti-Trade Winds Blowing North From U.S. Election

(Bloomberg) -- The U.S. presidential election is looming large at the Canadian government’s summer retreat, with U.S. trade ties among the discussion points for Prime Minister Justin Trudeau and his cabinet.

Trudeau and his ministers are holding a quarterly retreat in Sudbury, Ontario, on Sunday and Monday. The closed-door meetings include a presentation on Canada-U.S. relations led by the Canadian ambassador to Washington, David MacNaughton, and Foreign Affairs Minister Stephane Dion, according to Trudeau spokesman Cameron Ahmad. Trudeau’s cabinet will further discuss U.S. trade during a “fireside chat” Sunday evening, Ahmad told reporters Sunday.

Canada and the U.S. appear headed for conflict on trade issues, including the Trans-Pacific Partnership (TPP) agreement and on softwood lumber. The two nations are among the 12 countries to agree initially to the TPP, although Democrat Hillary Clinton and Republican Donald Trump both say they oppose it in the run up to the U.S. presidential election. Trump has also vowed to walk away from the 22-year-old North American Free Trade Agreement if Mexico won’t agree to better terms.

‘Something Going On’

“Everyone’s interested in the anti-trade rhetoric that’s going on with the United States,” MacNaughton said in an interview. “You can’t have the Bernie Sanders phenomenon, the Donald Trump phenomenon, Hillary Clinton saying the things that she’s saying, without realizing that there’s something going on, right? It’s a challenge for us.”

Trudeau has said he’s strongly pro-trade while not endorsing or rejecting the TPP, which was agreed to by his predecessor. Trudeau and President Barack Obama committed in June to work toward a new softwood lumber pact after the previous deal expired in 2015, while acknowledging they remained far apart on key issues. Canadian softwood exports have increased during a one-year tariff grace period that expires in October, and one Canadian official warned last week that major barriers remain in the way of any agreement.

Pro-trade members of the U.S. Congress are reluctant to publicly back trade deals as protectionist sentiments swirl, MacNaughton said, putting pressure on Canada to promote the benefits for the U.S. of continued, even expanded, trade. “My message to cabinet and everyone in Canada is the only way we can deal with this is to continue to try and talk to Americans about how trade with Canada is not just a benefit to Canada, it’s a benefit to the U.S.,” he said.

One of the Trudeau cabinet meeting’s major focuses will be “on relationships -- relationships with the provinces, relationships with the United States and of course relationships with indigenous peoples,” the prime minister said in a brief statement at the start of the gathering.

Trudeau, whose domestic popularity has continued to soar since his decisive victory in last year’s elections, has regularly avoided comment on the U.S. presidential campaign, saying he has confidence in American voters and will work with whomever is elected.

To contact the reporter on this story: Josh Wingrove in Ottawa at jwingrove4@bloomberg.net. To contact the editors responsible for this story: Bernard Kohn at bkohn2@bloomberg.net, Ros Krasny, John Shipman