(Bloomberg) -- The U.S. economy is “critically dependent” on supply chains with Canada, said the chairman of Alphabet Inc. as Justin Trudeau warned of the downside of a Nafta collapse.
The North American Free Trade Agreement has been “enormously successful for both countries” said Eric Schmidt, who interviewed Trudeau at a conference in Toronto Thursday. U.S. politics could drive a wedge between the U.S. and Canada, its top export market, Schmidt said at the event, held by Alphabet unit Google.
Canada continues to believe Nafta can be modernized in a way that benefits the U.S., Canada and Mexico, said Trudeau. Failing to do so would cost both countries jobs and hurt Canada “way more” than the U.S., he said. “As soon as you thicken that border or shut things down, there’s going to be negative impacts.”
The fifth round of Nafta talks is set to take place in Mexico later this month, after negotiators extended the session amid impasses on five key U.S. policy proposals that have been essentially rejected by Canada and Mexico. They include U.S. calls for a sunset clause, an overhaul of auto manufacturing, the dismantling of Canada’s dairy sector, the gutting of dispute panels and for restricted access to U.S. government procurement contracts.
“We are not going to be pushed into accepting something that is bad for Canada," Trudeau said.
Schmidt, wearing Canadian flag socks, hailed the country’s record on innovation and Trudeau personally, closed by saying “there is no leader who can articulate a vision about innovation and growth like your prime minister.”
Alphabet has invested heavily in Canadian technology. The Vector for Artificial Intelligence in Toronto is backed by Google, and sister company Sidewalk Labs was recently selected to build a digital hub on the city’s eastern waterfront.
“Canadians are inventing the future of AI through machine learning,” Schmidt said. It’s a major driver of our success. So we owe you.”
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