Justin Trudeau dreams of closer Canadian ties with China. The deal he just made with President Donald Trump makes it harder for that to happen.
The new trade agreement between the U.S., Canada and Mexico includes a provision that requires one member to notify the others if it launches trade talks with a non-market economy. If those talks lead to a deal, the signatory could potentially be frozen out of the North American pact.
It’s essentially a China clause, with the Trump administration gearing up for trade war with Beijing. It’s also partially symbolic. But for Trudeau, it’s either a concession or an admission that his aspirations for a free-trade deal China have fallen flat.
The Canadian prime minister’s visit to China fizzled last year, and he rejected a major takeover this spring. But in a Cabinet shuffle this summer — when the fate of the North American Free Trade Agreement was still unclear — he added “diversification” to his new trade minister’s title. And now he’s effectively siding with the U.S. against the Asian powerhouse.
“The U.S. is going to get all its partners to gang up on China, but it’s clear that Canada did this because there was a gun to its head,” said Mary Lovely, an economics professor at Syracuse University who studies trade issues. “Now Canada has its hands tied.”
The U.S. and Canada reached their deal late Sunday, shortly before a deadline, and published the legal text that would allow it to be signed by the end of November. The U.S.-Mexico-Canada Agreement, as the new NAFTA is known, still needs to be ratified by the U.S. Congress and other legislatures before coming into force.