U.S. Warns Ottawa Against Pursuing A Free Trade Deal With China

The federal government in Ottawa has been rebuked by U.S. officials in Washington, D.C. over efforts to establish a free trade agreement with China.

The Liberal Government of Prime Minister Justin Trudeau is being warned that its relationship with the United States could be put in jeopardy if Canada pursues free trade talks with China. The warning comes amid contentious talks aimed at revising the North American Free Trade Agreement (NAFTA) and adds further strain to an already fractious situation.

Former Conservative cabinet minister James Moore, who is a member of the federal government's hand-picked NAFTA council, says entering into formal free trade discussions with the Chinese would give U.S. President Donald Trump ammunition against Canada and the NAFTA negotiations. President Trump has said publicly that he would consider canceling NAFTA and pursue a bilateral trade agreement with Canada instead.

“President Trump has made it very clear that he has an antagonistic view of China,” Mr. Moore told reporters following a panel discussion on NAFTA held in Ottawa. “Canada runs the risk of providing Donald Trump with an argument to say that Canada can't be trusted, because we will have cheap Chinese goods that violate labour standards.”

Mr. Moore is urging Ottawa to put trade plans with Beijing on hold until NAFTA is “put to bed.” To date, Canada and China have completed four rounds of exploratory free trade talks. The Liberal Government has not said if those talks were successful, and if it wants to enter into formal free trade talks. Officials at the Department of Foreign Affairs and International Trade (DFAIT) have acknowledged that formal discussions with China would move slowly and the process could last for years.

“One in five Canadian jobs is dependent on trade with the United States … don't jeopardize that by saying to the Americans that a free trade agreement with China is about to happen, and ruin our reputational equity with the administration. That is a huge risk that Canada should not take,” said Mr. Moore.

Chrystia Freeland, Canada's Foreign Affairs Minister, appeared to shrug off Mr. Moore's suggestions.

“Trade diversification is extremely important to us,” she said during a news conference in Toronto on Thursday. “We've always understood the value of trade diversification, and perhaps now we understand it more urgently than ever.”

Minister Freeland did acknowledge to the media the ongoing tensions at the NAFTA negotiating table.