Janice Charette appears as a witness at the Foreign Interference Commission in Ottawa, on Wednesday, Oct. 9, 2024.Spencer Colby/The Canadian Press
Janice Charette, Canada’s chief trade negotiator with Washington, warned of possible turbulence in discussions on the future of the United States-Mexico-Canada Agreement, asking businesses to lobby their American counterparts and predicting talks will not be wrapped up by the agreement’s July 1 review date.
Ms. Charette has kept a low public profile since February, when Prime Minister Mark Carney appointed her as head of the country’s negotiating team. Her remarks, made Tuesday at an Ottawa business forum, were a glimpse into her thinking as the review date approaches.
“I need Canadian businesses to reach out to your clients, reach out to your partners in the United States,” she said.
Carney unveils new Canada-U.S. advisory council ahead of potentially rocky USMCA talks
“Help them to make the case for the economic relationship with Canada, for the review and renewal of this agreement.”
“We’re their No. 1 customer,” she added. “So let’s use the power of the customer.”
Canada, the U.S. and Mexico are entering a scheduled review of the USMCA. The agreement specifies that the three parties must meet on July 1 and agree to extend it for 16 years or start a process of annual reviews for 10 years, after which the agreement would end. Any of the countries can withdraw on six months’ notice.
Ms. Charette also urged businesses to stay calm. She said Canada “could be facing some turbulence” ahead as Ottawa tries to preserve the existing USMCA – which allows most Canadian goods to enter the U.S. duty free – and resolve a series of U.S. tariffs that are damaging the steel, aluminum and auto sectors.
“We need to hold our nerve,” she said, repeating earlier cautions from Mr. Carney last year that there may still be residual U.S. tariffs in place on Canadian imports at the end of the process.
“It’s not clear that we are going to go back, necessarily, to the beautiful tariff-free existence we had.”
Mr. Carney on Sunday said in a video address that Canada’s close economic ties to the U.S. – once a strength — had become weaknesses.
But Ms. Charette mounted a strong defence of the economic access to the United States afforded by the USMCA, calling the agreement “the envy of the world.” She said her mandate is to preserve this preferential access. “We do actually have the very best trade deal of any of the major U.S. trading partners.”
She said it’s clear talks on renewing the USMCA will not be finished by July 1, echoing previous comments from U.S. Trade Rep. Jamieson Greer. And she played down the significance of this date, calling it a “checkpoint” and “not a cliff” for the three countries.
Canadians should not expect “we have everything resolved with a bow ready to go by July 1,” Ms. Charette said.
She also advised Canadians to prepare for negative commentary. “We’re in a negotiating process,” she said, “so you’re not going to hear a whole lot of public bouquets necessarily thrown our way.”
Carney says close ties to U.S. have become ‘weaknesses’ that must be corrected
And she said Canada’s silence on the talks should not be construed as problematic.
“Not all progress is going to be visible here, and you will hear all kinds of things through this negotiating process. We’re not going to negotiate this in public.”
A key question heading into the review is whether the agreement will remain trilateral, or whether the U.S. will split it into two separate deals with Canada and Mexico. Ms. Charette said she expected the final arrangement to be a combination of bilateral and trilateral elements.
She said she anticipates trilateral conversations around rules of origin, which determine how much of a product must be sourced within North America to trade tariff-free, particularly in the auto space. U.S. officials have said they want to tighten regional content rules, to reduce the amount of manufacturing inputs sourced from outside North America, and from China in particular.
But she said she expected there to be separate bilateral discussions between Washington and Ottawa and Washington and Mexico City to address specific issues. And these would likely result in some sort of separate side agreements, she said.
U.S. trade representative says deal with Canada must include higher tariffs
“Given the way the tariffs have been put in place, and given some of the issues that each of our countries have raised, there’s a bilateral piece as well as a trilateral,” Ms. Charette said.
“So my counterpart in the U.S. has described this to me as kind of like a snap-on LEGO bilateral piece to the underlying framework USMCA agreement. So I think that’s a good metaphor in my mind about where we are likely to end up in a process that will take us through July 1.”
Mr. Greer made similar comments at an event two weeks ago. He said he expected core elements of the trilateral agreement – what he referred to as “load-bearing pillars”– would remain in place, but that Washington would also negotiate “two separate protocols” with Ottawa and Mexico City to address specific bilateral issues.
Trade experts think this could happen in a series of side letters to the agreement, or potential changes to specific USMCA chapters.