CANADA ECONOMICS

NAFTA

The Globe and Mail. 10 Oct 2017. Trudeau heads to Washington to staunch protectionist tide. Trudeau: Canada’s charm offensive in United States is ‘having an effect,’ expert says
LAURA STONE, OTTAWA
ADRIAN MORROW, WASHINGTON

Prime Minister Justin Trudeau flies to Washington this week to meet with Donald Trump at the White House and to address key members of the House of Representatives amid growing concern the U.S. President’s protectionist trade demands could cause NAFTA talks to collapse.
The visit comes as Canada braces for tough American demands on dairy and a U.S. content requirement for autos in the North American freetrade agreement renegotiation, and on the heels of punishing tariffs imposed on Canadian plane maker Bombardier and softwood-lumber producers.
Mr. Trudeau will meet with the President in the Oval Office on Wednesday, the same day he meets with Republican and Democrat members of the powerful House of Representatives ways and means committee on Capitol Hill. The committee has jurisdiction over all taxation and tariffs and is responsible for implementing any changes to NAFTA.
Mr. Trudeau will hold a solo news conference at the Canadian embassy; one source said Mr. Trump did not have time in his schedule for a joint media appearance.
The fourth round of NAFTA talks also starts on Wednesday in Arlington, Va., across the river from Washington. Mr. Trump’s negotiating team has taken a hard line, demanding during the last round that Canadian companies receive fewer American government contracts and angling to put even more severe measures on the table.
Mr. Trudeau is expected to speak with Mr. Trump about the free-trade negotiations, the dispute over Bombardier’s C Series jets – in which the Trump administration is imposing punitive duties that make it impossible to sell the planes in the United States – and the gridlocked talks over softwood lumber, sources with knowledge of the planned discussions said.
Officials, speaking on condition of anonymity, acknowledged that Canada is getting slammed with hard protectionist proposals at the bargaining table and needs to find some resolution with Mr. Trump.
Canada believes Mr. Trudeau’s visit will help push negotiations in the right direction, the sources said. Ottawa insists it has to keep up the outreach program, both to the White House and outside it, that it has been conducting all year in order to remind the Americans how much their economy relies on that of Canada.
Mr. Trudeau will be accompanied to Washington by his wife, Sophie Grégoire Trudeau, as well as Foreign Affairs Minister Chrystia Freeland and parliamentary secretary Andrew Leslie.
On Thursday, Mr. Trudeau will travel to Mexico City to talk trade with departing President Enrique Pena Nieto, during the Prime Minister’s first official visit to Mexico. Mr. Trudeau will also honour the victims of the country’s recent earthquakes, attend an official dinner and address the Mexican Senate on Friday. International Trade Minister François-Philippe Champagne will join Mr. Trudeau and Ms. Freeland in Mexico.
Mexico’s ambassador to the United States, Geronimo Gutierrez, told The Globe that Mexico still hopes to improve NAFTA. But he said the country is prepared to walk away from talks if it can’t get a good deal.
“Mexico’s position will continue to be serious and constructive, but we have also been very clear about the fact that we rather leave the negotiating table than [accept] a harmful deal,” he said.
U.S. Agriculture Secretary Sonny Perdue said this past week that he expects the administration will throw down some specific demands for loosening Canada’s supply-management system for dairy, eggs and poultry, which fixes prices and keep foreign imports out.
Mr. Perdue said supply management is “very unfair” and he’s not happy that so little progress has been made in NAFTA talks so far. “If you’ve ever watched a boxing match, they circle one another for a while, and I think we’ve been circling,” he said.
The Trump administration is also quietly floating a proposal to include a 50-per-cent U.S. content requirement for autos, as well as increasing the North American content to 85 per cent from 62.5 per cent, a source said. Canadian officials said there have been no formal proposals on auto content so far.
Jerry Dias, president of Unifor, which represents Canadian auto workers, said the Trudeau government won’t agree to 50-per-cent U.S. content, or a sign on to a deal that doesn’t include improved labour standards in Mexico. He said strict content requirements won’t have an impact without raising the 2.5-per-cent tariff on vehicles imported to the United States outside NAFTA, because auto makers could still move their operations to Mexico, where labour is much cheaper.
“Canada will never accept that the U.S. automatically gets 50 per cent of the industry based on rules of origin. Nobody will ever agree to that under any circumstances,” he said.
“Justin [Trudeau] ought not to be afraid to say to Trump, that, listen, we are quite comfortable walking away from a lousy deal. This isn’t you in control.”
The top business lobby group in the United States has already issued an extraordinary public warning that Mr. Trump’s tough stand in negotiations risks destroying NAFTA and swiftly throwing hundreds of thousands of Americans out of work.
“It would be an economic and political debacle,” John Murphy, the U.S. Chamber of Commerce’s senior vice-president for international policy, said at a roundtable last week.
“There’s an old adage in negotiations: ‘Never take a hostage you wouldn’t shoot.’ Withdrawal from NAFTA is an unacceptable proposition, so we’re urging the administration to recalibrate its approach.”
The Trudeau government is trying to play down concerns that Mr. Trump is prepared to pull the plug on NAFTA, with officials insisting Mr. Trudeau’s second visit to the White House will be used to bolster the two leaders’ relationship on a variety of fronts, including trade.
“The trip is an opportunity for the Prime Minister to strengthen and secure the very strong relationships that we have both with the United States and with Mexico, two key trading partners,” said Cameron Ahmad, a spokesman for the Prime Minister’s Office.
He insisted the trip is “not motivated by NAFTA,” but that Mr. Trudeau was scheduled to speak at Fortune’s Most Powerful Women Summit in Washington on Tuesday evening. The Prime Minister will also hold a roundtable on gender equality and education.
Maryscott Greenwood, chief executive officer of the Canadian-American Business Council, said the Trudeau government’s socalled charm offensive in the United States is proving useful.
“It’s having an effect in terms of increasing the understanding and awareness level in the United States among policy makers and thought leaders about how integrated our economy really is,” she said.
“I have to give the Trudeau government a lot of credit. So far, they’re pitch perfect, and that is not easy given their dance partner.”

The Globe and Mail. 10 Oct 2017NAFTA deal: Trudeau is our strongest card against Trump
DEREK H. BURNEY
FEN OSLER HAMPSON

Fen Osler Hampson, Chancellor’s Professor at Carleton University and the author of the forthcoming book Master of Persuasion: Brian Mulroney’s Global Legacy

Prime Minister Justin Trudeau’s two-day trip to Washington comes none too soon. Canada is being whipsawed by Donald Trump’s administration on many fronts. Relations are in a deep dive as Canada gets hit by punitive measures on softwood lumber (initiated by the Obama administration) and, more recently, by the outlandishly harsh tactics by the Trump administration against Bombardier, Canada’s aerospace giant, amid allegations of unfair subsidies.
A thickening fog is now enveloping the North American freetrade agreement, a cornerstone of Canadian prosperity, as talks bog down over extreme U.S. demands on procurement, content rules for autos and dispute arbitration. The next round of NAFTA talks begins in Washington on Wednesday, so the Prime Minister’s visit is timely and necessary.
In fact, despite all the American yammering about trade “deficits,” and the initially tough rhetoric directed at China, Japan and Germany, each of which have much larger trade deficits than Canada (where the United States is actually running a modest surplus) or Mexico, the only country really being hit with punitive trade measures is Canada.
Direct contact between the two leaders is the only way to clarify objectives and identify the critical ingredients for political and economic success.
Mr. Trudeau is Canada’s most powerful card. Only he can make a deal with the biggest wild card, President Trump himself, whose motives other than “make America great again” remain unclear.
The Prime Minister has assiduously courted the American President from his first day in office and from all reports has a good personal rapport with Mr. Trump. With all the turbulence in Washington, he and his officials have chosen their words carefully, displaying discipline, tact and self-restraint.
But the Prime Minister is going to have to use more than his charm when he meets with the U.S. President. He may need his boxing gloves, too.
His first challenge is to find out what Mr. Trump’s view is of the political and economic ingredients of a successful negotiation. Mr. Trump's repeated insinuation that NAFTA is “the worst trade deal ever” raises suspicion about his real intent. The Prime Minister will have to probe his true motives – concluding a mutually satisfactory deal in revising NAFTA or abrogation.
If the President wants a deal, the Prime Minister must nail down a common understanding with Mr. Trump about what constitutes “success.” That includes being clear to the President about Canadian objectives and what a “win” means for us, for example, better, more certain market access.
But Mr. Trudeau should also be firm with Mr. Trump about what demands will be show-stoppers. He should make it clear that we do not naively believe that any agreement is better than none. Mr. Trudeau should resist any pressure to make unilateral concessions while signalling that he reserves the right to say, “No thanks.” Given the propensity for protectionist, U.S. trade “remedy” measures, the dispute-settlement mechanism is more vital than ever and should be a “show stopper.”
The Prime Minister has a strong hand. There is a presidential election in Mexico next year and Mr. Trump’s failure to secure a new deal will have a negative impact on Republicans in the 2018 congressional elections. If Mr. Trump decides unilaterally to abrogate NAFTA, unscrambling the NAFTA omelette will require congressional approval as well as time-consuming legislative change, which will be much harder if the Democrats win either or both houses.
As demonstrated more than two decades ago in both the negotiation of the Canada-U.S. free-trade agreement (FTA) and NAFTA, success depends upon deep political engagement and linkage at the top leadership level. On the FTA, for example, when negotiations were deadlocked, it took direct intervention by former prime minister Brian Mulroney with former president Ronald Reagan to break the impasse. Mr. Mulroney did the same with former president George H.W. Bush in 1990 when the Americans tried to shut Canada out of NAFTA negotiations with Mexico. North America’s leaders then had a common pro-trade vision. That is not the case today and represents the biggest obstacle to success.
Mr. Trudeau’s message when he goes to the White House should be friendly, but also prudently calculated to impress upon Mr. Trump that it takes two to tango and, in this case, three to make a deal. Derek H. Burney was Canada’s ambassador to the United States from 1989-1993. He was directly involved in concluding negotiations of the free-trade agreement with the United States.

THE GLOBE AND MAIL.OCTOBER 9, 2017. NAFTA TALKS. Trudeau heads to U.S. as trade tensions mount
RYAN REMIORZ, THE CANADIAN PRESS
LAURA STONE, OTTAWA
ADRIAN MORROW, WASHINGTON

Prime Minister Justin Trudeau flies to Washington this week to meet with Donald Trump at the White House and to address key members of the House of Representatives amid growing concern the U.S. President's protectionist trade demands could cause NAFTA talks to collapse.

The visit comes as Canada braces for tough American demands on dairy and a U.S. content requirement for autos in the North American free-trade agreement renegotiation, and on the heels of punishing tariffs imposed on Canadian plane maker Bombardier and softwood lumber producers.

Mr. Trudeau will meet with the President in the Oval Office on Wednesday, the same day he meets with Republican and Democrat members of the powerful House of Representatives Ways and Means committee on Capitol Hill. The committee has jurisdiction over all taxation and tariffs and is responsible for implementing any changes to NAFTA. Mr. Trudeau will hold a solo news conference at the Canadian embassy; one source said Mr. Trump did not have time in his schedule for a joint media appearance.

The fourth round of NAFTA talks also starts on Wednesday in Arlington, Va., across the river from Washington. Mr. Trump's negotiating team has taken a hard line, demanding at the last round that Canadian companies receive fewer American government contracts and angling to put even more severe measures on the table.

Mr. Trudeau is expected to speak with Mr. Trump about the free-trade negotiations, the dispute over Bombardier's C Series jets – in which the Trump administration is imposing punitive duties that make it impossible to sell the planes in the United States – and the gridlocked talks over softwood lumber, sources with knowledge of the planned discussions said.

Officials, speaking on condition of anonymity, acknowledged that Canada is getting slammed with hard protectionist proposals at the bargaining table and needs to find some resolution with Mr. Trump.

Canada believes Mr. Trudeau's visit will help push negotiations in the right direction, the sources said. Ottawa insists it has to keep up the outreach program, both to the White House and outside it, that it has been conducting all year in order to remind the Americans how much their economy relies on that of Canada.

Mr. Trudeau will be accompanied to Washington by his wife, Sophie Grégoire Trudeau, as well as Foreign Affairs Minister Chrystia Freeland and parliamentary secretary Andrew Leslie.

On Thursday, Mr. Trudeau will travel to Mexico City to talk trade with outgoing President Enrique Pena Nieto, during the Prime Minister's first official visit to Mexico. Mr. Trudeau will also honour the victims of the country's recent earthquake, attend an official dinner and address the Mexican Senate on Friday. International Trade Minister François-Philippe Champagne will join Mr. Trudeau and Ms. Freeland in Mexico.

Mexico's ambassador to the United States, Geronimo Gutierrez, told The Globe that Mexico still hopes to improve NAFTA. But he said the country is prepared to walk away from talks if it can't get a good deal.

"Mexico's position will continue to be serious and constructive, but we have also been very clear about the fact that we rather leave the negotiating table than [accept] a harmful deal," he said.

U.S. Agriculture Secretary Sonny Perdue said last week that he expects the administration will throw down some specific demands for loosening Canada's supply management system for dairy, eggs and poultry, which fixes prices and keep foreign imports out.

Mr. Perdue said supply management is "very unfair" and he's not happy that so little progress has been made in NAFTA talks so far. "If you've ever watched a boxing match, they circle one another for a while, and I think we've been circling," he said.

The Trump administration is also quietly floating a proposal to include a 50-per-cent U.S. content requirement for autos, as well as increasing the North American content from 62.5 per cent to 85 per cent, a source said. Canadian officials said there have been no formal proposals on auto content so far.

Jerry Dias, president of Unifor, which represents Canadian auto workers, said the Trudeau government won't agree to 50-per-cent U.S. content, or a sign onto a deal that doesn't include improved labour standards in Mexico. He said strict content requirements won't have an impact without raising the 2.5-per-cent tariff on vehicles imported to the United States outside NAFTA, because auto makers could still move their operations to Mexico, where labour is much cheaper.

"Canada will never accept that the U.S. automatically gets 50 per cent of the industry based on rules of origin. Nobody will ever agree to that under any circumstances," he said.

"Justin [Trudeau] ought not to be afraid to say to Trump, that, listen, we are quite comfortable walking away from a lousy deal. This isn't you in control."

The top business lobby group in the United States has already issued an extraordinary public warning that Mr. Trump's tough stand in negotiations risks destroying NAFTA and swiftly throwing hundreds of thousands of Americans out of work.

"It would be an economic and political debacle," John Murphy, the U.S. Chamber of Commerce's senior vice-president for international policy, said at a roundtable last week.

"There's an old adage in negotiations: 'Never take a hostage you wouldn't shoot.' Withdrawal from NAFTA is an unacceptable proposition, so we're urging the administration to recalibrate its approach."

The Trudeau government is trying to play down concerns that Mr. Trump is prepared to pull the plug on NAFTA, with officials insisting Mr. Trudeau's second visit to the White House will be used to bolster the two leaders' relationship on a variety of fronts, including trade.

"The trip is an opportunity for the Prime Minister to strengthen and secure the very strong relationships that we have both with the United States and with Mexico, two key trading partners," said Cameron Ahmad, a spokesman for the Prime Minister's Office.

He insisted the trip is "not motivated by NAFTA," but that Mr. Trudeau was scheduled to speak at Fortune's Most Powerful Women Summit in Washington on Tuesday evening. The Prime Minister will also hold a roundtable on gender equality and education.

Maryscott Greenwood, chief executive officer of the Canadian-American Business Council, said the Trudeau government's so-called charm offensive in the United States is proving useful.

"It's having an effect in terms of increasing the understanding and awareness level in the United States among policy makers and thought leaders about how integrated our economy really is," she said.

"I have to give the Trudeau government a lot of credit. So far, they're pitch perfect, and that is not easy given their dance partner."

REUTERS. OCTOBER 10, 2017. Canada's Trudeau to tell Trump: we're not your problem at NAFTA
David Ljunggren

OTTAWA (Reuters) - When Canadian Prime Minister Justin Trudeau meets President Donald Trump on Wednesday, he will try to persuade the U.S. leader to focus on Mexico as a source of potential problems at talks to update NAFTA.

Although Trudeau officials were confident Trump would mostly target Mexico as the three nations started to renegotiate the North American Free Trade Agreement, Washington has slapped duties on Canadian Bombardier airliners and lumber exports in recent months and talked tough on dairy and wine.

Foreign Minister Chrystia Freeland said Trudeau would “explain really clearly to the President ... that Canada is not America’s problem”.

Freeland, who says Canada buys more from the United States than China, Britain and Japan combined, told CTV television on Sunday that Trudeau’s message to Trump at their White House meeting would be “We are your biggest client.”

Trump has threatened to scrap the 1994 pact unless changes are made to address issues such as a $64 billion deficit with Mexico. Negotiators start the fourth of seven planned rounds of talks near Washington on Wednesday.

Freeland describes the U.S. administration as the most protectionist since the 1930s while noting the United States runs a surplus in the trade of goods and services with Canada.

Canada has so far shunned confrontation with Washington, stressing instead the merits of NAFTA and free trade. By no means everyone south of the border is convinced.

Chris Sands, a professor at the Nitze School of Advanced International Studies at Johns Hopkins University, said Canada’s problems marked “a new era of tough love” with Washington.

“It turns out Trump is an economic nationalist ... and it’s come as a bit of a surprise to the Canadians that they have been so much on the hot seat,” he said.

Trudeau officials deny Trump is targeting Canada as part of the NAFTA talks, saying the airliner and softwood disputes have been rumbling on for years.

Mexico has been more assertive with Washington, talking openly about abandoning NAFTA if need be or slashing imports of U.S. grain.

Andres Rozental, a former Mexican deputy foreign minister involved in the original NAFTA talks, said Ottawa had assumed traditionally close ties with the United States would insulate them from problems with NAFTA.

“The Canadians have been jolted into the realities of Trumpland,” he said. “They have now realized that Trump doesn’t follow the mould and that there is no such special relationship.”

Additonal reporting by Dave Graham in Mexico City; Editing by Susan Thomas

BLOOMBERG. 10 October 2017. Trump Welcomes Trudeau to Washington With Another Nafta Threat
By Josh Wingrove

• U.S. President tells Forbes pact will need to be ‘terminated’
• Trudeau arrives as fourth round of talks begins in Washington

President Donald Trump renewed his threat to walk away from the North American Free Trade Agreement just as Canadian Prime Minister Justin Trudeau arrives in Washington on the eve of a new round of negotiations.

Trump told Forbes, in an interview published Tuesday, he thinks Nafta will have to be terminated -- as signals mount the U.S. is putting potentially deal-breaking proposals on the table and as the top U.S. business group sounds the alarm.

The fourth round of talks resume Wednesday. The U.S. is expected to detail a proposal for the auto sector that would raise the minimum content requirement for parts sourced in the Nafta region and in the U.S. specifically.

“I happen to think that Nafta will have to be terminated if we’re going to make it good. Otherwise, I believe you can’t negotiate a good deal,” Trump said in the Forbes interview. He said he considered it a “great accomplishment” to pull out of the Trans-Pacific Partnership trade pact, which included the three Nafta countries, and that he favors bilateral pacts.


On Tuesday evening, Trudeau is scheduled to attend the Fortune Most Powerful Women gala that Ivanka Trump may also attend. The next day, the prime minister visits the White House for meetings with Trump -- with no joint press conference scheduled -- after he and his foreign minister, Chrystia Freeland, speak with members of the U.S. House Committee on Ways and Means. Trudeau will hold a press conference on his own after he meets with Trump.

‘Protectionist’ U.S.

While Trump has regularly targeted the U.S. trade deficit with Mexico in renegotiating the deal, tensions are rising with Canada, the top buyer of U.S. exports. The U.S. imposed duties on Canadian manufacturer Bombardier after a trade challenge filed by U.S. plane-maker Boeing Co. Trudeau and U.K. Prime Minister Theresa May have called on Trump to intervene.

Freeland, a former trade minister appointed to her role this year primarily to deal with Nafta talks, has begun to issue warnings and temper expectations, saying in a television interview this weekend the Trump administration is the most protectionist since the 1930s.

Nafta talks are scheduled to run Oct. 11 to Oct. 15 in Washington. Speaking there on Tuesday, Freeland declined to predict what Nafta will look like in the future and reiterated Canada believes in free trade.

“What we’d like to do with Nafta is modernize it. This is a 23-year-old agreement and the economy has moved on,” she told the Most Powerful Women summit in an interview Tuesday, while also plugging Canada’s proposal to add a gender chapter to the trade deal. “If you think that’s a good idea, let the White House know.”

Mexico Visit

Trump administration officials have said they want a deal by December, a timeline that observers say is increasingly unlikely. Mexican Economy Minister Ildefonso Guajardo said last week he wants a deal by the end of Spring 2018. Mexican Presidential elections and U.S. mid-term elections scheduled for next year threaten to add to tensions in negotiations.

Trump can withdraw the U.S. from the deal after giving Canada and Mexico six months’ notice, though experts debate whether the president would require congressional approval.

Trudeau is scheduled to visit Mexico City on Oct. 12 and 13 after his two-day Washington trip. it’s his first official visit to Mexico, with Trudeau’s office saying he and President Enrique Pena Nieto will discuss trade issues.

— With assistance by Justin Sink

AVIATION

BOMBARDIER. BOEING. OCTOBER 10, 2017. Britain turns up heat on Boeing, warns of fallout over Bombardier. Britain's Secretary of State for Business, Energy and Industrial Strategy Greg Clark said British officials have held a dozen meetings with Boeing executives and he has met with the company’s chief executive officer Dennis Muilenburg to urge him to withdraw the Bombardier complaint.
PAUL WALDIE, EUROPEAN CORRESPONDENT

Britain's business minister Greg Clark has given the strongest indication yet that Boeing Co.'s commercial and military contracts with the British government are at risk because of the aerospace company's trade dispute with Bombardier Inc.

In a statement to Britain's House of Commons on Tuesday, Mr. Clark said British officials have held a dozen meetings with Boeing executives and he has met with the company's chief executive officer Dennis Muilenburg to urge him to withdraw the complaint.

Mr. Clark said he also made it clear to Mr. Muilenburg that, "If there is to be a continuing relationship then we need to have the confidence that [Boeing] will deal fairly with the United Kingdom. If this is to be a strategic partnership, it needs to be a partnership, and partners don't take the kind of action against an important United Kingdom interest that Boeing are seeking to do."

When asked specifically by Labour MP Kevan Jones whether Boeing was putting its commercial opportunities in the U.K. at risk unless it relented, Mr. Clark replied: "Yes".

The U.S. Department of Commerce has proposed duties of nearly 300 per cent on imports of Bombardier's C Series aircraft because of a complaint by Boeing that alleges the Montreal-based company has received illegal support from the Canadian and U.K. governments, and that Bombardier sells the planes in the U.S. at absurdly low prices. The rulings are preliminary and a final decision on the tariffs is expected early next year.

Mr. Clark reiterated on Tuesday that the British government was "bitterly disappointed" with the U.S. action and he added that Britain is working closely with the Canadian government on overturning the decision. He said British assistance to Bombardier, roughly $186-million, was legal and similar to the support the government has given to Boeing and other companies.

British Prime Minister Theresa May has twice spoken to U.S. President Donald Trump about the dispute.

Bombardier employs around 4,200 workers in the U.K., mainly in Northern Ireland at plants that make wings for the C Series. It has been estimated that another 9,000 jobs in the province are indirectly dependent on the Bombardier operation. Boeing has a sizable presence in Britain as well. The Chicago-based company employs about 2,300 people in the U.K. and it has recently begun construction of a $32-million facility in Sheffield that will make parts for "actuators" which move the flaps on jet wings. Britain's defence ministry also has contracts to buy P-8 spy planes and 50 Apache helicopters from Boeing.

Mr. Clark said on Tuesday that while Boeing's operations in Britain were important, the Bombardier case highlighted a bigger issue. "In participating in the aerospace sector … we expect, just as the Canadian government does, that if you are participating in institutions that are promoting the sector, you're not at the same time recklessly damaging another very important part of the sector," he told Members of Parliament.

He added that he told Mr. Muilenburg that Boeing's reputation was at risk in the U.K. "We were very clear that Boeing has a reputation in this country that was beginning to grow in a positive way through the investment in Sheffield and elsewhere, and to jeopardize that reputation and relationship by doing something that is completely unjustified, is something that I don't regard as being in the strategic interests of Boeing, and I said that very explicitly."

BOMBARDIER. BOEING. REUTERS. OCTOBER 10, 2017. Britain hopes U.S. will keep politics out of Bombardier decision
Alistair Smout

LONDON (Reuters) - Britain hopes a provisional U.S. ruling imposing tariffs on Canadian aerospace manufacturer Bombardier (BBDb.TO) will not be politically influenced when new evidence is considered, UK Business Secretary Greg Clark said on Tuesday.

Clark said he was confident the British government could successfully fight the complaint, which was brought by Boeing (BA.N) and could cost jobs in the British province of Northern Ireland.

“Following the initial determination, there is then a further call for evidence ... we look to the U.S. to make sure that this is a rigorous process and is not politically influenced,” Clark told lawmakers.

The U.S. Commerce Department has raised proposed trade duties on Bombardier CSeries jets to nearly 300 percent, backing Boeing’s complaint that the Canadian company received illegal subsidies and dumped the planes at “absurdly low” prices.

The decision could effectively halt sales of Bombardier’s new plane to U.S. airlines by quadrupling the cost of the jets imported to the United States, although Clark said the jet did not directly compete with Boeing’s aircraft.

Clark said British Prime Minister Theresa May had twice discussed the dispute with U.S. President Donald Trump, and that several members of the British government had reinforced their “serious concerns” with the U.S. administration over the ruling.

He added Britain would discuss the ruling with the United States, Canada and the two companies in the coming days.

Bombardier is the largest manufacturing employer in Northern Ireland, and the decision to impose duties on the planes has put 4,200 jobs at risk.

But Britain is also a major base for Boeing. The company has recently begun constructing its first European parts manufacturing site in Sheffield, northern England, and Britain has warned that Boeing might miss out on future business over the row.

“Boeing has a reputation in this country that was beginning to grow in a positive way, through the investment in Sheffield and elsewhere,” Clark said.

“To jeopardize that reputation and relationship by doing something that is completely unjustified is something that I don’t regard as being in the strategic interests of Boeing.”

Additional reporting by Michael Holden; Editing by Stephen Addison and Mark Potter

INTERNATIONAL TRADE

IMF. BLOOMBERG. 10 October 2017. IMF Warns Against Complacency Even as Global Growth Gains Steam
By Andrew Mayeda

• Most major economies set to grow faster than once expected
• Fund warns medium-term risks are still tilted to downside

The International Monetary Fund warned policy makers not to get too comfortable even as it raised its global growth forecast amid brightening prospects in the world’s biggest economies.

The Washington-based lender lifted its growth outlook for the U.S., the euro area, Japan and China from its last forecast in July. The recovery spans roughly 75 percent of world output, according to the IMF.

The fund projects the global economy will grow 3.6 percent this year and 3.7 percent next, in both cases an increase of 0.1 percentage point from its previous estimate. Analysts surveyed by Bloomberg expect gross domestic product to climb 3.4 percent in 2017 and 3.5 percent in 2018.

Either way, the recovery is accelerating from a low gear -- global growth of 3.2 percent last year was the slowest since the Great Recession of 2007-2009. The fund warned that medium-term risks are tilted to the downside, highlighting dangers from tightening financial conditions, low inflation in advanced economies, financial turmoil in emerging markets and protectionist policies.

“Neither policy makers nor markets should be lulled into complacency,” IMF chief economist Maurice Obstfeld said in the World Economic Outlook report. “A closer look suggests that the global recovery may not be sustainable -- not all countries are participating, inflation often remains below target with weak wage growth, and the medium-term outlook still disappoints in many parts of the world.”

Brighter Outlook

Finance ministers and central bankers from the IMF’s 189 member nations will be heartened by the brighter global outlook as they meet this week in Washington for the fund’s annual meetings. In a speech last week, Managing Director Christine Lagarde said the IMF is seeing “some sun break through” for the world economy. Investors have been basking for some time, with the MSCI world stock index up 15 percent this year.

But Lagarde warned that a strengthening recovery may be masking more troubling trends, such as an increase in political polarization brought about by inequality. The specter of trade wars also remain, though they may be less of a danger than at recent global economic summits. The same week as the IMF meetings, negotiators from the U.S, Mexico and Canada will meet less than five miles away for the fourth round of increasingly tense talks to overhaul the North American Free Trade Agreement.

The IMF bumped up its forecast for U.S. growth to 2.2 percent in 2017 and 2.3 percent in 2018 from 2.1 percent for both this year and next in its July estimates. “Very supportive” financial conditions and high business and consumer confidence are buoying the nation’s prospects, said the fund. The IMF’s base case doesn’t take into account fiscal stimulus from tax reforms backed by President Donald Trump and Republican leaders in Congress.



The fund now expects growth in the euro area of 2.1 percent this year and 1.9 percent next, both up 0.2 point from three months ago, as the currency zone’s prospects strengthen on the pickup in global trade, ongoing strength in domestic demand and diminished political risk.

Growth in Japan is being driven by global demand and policies designed to keep fiscal policy supportive. The IMF projects Japan will grow 1.5 percent this year, up 0.2 point from July, before downshifting to 0.7 percent in 2018, which is still 0.1 point higher than anticipated three months ago.

The IMF raised its call on growth in China to 6.8 percent this year and 6.5 percent in 2018, up 0.1 point in each year compared with July.

The IMF is encouraging countries to take advantage of the benign climate to boost the growth potential of their economies and cushion the impact of the next downturn. In rich nations, central banks should keep monetary policy loose until there are firm signs of inflation, the fund said.

Countries should take steps to improve productivity while putting in place policies that reduce the pain of adjustment to labor-saving technology and globalization, the IMF said.

“Policy makers should act while the window of opportunity is open,” according to Obstfeld.

GLOBAL AFFAIRS CANADA. 2017-08-11. Canada and the Pacific Alliance.

The Pacific Alliance is a regional initiative created in 2011 by Chile, Colombia, Mexico and Peru that seeks the free movement of goods, services, capital and people. The purpose of the Alliance is to promote greater competitiveness and economic growth for member countries, as well as to expand economic relations with the Asia-Pacific region.

Canada has been actively deepening its engagement with the Alliance since becoming an observer in 2012. This spans the June 2016 Canada-Pacific Alliance Joint Declaration on Partnership and three cooperation projects worth more than $21 million over five years.

In June 2017, Canada was among the first countries invited, along with Australia, New Zealand and Singapore, to become an Associate Member of the Pacific Alliance.

The Pacific Alliance

The Pacific Alliance is not only a platform of commercial integration, but also develops common objectives and shares best practices in a number of areas, such as:

• tourism
• intellectual property
• regulatory frameworks
• gender issues
• innovation
• mining
• climate change

The four members have opened joint trade promotion offices, and participate together in trade shows around the world. In 2015, all four countries’ stock exchanges were integrated into a common market known as MILA.

With a combined GDP of almost $2.3 trillion, and more than 220 million inhabitants, the Pacific Alliance constitutes an important market for Canada.

Of the 52 observers of the Pacific Alliance, Canada is considered one of the most active in developing dynamic and productive ties with the Pacific Alliance.

Canada-Pacific Alliance Joint Declaration on Partnership

The Joint Declaration identifies six areas for increased cooperation:

• trade facilitation and promotion
• education and training
• small and medium-sized enterprises
• science, technology and innovation
• responsible natural resource development and corporate social responsibility
• environment, including climate change and ocean conservation

Canada-Pacific Alliance cooperation projects

In June 2016, Canada announced three cooperation projects with the Pacific Alliance to support the Joint Declaration. Valued at more than $21 million over five years, these projects focus on:

• trade facilitation and promotion
• education and training
• small and medium-sized enterprises
• responsible natural resource development and corporate social responsibility

Canada-Pacific Alliance commercial relations

Canada has comprehensive and ambitious free trade agreements with all four Pacific Alliance members. Canada also has an important presence in these countries with $49.6 billion of Canadian direct investment abroad (CDIA) in 2016. That is approximately 19% of the total investment abroad for the Latin American and Caribbean region.

Canada’s total merchandise trade with Pacific Alliance countries reached $48 billion in 2016, representing more than 75% of Canada’s two-way trade with this region.

The extractive sector represents a particularly important sector for Canadian companies in Pacific Alliance countries, with $49.0 billion of Canadian mining assets in 2015 (28.7% of all Canadian mining assets abroad). In 2015, Canada hosted a delegation of government officials from Pacific Alliance countries for an extractive sector study tour, to support the development and maintenance of their regulatory frameworks. The tour also promoted Canada as a partner of choice in responsible mineral development and demonstrated Canada’s commitment to deepening its ties with the Pacific Alliance in this sector.

GLOBAL AFFAIRS CANADA. Conference of the Americas on International Education (CAIE) 2017

Date: October 11-13, 2017
Location: Montreal, Quebec, Canada
Target Audience: Higher education institutions from all regions of the Americas
Sector: Education

CAIE provides a platform for higher education institutions and organisations from all regions across the Americas to discuss topics related to international higher education and internationalisation. Trade Commissioners from Brazil, Chile, Colombia, Mexico, Guatemala, Panama and Peru that specialize in the education sector will be actively participating in the event to support of Canadian clients in their internationalization goals.

CAIE 2017: http://tradecommissioner.gc.ca/quebec/events-evenements/0004550.aspx?lang=eng

MRE. AIG. 09 de outubro de 2017. Nota 337. Declaração conjunta sobre um possível acordo abrangente de livre comércio entre os estados-membros do Mercosul e o Canadá 

O ministro das Relações Exteriores do Brasil, Aloysio Nunes, encontrou-se com o ministro do Comércio Internacional do Canadá, François-Philippe Champagne, em 9 de outubro de 2017, à margem da Conferência Mini-Ministerial da OMC, em Marraquexe. O ministro Aloysio Nunes atuou em nome do Mercosul, já que o Brasil ocupa atualmente a Presidência Pro Tempore do bloco. Ao final da reunião, os ministros acordaram o que segue:

DECLARAÇÃO CONJUNTA SOBRE UM POSSÍVEL ACORDO ABRANGENTE DE LIVRE COMÉRCIO ENTRE OS ESTADOS-MEMBROS DO MERCOSUL E O CANADÁ

Os ministros expressaram sua satisfação com a perspectiva de aprofundar as relações bilaterais entre o Mercosul e o Canadá por meio de um potencial acordo de livre comércio, confirmada pelos resultados positivos preliminares do diálogo exploratório que está em andamento.
Os ministros reconheceram que, dado o tamanho das economias canadense e do Mercosul e do comércio bilateral, existe um forte potencial para o desenvolvimento de uma relação comercial mais ambiciosa através do aumento dos fluxos de comércio e investimento.
Os ministros expressaram a esperança de que o Canadá e o Mercosul possam demonstrar conjuntamente o valor do comércio e do investimento na construção da prosperidade mútua, de forma inclusiva e progressiva.
Neste contexto, os ministros comprometeram-se a promover exercício conjunto de definição de escopo com vistas a possíveis negociações de livre comércio e instruíram seus representantes para que continuem sua estreita colaboração a este respeito.

Marraquexe, em 9 de outubro de 2017.

INNOVATION

Innovation, Science and Economic Development Canada. 2017-10-06. Backgrounder. Innovation Superclusters Initiative: Third-Party Quotes

The Innovation Superclusters Initiative will allocate targeted, high-value investments worth a total of $950 million. Industry-led consortia were invited to apply under a two-phase process.

The first phase attracted more than 50 letters of intent, which represented more than 1,000 businesses and 350 other participants from all regions of Canada. The applicants put forward strategies to increase growth and create jobs across a wide range of innovative industries.

“The Innovation Superclusters Initiative will create a competitive advantage for Canada by bringing together high-value innovative industries and world-class researchers to accelerate innovation and energize the economy. The Superclusters Initiative will allow us to scale up our business partnerships by strategically leveraging our cutting-edge research facilities and world-class talent. In the initial stage of the supercluster competition, our research-intensive universities have worked closely with regional and sectoral leaders. We look forward to continuing to build these ambitious partnerships through the supercluster program and beyond.”

– Dr. Guy Breton, Chair, U15 Group of Canadian Research Universities, and Rector, Université de Montréal

“All thriving advanced economies are anchored by concentrations of high-growth domestic innovative businesses. These groups of businesses are called superclusters. Canada’s superclusters are sources of high-margin exports and new revenue for our economy. I welcome the efforts by Minister Bains to design a strategic initiative that advances Canadian entrepreneurs and begins a sustained growth of Canada’s innovation outputs.”

– Jim Balsillie, Chair, Council of Canadian Innovators

“The Government’s bold supercluster initiative has advanced and deepened innovation ecosystems in key economic areas of the country. The inclusion of polytechnics and colleges in the supercluster program criteria has laid the ground for new innovation collaborations, as seen by the robust representation of our members in the competitive process for superclusters. The final selection of superclusters will benefit our economy precisely because they will harness polytechnic commercialization and innovation solutions for industry.”

– Nobina Robinson, Chief Executive Officer, Polytechnics Canada

“Superclusters bring researchers, students and businesses together in new collaborative ways that will help transform Canada’s economy and improve lives. Harnessing discovery research in partnership with business and civil society creates lasting benefits for Canadians and positions us well in the new global economy.”

– Paul Davidson, President, Universities Canada

“Canadian businesses are eager to invest in promising technology, skills and research partnerships across the country. Thanks to this initiative, a large and growing number of companies, academic institutions and start-ups are exploring new ways of working together.”

– The Honourable John Manley, President & CEO, Business Council of Canada

“The ‘new competitiveness’‎ is all about leadership in transformative technologies and cutting-edge innovation applied to all sectors of the economy. To achieve this, countries need the depth and density of talent, technology and capital that, today, only global superclusters can attract and retain. That is why the Government of Canada’s Supercluster initiative is so pivotal: by creating Canada-based superclusters in various areas, it will boost high growth sectors and new jobs through  Canadian leadership in pathbreaking technologies and business innovation diffusion. Through such a technology and innovation focus, Canada can compete with the world’s best and win.”

– The Honourable Kevin G. Lynch, P.C., O.C., PH. D, LL.D, Vice-Chair, BMO Financial Group; former Clerk of the Privy Council, Secretary to the Cabinet and Head of the Public Service of Canada

The Globe and Mail. 10 Oct 2017. Ottawa narrows ‘supercluster’ hopefuls. Superclusters: Ottawa calls on nominees for job-creation plans. Identifies nine industry consortiums across the country that move on to next stage in competition for $950-million in financing
SEAN SILCOFF, OTTAWA

Poorly done, [the superclusters initiative] will be simply another regional economic subsidy

Richard Gold, Director for McGill University’s Centre for Intellectual Property Policy

Ottawa has chosen nine industry consortiums that will qualify to receive $950-million under the Liberal government’s flagship innovation initiative known as its “superclusters” program, The Globe and Mail has learned.
Groups comprising Ontario mining giants, Quebec aerospace manufacturers, Prairie agriculture companies, Atlantic Canadian fishing and energy enterprises, Alberta construction firms and dozens of other prominent Canadian corporations are among the nine bidders selected by government officials from more than 50 letter-of-intent applications submitted in July. Full applications are due from shortlisted groups by Nov. 24, and the government plans to announce up to five finalists in early 2018.
The identities of shortlisted groups has been a closely guarded secret given more than 1,000 firms – including many of Canada’s largest corporations – participated in the process. The list will be unveiled by Innovation Minister Navdeep Bains and cabinet colleague Ralph Goodale at news conferences across Canada this week, starting Tuesday in Halifax and Montreal.
But senior government sources on Monday revealed the short list to The Globe. Those bids include: An “oceans supercluster” headed by energy company Emera Inc. and Clearwater Seafoods Inc., both of Nova Scotia, that would invest in digital technologies for offshore industries; An “advanced manufacturing” supercluster drawn from companies and universities in the Toronto-Waterloo corridor, including auto parts maker Linamar Corp., Maple Leaf Foods Inc. and software startup Miovision Technologies Inc. aimed at improving manufacturing efficiencies;
A “protein innovations” supercluster from Saskatchewan led by agriculture firms including Regina’s Alliance Grain Traders Inc. and American giant DowDuPont Inc.;
And an “AI-powered supply chain” supercluster led by Quebec City’s Optel Group and backed by such Quebec Inc. mainstays as BCE Inc., CGI Group and Alimentation Couche-Tard that intends to use artificial intelligence to improve business processes in retail, manufacturing and infrastructure sectors.
Other shortlisted applicants include a group led by Montreal flight-simulator maker CAE Inc. looking to bring digital technology advances to aerospace and other industries; a second agriculture consortium led by Calgary-based Agrium Inc. aimed at making Canada a preferred global supplier of “sustainable high-quality safe food” and a “digital technology” group drawn from a swath of B.C. firms including Telus Corp. and Timberwest Forest Corp. and six postsecondary institutions.
“We’re very happy to have been successful to this stage,” said Doug Morrison, chief executive officer of the Centre for Excellence in Mining Innovation, who is spearheading a shortlisted bid backed by many of Canada’s largest mining firms, including Barrick Gold. Corp., to turn Canada into a leading source of cleaner mining technology and industry practices. “The industry needs to make major changes to its technology platforms. And Canada, more than any other country except for Australia, is best capable of making that transition.”
The government originally announced a $800-million “cluster” funding plan in 2016 but boosted it in the March, 2017, budget to $950-million, suggesting it could fund sectors including advanced manufacturing, agrifood, clean tech, digital technology, health/biosciences, clean resources and infrastructure and transportation. Indeed, the short list covers those sectors and all major regions of the country.
The superclusters funding was included in a package of innovation-friendly items unveiled by the Liberals in the previous budget, which also included a $400-million funding infusion for venture capital firms that invest in startups, $1.4-billion in new financing for clean technology, $125-million to support Canada’s teeming artificial-intelligence sector and a new procurement program to help startups sell their wares to government. The government also launched reviews to improve Canada’s intellectual-property protection regime and how Ottawa spends on an array of innovation-funding programs.
The government kicked off the program in May, offering to fund consortiums in specific sectors comprising large “anchor” corporations, smaller firms and postsecondary institutions. The consortiums were expected to pledge to spend at least $1 for every dollar requested from government and propose plans to create jobs and commercial activity while ensuring any breakthrough intellectual property developed by the groups benefited Canadian, rather than foreign interests. Government officials said the nine shortlisted groups promised to spend anywhere from $200-million to $900-million on their proposals, and in aggregate, pledged $1.50 for each $1 requested. For example, the private-sector backers of the mining proposal promised to put up $327-million while asking for $185-million from Ottawa.
Government officials indicated final bids could be different from the short list; they have encouraged the nine groups to bring in more participants and lay out more ambitious job-creation plans in their final applications – and likewise told unsuccessful bidders to seek out and join groups that made it this far. “We’re saying to those shortlisted: you haven’t won anything yet, go out and improve your bids,” a senior government official said. “For us, this is all about [creating] jobs.”
Some critics have questioned the program, saying government shouldn’t pick winners and losers, while questioning how a supercluster – which must be administered by a non-profit body – is supposed to function. “Poorly done, this will be simply another regional economic subsidy,” warned Richard Gold, director of McGill University’s Centre for Intellectual Property Policy.
But he and others who have criticized Ottawa’s poor track record for helping innovative industries in the past said the program shows more promise than previous initiatives. “I think superclusters are a very good idea” because they will bring industry participants together to “start behaving like communities rather than individual actors,” said Dan Breznitz, co-director of the Innovation Policy Lab at the University of Toronto’s Munk School of Global Affairs. That “is the best thing that Canada can do.”

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LGCJ.: