e-Gonomics

CANADA ECONOMICS

APEC

Global Affairs Canada. November 13, 2017. Foreign Affairs Minister concludes participation in annual APEC Leaders’ Week

Manila, Philippines - In recent years, Canada has significantly strengthened its engagement and partnership with the Asia-Pacific region and, in particular, member states of the Association of Southeast Asian Nations (ASEAN).

On Sunday, the Honourable Chrystia Freeland, Minister of Foreign Affairs, concluded a successful working visit to Da Nang, Vietnam, where she attended the Asia Pacific Economic Cooperation (APEC) Leaders’ Week from November 8 to 11, 2017.

On the margins of APEC, the Minister also held productive meetings with her counterparts from Australia, China, Japan, Mexico, South Korea and the United States. At these meetings, the Minister focused on issues of vital regional and international importance, including North Korean provocations, the plight of the Rohingya‎ and the renegotiation of the North American Free Trade Agreement (NAFTA).

At the APEC Ministerial Meeting, the Minister reiterated Canada’s unwavering support for a multilateral, rules-based international order.

The Minister also participated in the APEC CEO Summit, speaking about the effects of the technological revolution on the nature of work and the role that governments and the private sector must play in preparing for change.

Minister Freeland and Prime Minister Trudeau are presently in Manila, Philippines, where the Prime Minister is representing Canada at the East Asian Summit (EAS) for the first time ever. While there, the Minister will attend a luncheon for foreign ministers from the EAS and invited guests.

Quotes

“Canada is a Pacific nation, with important people-to-people, cultural and economic ties to the Asia-Pacific region. Further deepening those ties is critical to our commitment to upholding a multilateral, rules-based international order. ‎Through this work, we are able to promote our interests and values while contributing to issues of regional and international significance.”

- Hon. Chrystia Freeland, P.C., M.P., Minister of Foreign Affairs

Quick facts

More than 20 Government of Canada departments are engaged in APEC’s broad agenda, which includes women’s economic empowerment and mental health.
Canada supports a series of development and security programs for the ASEAN region having a total value of more than $235 million per year.

See also:

Mission of Canada to the Association of Southeast Asian Nations (ASEAN): http://www.international.gc.ca/asean/index.aspx?lang=eng

The Globe and Mail. The Canadian Press. 14 Nov 2017. Duterte secures summit invite for Trudeau. Canadian Prime Minister expected to press Philippine President on human-rights issues at Asia-Pacific security event
ANDY BLATCHFORD

Rodrigo Duterte went “out on a limb” to secure a key invitation for Justin Trudeau to attend a prestigious Asia-Pacific security event alongside powerful world leaders, government officials say.
But one senior insider insists the Philippine President’s helpful gesture won’t have any effect on whether Mr. Trudeau confronts him about human-rights violations in the southeast Asian country that have shocked people around the world.
Mr. Trudeau has hinted he might bring up the issue of human rights with Mr. Duterte, if he gets the opportunity.
The leaders have no one-on-one meetings planned while the Prime Minister is visiting the Philippines for summits related to the Association of Southeast Asian Nations.
Francisco Fernandez of the Philippine embassy in Ottawa says Canada asked for the invitation and Manila didn’t hesitate to grant it, in part because of trade and investment ties and in part because 837,000 people of Filipino descent live in Canada.
Thanks to Mr. Duterte’s effort, Mr. Trudeau will have a coveted opportunity Tuesday to participate in a working lunch in Manila ahead of an ASEAN-affiliated meeting known as the East Asia Summit. Mr. Trudeau will join leaders from 18 countries, including China, Russia and the United States, to discuss security issues.
It remains to be seen if Mr. Trudeau will challenge Mr. Duterte face to face over his violent drug war. Mr. Duterte’s bloody crackdown has included extrajudicial killings by his government that have left thousands dead.
“There are a range of issues that I could bring up with him, that I may bring up with him, if we have an opportunity,” Mr. Trudeau said Saturday in Danang, Vietnam. “There’s always human-rights concerns to bring up with a wide range of leaders.”
Mr. Fernandez said Mr. Duterte’s position is clear: “He was elected on the platform that he would be addressing the illegal-drugs situation in the Philippines and that is what he’s doing.”
Mr. Trudeau’s ticket to Tuesday’s luncheon is a breakthrough because no other Canadian prime minister has ever been invited. He’s expected to discuss North Korea and the violent attacks on Rohingya Muslims in Myanmar. Eventually, Canada hopes to become a permanent member of the East Asia Summit.
Mr. Trudeau will also be the first Canadian leader to participate in a one-hour exchange at the ASEAN summit, during which members will ask him questions and debate the depth of Canada’s co-operation in the region.
The opportunity arrives at a time when Mr. Trudeau is making efforts to raise Canada’s international profile and demonstrate it can wrestle with complicated challenges, at home and abroad.
Without the invitation from Mr. Duterte, who is the summit’s chair, Mr. Trudeau wouldn’t have made it through the door.
“It is the prerogative of the chair each year of ASEAN to invite guests,” said one senior government official, who spoke on condition of anonymity because they weren’t permitted to discuss the matter in public. “Traditionally, there have been very few of those, so in a way the Philippines have gone out on a limb, let’s say.”
Mr. Fernandez said Canada has been cementing its relationship with ASEAN and has a permanent ambassador to the organization’s secretariat in Jakarta.
“We are of the impression that part of the reason that Canada wanted to be present in Manila for the East Asia summit is to again show their commitment to ASEAN as a region,” he said.
Looking to the future, the official said Canada hasn’t received any signals that the East Asia Summit is accepting new members. But it’s still viewed as an excellent opportunity for Mr. Trudeau to deliver a sales pitch on why Canada would make a good member and how it can contribute as a Pacific country itself.
Mr. Fernandez said the ASEAN member countries have agreed on a moratorium on new members “at this time,” but it is possible Canada could join if that consensus changed.
Under Liberal and Conservative governments, Ottawa has taken steps in recent years to engage more actively with ASEAN.
The East Asia Summit brings together 10 ASEAN members plus eight additional countries: China, Japan, South Korea, Australia, New Zealand, India, Russia and the United States.

THE GLOBE AND MAIL. THE CANADIAN PRESS. NOVEMBER 13, 2017. ASEAN SUMMIT
Trudeau sings Canada’s praises to ASEAN on trade, promises help with Rohingya
ANDY BLATCHFORD

MANILA, PHILIPPINES - Prime Minister Justin Trudeau delivered a sales pitch to core members of the Association of Southeast Asian Nations on Tuesday in hope they will open the door to Canada joining their exclusive and influential circle.

Trudeau said Canada looks forward to becoming a member of the association's East Asia Summit and the ASEAN defence ministers panel at the earliest opportunity.

"Canada is not only willing, but ready to be a key partner for the next 50 years," Trudeau said in a speech in Manila, Philippines, at a special ASEAN-Canada summit in front of leaders of an alliance that includes Indonesia, Vietnam and Myanmar.

"This would allow Canada to become a full and dynamic partner of ASEAN."

With the appearance, Trudeau became the first Canadian prime minister to participate in the one-hour exchange at the ASEAN summit, during which members were to ask him questions and debate the depth of Canada's co-operation in the region.

The opportunity arrives as Trudeau makes efforts to raise Canada's international profile and demonstrate it can wrestle with complicated challenges, at home and abroad. His government has also been building a case with hope it can eventually obtain a seat on the United Nations Security Council.

Trudeau was asked later in the day about why he's interested in expanding Canada's engagement in the Asia-Pacific region.

He replied that Canada currently has a mostly economic relationship with the region through its membership at the Asia-Pacific Economic Co-operation.

"There is more than just economics to discuss and the East Asia Summit has become the central place for discussing Pacific issues," he told a news conference Tuesday.

"Canada is a Pacific country, as you well know, and being able to engage on broader issues of security, of development, of human rights, of economic opportunity — broader than just the APEC group — is very much in line with how Canada wants to and should engage constructively with the region and, indeed, with the world."

The East Asia Summit is a larger ASEAN grouping focused on security that brings together leaders from 18 countries, including the U.S., China and Russia.

"Canada is deeply committed to multilateral institutions and fora, and the East Asia Summit is an important one in an extremely compelling and growing region of the world," he said.

During his speech, Trudeau highlighted Canada's efforts to help the Rohingya Muslims in Myanmar, including its decision to appoint former Liberal MP Bob Rae as a special envoy to the region.

He told the room that Rae will engage in diplomatic efforts and identify ways in which Canada can support the response to the situation and the plight of the Rohingya minority.

Trudeau was referring to a crackdown against the Rohingya by Myanmar's security forces that began in late August. The alleged attacks have forced more than 600,000 Rohingyas into exile in neighbouring Bangladesh.

Trudeau also said Canada stands alongside Asia in demanding that North Korea abandon its nuclear weapons and ballistic missile programs.

"North Korea must immediately cease all activities that go against its international obligations and United Nations Security Council resolutions," he said.

Trudeau attended the ASEAN summit thanks to an invitation from Philippine President Rodrigo Duterte, who sat across from the Canadian leader as he made his remarks.

Francisco Fernandez of the Philippine embassy in Ottawa says Canada sought the invitation and Manila didn't hesitate to grant it, partly because of trade and investment ties and partly due to the 837,000 people of Filipino descent who live in Canada.

BLOOMBERG. 14 November 2017. Trump Declares Trade ‘Rules Have Changed’ as Asia Trip Concludes
By Justin Sink and Jennifer Jacobs

Heads back to Washington after 11-day, five nation visit
‘I made a lot of friends at the highest levels,’ Trump says

President Donald Trump ended his swing through Asia, hailing progress toward his goal of reducing the U.S. trade deficit.

Trump took off from Manila aboard Air Force One on Tuesday, skipping the final session of meetings hosted by the Association of Southeast Asian Nations. The trip, which included stops in Japan, South Korea, China and Vietnam, brought Trump in contact with dozens of leaders, including the heads of Asia’s five biggest economies and a brief encounter with Russian President Vladimir Putin.

“After my tour of Asia, all Countries dealing with us on TRADE know that the rules have changed,” Trump said on Twitter on Tuesday. “The United States has to be treated fairly and in a reciprocal fashion. The massive TRADE deficits must go down quickly!”

The president spent the bulk of his public appearances emphasizing the need to reduce trade deficits, and also pushed for Asian nations to buy U.S. military equipment. He publicly advocated his “America first” policies, warning U.S. trading partners that he was ready to take more protectionist steps in a bid to help American businesses and workers.

Trump announced on Twitter that he will be making a “major statement” when he returns to Washington. But while Trump made rhetorical waves during his first visit to the region as president, questions about how much he actually achieved continue to linger.

Business deals announced by the president are tentative agreements that may not be fulfilled. And while the president railed against what he viewed as systemic flaws in the U.S. trading relationship with its Asian partners, he neither publicly requested nor received specific assurances to address issues like market access and intellectual property theft.

‘Tremendously Successful’

Instead, the president seemed to relish the efforts by Asian leaders to lavish him with state dinners and ceremonial welcomes. Each of his Asian hosts appeared eager to fete Trump with elaborate parades and entertainment, in efforts that solicited warm praise from the U.S. president -- without the expense of actual policy concessions.

The president and senior White House staff say that the red-carpet treatment was itself a win, and underscored new deference and respect for the U.S. in relationships they say were worn thin by former President Barack Obama’s efforts within the region. And they argue Trump will be able to capitalize the relationships in the future, parlaying his warm ties with Asian leaders into major concessions on trade, military sales, and foreign policy.

“I made a lot of friends at the highest levels,” Trump said Tuesday. Praising himself for a “tremendously successful trip,” he said said things had gone well from the moment he walked off the plane.

Nonetheless, Trump left without attending the plenary session of the East Asia Summit, despite earlier extending his stay to include what he called the “the most important day” of the trip. The gathering provides a platform for leaders from the broader region to discuss a range of economic and security issues.

The president returns to Washington facing a battle over tax reform and more congressional hearings probing his administration’s ties to Russia.

“Excited to be heading home to see the House pass a GREAT Tax Bill with the middle class getting big TAX CUTS!” he said on Twitter.

BLOOMBERG. 13 November 2017. Five Things You Need to Know to Start Your Day
Get caught up on what's moving markets in Asia.
By Luke Kawa

Trump’s trip wraps up, Chinese and Indian bond damage in focus, and a monthly update on the state of the world’s second-largest economy. Here are some of the things people in markets are talking about.

Homecoming

The final day of U.S. President Donald Trump’s sojourn abroad will see him attend the start of the East Asia Summit before heading back to Washington, D.C., where he’ll find domestic politics raging even hotter than when he left. The Republican Congress is still struggling to put together a tax cut plan that’ll be palatable to a sufficient number of lawmakers in the House and the Senate, while another woman has come forward accusing Roy Moore, the Republican candidate for the U.S. Senate from Alabama, of sexually assaulting her when she was 16. During his first presidential visit to Asia, Trump characterized the region as the “Indo-Pacific,” affirming the U.S. desire for India to step up its influence as a countervailing force to China. His failure to hold an official meeting with Russia’s Vladimir Putin at the APEC summit in Vietnam, coupled with comments suggesting he believed the Russian president’s pledge that Russia didn’t intervene in the 2016 U.S. presidential election, managed to please neither side. In Manila, the president did manage to bond with Philippine President Rodrigo Duterte over their mutual dislike of Trump’s predecessor.

A Tale of Two Bond Selloffs

Two powerhouse Asian economies are seeing borrowing costs creep to uncomfortably high levels, taking their cues from the retreat in U.S. Treasuries. 10-year Chinese sovereign bond yields rose to a three-year high of close to 4 percent on Monday as data showed October credit growth slowed by more than analysts anticipated. Still, side effects of China’s deleveraging campaign don’t warrant a freak-out about global growth just yet. In India, a quickening of inflation that exceeded economists’ expectations in October drove domestic 10-year yields to nearly 7 percent, with the data dimming the potential for further interest rate cuts from the Reserve Bank of India.

Chinese Checkup

The monthly Chinese data dump may command even more attention than usual amid the jitters in the nation's bond market. Retail sales in October are forecast to accelerate to an annual pace of 10.5 percent, while industrial production growth moderates to 7.3 percent year-on-year. Last month's figures, released during the Chinese Communist Party Congress, pointed to resilience in third-quarter activity. Elsewhere in the Asia-Pacific region, Australian business confidence and Indian wholesale prices for October are also due out. A jam-packed economic calendar in Europe features the preliminary third-quarter reading of German growth, forecast to hold steady at 0.6 percent quarter-on-quarter, GDP updates from Italy, Poland, Hungary, the Czech Republic, and the Netherlands, and a host of inflation releases.

Small Gain for Stocks

U.S. stocks crawled higher to start the week, and 10-year Treasury yields inched above 2.4 percent. Shares of General Electric Co. plunged more than 7 percent after the blue-chip company cut its quarterly dividend and new CEO John Flannery detailed a turnaround plan that failed to impress many investors. The British pound was the worst-performing G-10 currency, with U.K. Prime Minister Theresa May’s colleagues in open revolt. Bitcoin provided investors with another reminder that it’s an unreliable store of value, with the cryptocurrency tumbling nearly 30 percent from a record high over the weekend before paring a good chunk of those losses as Monday wore on. West Texas Intermediate futures traded sideways as OPEC Secretary-General Mohammad Barkindo said that production cuts were the “only viable option” to rebalance the global crude market.

Futures Mixed

Nikkei 225 futures are trading to the upside a day after the gauge suffered its biggest loss in seven months. During his speech early on Tuesday morning, Bank of Japan Governor Haruhiko Kuroda stressed the difficulty of breaking the country’s deflationary mindset. S&P/ASX 200 futures, meanwhile, are in negative territory ahead of the open. JD.com Inc. posted an unexpected third-quarter profit that saw its American depositary receipts end the session 3.5 percent higher. Japanese bank Mizuho Financial Group will remain in focus after putting forward an uninspiring long-term outlook and saying it will cut thousands of positions. Dimming odds of U.S. tax reform were cited as the proximate cause for the retreat in the MSCI Asia Pacific Index to start the week.

NAFTA

The Globe and Mail. 14 Nov 2017. Canada to stand firm against U.S. protectionist demands as NAFTA talks resume. Ottawa believes failing to reach a deal is better than agreeing to a bad one
ADRIAN MORROW, WASHINGTON
GREG KEENAN, TORONTO
STEVEN CHASE, OTTAWA

Canada will give no ground on the Trump administration’s protectionist demands when the renegotiation of the North American free-trade agreement resumes this week in Mexico City, but will try to quickly reach deals on easier issues in hopes of showing goodwill, sources familiar with Ottawa’s strategy said.
The Trudeau government is well aware that taking a hard line on Washington’s “poison pill” proposals risks blowing up the talks, said the sources, who spoke on condition of anonymity to describe confidential discussions. But Ottawa believes failing to reach a deal on NAFTA is better than agreeing to a bad one.
Mexico is in a similar place. One source characterized Enrique Pena Nieto’s administration as being in the fifth stage of grief: acceptance that there may be no avoiding the end of the deal.
Outside the talks, Canadian officials will continue their long-running outreach campaign to NAFTA-friendly U.S. businesses and politicians, in hopes of both cranking up domestic pressure on the White House to back off its toughest demands and mobilize Congress to oppose President Donald Trump if he tries to pull the United States out of the pact, the sources said.
No matter how badly talks go, the sources said, Canada is determined to stay at the table and force the Trump administration to decide whether it will pull the plug. One person said that if negotiations become permanently deadlocked – or Mr. Trump ends up in a standoff with Congress on whether he has the unilateral power to pull the United States out of the pact – this would not be the worst outcome for Canada as the current deal would simply remain in place.
Now, a pact governing $1.3-trillion in annual trade hangs in the balance as Canada braces for a bargaining table showdown with the world’s most powerful country and sets a collision course with its volatile President.
“The Canadian government has shown that it is tough at the negotiating table, at the same time showing a willingness to continue with the process. But it’s been faced with aggressive and unyielding U.S. demands,” said Lawrence Herman, a veteran Toronto-based trade lawyer. “We’ll know what the likelihood is of these negotiations going further in the Mexican round. The prognosis is not good.”
In Ottawa’s view, Washington’s main protectionist demands are so far beyond the pale of any modern free-trade agreement that – at least for now – negotiators must continue to hold a hard line against them all, according to sources with knowledge of the Canadian thinking. These include proposals to require that vehicles made in Canada and Mexico contain 50-per-cent U.S. content; gut or eliminate the disputeresolution mechanisms in Chapters 11, 19 and 20; severely limit the amount of U.S. public procurement Canadian and Mexican firms can bid on; and add a sunset clause that would kill NAFTA in five years unless all parties agreed to keep it. Canada does, however, believe it can build negotiating momentum by swiftly reaching agreement on less contentious issues, such as slashing red tape at the border and facilitating international e-commerce, the sources said. Some negotiators see a third category in between the non-negotiable proposals and the easy ones: matters that will be tough but that Ottawa might be willing to deal on.
These include raising Canada’s $20 cap on duty-free online purchases, tightening intellectual-property protections and granting more access to Canada’s protected dairy market. It will, however, be tough for the Canadians to make any compromises on such matters while the first set of protectionist U.S. demands remains on the table, sources said.
The Trudeau government has for weeks been fully prepared for the United States to tear up NAFTA. Sources with knowledge of Ottawa’s thinking said some officials were bracing for the Trump administration to trigger the Article 2205 withdrawal procedure during the fourth round of talks last month near Washington. Instead Robert Lighthizer, Mr. Trump’s trade czar, surprised Canada when he opened an Oct. 17 meeting with Foreign Minister Chrystia Freeland at his office by announcing he wanted to scrap the U.S.-imposed year-end deadline for a deal, extend talks to March and take more time between negotiating rounds.
Meanwhile, Ottawa is continuing its push to get free-trade-friendly American business and politicians to knock the Trump administration off its hardline positions. The idea is to use this pressure strategically, said people with knowledge of Canada’s plans. Rather than have U.S. companies bombard the White House all at once, the plan is to line up American allies and keep them on standby, ready to jump in at the right moment. When negotiators are discussing procurement at the bargaining table, for instance, that would be the time for American firms with Canadian government contracts to launch a lobbying blitz.
The U.S. business community has been making a full-court press, trying to show the White House that its protectionist ambitions would hurt American industry. But the administration does not seem to be getting this message.
“I don’t know that we’ve heard any particular acknowledgment of the arguments that we’ve made at a political level,” said Christine Bliss, president of the Coalition of Services Industries, which represents companies from high-tech to insurance to finance. “Where is this going and what’s the strategy? We honestly don’t know.”
Ms. Bliss said a vast swath of the U.S. service industry would be hurt if markets between the three countries closed up. American firms, for instance, provide insurance for three-quarters of Mexican government employees, she said. But she said the administration’s consistent response in meetings is that the White House is mostly focused on the manufacturing sector, which it believes has suffered because of NAFTA.
Even in manufacturing, however, American firms are alarmed at what Mr. Trump is trying to do. Several U.S. auto-industry trade associations last month joined together for what they said was the first time in their history to defend NAFTA. Groups representing the Detroit Three auto makers and their global rivals said seven million auto jobs are at risk if the deal is terminated. The group has formed a coalition called Driving American Jobs, with a website that provided a form letter for members to download and send to members of Congress.
“When you examine the data, there’s no question that NAFTA has helped advance the global competitiveness of the U.S. auto industry,” Matt Blunt, president of the American Automotive Policy Council, said in a statement. In a presentation in Washington last week he warned that, without NAFTA, tariff and other costs would be equivalent to “a $10-billion tax” on U.S. consumers buying cars.
The President’s own congressional caucus could also prove a counterweight to the White House. Unlike Mr. Trump, most of the Republican Party hews to a traditional pro-business line on free trade.
During Prime Minister Justin Trudeau’s meeting last month with the House ways and means committee, not a single member advocated tearing up NAFTA, said one person who was in the room. Members of the committee, which has jurisdiction over trade, suggested various ways to improve the deal, but all were supportive of largely keeping the open market in place, the source said.
Republican Senator Pat Roberts of Kansas last month said he has personally lobbied Mr. Trump on the benefits of free trade on three occasions. “We are fighting a pervasive view that our economy has not benefited from NAFTA and that is simply not right. We are coming to a crossroads,” Mr. Roberts said in a speech at the U.S. Chamber of Commerce. “Saddle up.”
Mr. Roberts said “it might be an option” for Congress to craft legislation that would restrain Mr. Trump from pulling the United States out of NAFTA, but he still hoped U.S. business could talk him down from the ledge: “Let’s hope we don’t get to that.”
Given the chasm between the Trump administration’s demands on one side and the Canadian, Mexican and U.S. industry position on the other, some observers said it was hard to imagine how the talks could come back from the brink.
Flavio Volpe, president of the Automotive Parts Manufacturers Association of Canada, said the U.S. desire to extend the talks is at odds with its stringent demands. “If you put that many poison pills on the table, it says to me that you wanted the result of that to be people leaving the table,” Mr. Volpe said. “When they don’t leave the table, you’ve got a major rethink.”
Robert Holleyman, a high-ranking trade official in the Obama administration, said Mr. Lighthizer seems to be serious about getting a deal, but it’s an open question whether he can find an agreement everyone – from Canada and Mexico to Mr. Trump – can get behind.
“How the United States squares its differences is difficult to see,” he said. “We are in a time of significant uncertainty and potential peril if we cannot find a way through.”

The Globe and Mail. 14 Nov 2017. Opinion. Canada needs to take a clear-eyed review on its NAFTA strategy
ANDREI SULZENKO

Former prime minister Stephen Harper was recently reported as being highly critical of the Trudeau government’s NAFTA stand. Whether such friendly fire is appropriate is, of course, debatable, but, as in most debates, truth does not reside entirely on one side.
The most salient point in Mr. Harper’s arguments is that Canada has made a tactical error in insisting, along with our Mexican counterparts, on negotiating trilaterally when the main U.S. preoccupation has been with its bilateral trade imbalance with Mexico. Rather than dismissing this view as tawdry political sniping, it should, at least privately, give the Canadian side pause for reflection in preparing for a return to the negotiating table in the coming days.
It is understandable why Mexico prefers three-way talks – to benefit from Canadian support in countering unacceptable U.S. demands while at the same time deflecting American attention toward a second punching bag.
It is less obvious why it is in Canada’s national interest to maintain solidarity with our Mexican partners on three-way negotiations.
One of the probable reasons is the long-standing Canadian tradition in international relations of taking a principled, high-road approach and being an honest broker. Cynics, on the other hand, see this more as a naive, Boy Scout approach, doing what is perceived to be the right thing rather than acting based on a clear-eyed realpolitik assessment. In this particular case, these cynics would say it is akin to bringing boxing gloves to a knife fight.
Another probable reason is institutional inertia. The North American free-trade agreement has been the trading framework for 25 years and it makes sense to try to modernize it incrementally rather than rethink the fundamental architecture of our trading relationships.
In hindsight, though, it has become increasingly clear that the Canadian and Mexican objective of improving NAFTA for mutual benefit is not shared by our U.S. counterparts. Their view can be most charitably summarized as NAFTA if necessary, but not necessarily NAFTA.
A more realistic take on the underlying American strategy would be one of forcing the breakup of NAFTA in order to jettison Mexico and subsequently set up a bilateral renegotiation with Canada on more favourable terms to the United States.
Indeed, the Trump administration is not the first to have a preference for bilateral deals rather than multiparty agreements. Successive administrations and their congressional counterparts have viewed unabashedly the greater leverage of bilateralism as being in the American national interest.
So, what is in Canada’s national interest, given the current impasse at the NAFTA table? To help answer that question, it is useful to recall why NAFTA was created in the first place.
Soon after completing the freetrade agreement with Canada in 1989, the United States sought out a bilateral agreement with Mexico, a willing partner that had also embarked on a series of bilateral trade agreements. Indeed, Canada was also engaged in a bilateral trade strategy, beating the United States to an agreement with Chile.
But a new U.S.-Mexico deal was different. It would have undercut Canada’s newly won preferential access to our most important market and, at the same time, impair access relative to the United States to the fast-growing Mexican market (necessitating our own bilateral agreement with Mexico to redress that situation). It made sense in these circumstances, albeit for defensive reasons, to promote a three-way negotiation under the optimistic branding of a North American trading bloc.
Having created NAFTA, the risk was always that since Mexico was at a different stage of economic development than the United States and Canada, its much lower wages and more relaxed regulatory structure would create politically unwelcome competitive pressures, particularly in manufacturing. As it turned out, except for the high-profile automotive sector, these competitive pressures fell disproportionately on the United States, contiguous to Mexico, and with its 12 times larger market, as compared with Canada.
Small wonder, then, that the American perspective on Mexico is quite different from Canada’s.
If a three-way relationship no longer works well (politically as compared to economically) for one of the partners, what is the point of the innocent party, Canada, standing in the way and potentially being roiled by the ensuing acrimony?
In these circumstances, it would make sense for Canada to take the initiative at the resumption of negotiations and propose the parsing of issues into three bilateral groupings: U.S.-Mexico; Canada-U.S.; and Canada-Mexico (the latter for the sake of symmetry rather than immediate importance).
Such an approach would not necessarily pre-empt an eventual three-way umbrella agreement, but it would provide a clearer path to the more likely successful negotiation of a new bilateral arrangement between Canada and the United States.
In this scenario, what about the U.S.-Mexico bilateral discussions? Each party will no doubt vigorously defend its interests. Canada should not get in the crossfire between them. That is not in our national interest.

THE GLOBE AND MAIL. NOVEMBER 14, 2017. U.S. owner of Churchill port, railway threatens NAFTA complaint
CHURCHILL GATEWAY DEVELOPMENT CORPORATION
ERIC ATKINS, RAILWAY INDUSTRY REPORTER

The U.S. owner of a port and railway in northern Manitoba says it has moved to file a claim against the Canadian government under the North American free-trade agreement, alleging Ottawa's actions made its investment a money loser.

Denver-based railway company OmniTrax says it bought the Hudson Bay Railway and Port of Churchill in 1997 with the expectation that grain shipments from the Canadian Wheat Board would continue. But the government's dismantling of the wheat board and its privatization in 2015 "pulled the rug out from under OmniTrax's investment" by diverting crop shipments to other railways, the company said in a notice of intent to seek arbitration filed on Tuesday.

The government's actions have devalued OmniTrax's investments and stymied its efforts to sell the railway and port, OmniTrax alleges in its claim.

"OmniTRAX would not have purchased the HBR or the Port of Churchill but for the expected continuation of the CWB business," OmniTrax says in its notice. OmniTrax says it is seeking a negotiated settlement that will repair the railway and port and transfer the ownership to the government or a third party. Failing that, OmniTrax says it will sue Ottawa for $150-million.

In a statement, OmniTrax Canada president Merv Tweed calls the action a "last resort" to "help facilitate an amicable resolution to the dispute."

"We remain open to the possibility of reaching an agreement with the federal government, should they demonstrate a willingness to come to the table and discuss a reasonable arrangement for repair and transfer of the HBR, Port of Churchill and related assets," says Mr. Tweed, a Conservative member of Parliament from 2004 to 2013, when he gave up his seat in the government of Stephen Harper to take the job with OmniTrax.

OmniTrax is relying on NAFTA's Chapter 11, intended to settle disputes between investors of a NAFTA country and government. OmniTrax's notice of intent is the first step in a complaint process that has been undertaken by such companies as United Parcel Service of America Corp. and Resolute Forest Products Inc.

Under NAFTA, a government is not allowed to discriminate against or treat a NAFTA-country investor less favourably than a domestic party.

Mr. Harper in 2012 ended the wheat board's monopoly on buying and selling Western wheat and barley for export to allow farmers to sell their crops in the open market. The wheat board was bought in 2015 by a partnership between Bunge of the United States and Saudi Arabia's state-owned Saudi Agricultural and Livestock Investment Co.

Renamed CWB, the former wheat board now moves crops through its own network of terminals and ports on British Columbia's coast and the Great Lakes-St. Lawrence Seaway. Other grain companies have also stepped into the market, buying and selling Western crops for export. Volumes sent on the HBR to Churchill plunged, a decline worsened by the loss of federal shipping subsidies, OmniTrax says.

"When OmniTrax acquired the HBR and the Port of Churchill, it was led by the government of Canada to expect that the railway would continue to carry historical levels of grain, as it had for the past several decades. This was to form the economic base for the viability of OmniTrax's investment, upon which OmniTrax could build by diversifying and expanding the range of goods that were transported through Churchill," OmniTrax said in its notice.

"By eliminating the [CWB's monopoly] and privatizing the CWB, the government of Canada set in motion a series of economic forces which, predictably and inevitably, wiped out the economic foundations on which the commercial viability of the HBR and the Port of Churchill rested."

OmniTrax bought the HBR from the recently privatized Canadian National Railway in 1997 for $11-million. At the same time, it took over the Port of Churchill from the federal government for $10. Ottawa contributed $28-million for dredging and other repairs. Other investments and subsidies made by Ottawa amounted to inducements for OmniTrax to keep spending on the system in the mistaken belief the government was committed to the shipment of grain through the route, the company says.

Since buying the port and railway, OmniTrax says it has invested more than $100-million but never made a profit.

Churchill is a deep-water port on Hudson Bay that can handle large ships and is favoured by shippers for its fast transit time to foreign markets. However, the port is iced in for much of the year and open only from July to October.

Climate change raises the possibility the port could become more viable. The same forces, however, render unstable and flood-prone the frozen muskeg over which much of the railway travels.

Sections of the railway, Churchill's only land link, were heavily damaged in a May flood and remain closed. Residents and businesses are relying on air shipments for all their needs.

"As the private owner of the line, OmniTRAX had the obligation to repair the rail line when it was damaged and it is irresponsible that they have not commenced repairs," said Melany Gauvin, a spokeswoman for transport minister Marc Garneau.

"Transport Canada sent OmniTrax Inc. a notice of default of its agreement demanding that it complete all railway repairs and resume rail service within 30 days, after which time the department will instruct Justice Canada to file a lawsuit for breach of contract. Transport Canada is preparing to move ahead with legal action as OmniTRAX Inc. has yet not informed the department of any repairs on the non-operational portion of its line that runs from Gillam to Churchill, Man."

Mr. Garneau is unavailable to comment on Tuesday, his office said.

Ottawa gave OmniTrax until Nov. 12 to repair the damage and restore train service to the town of 900 and has threatened legal action. Ottawa accuses OmniTrax of violating an agreement to repair and operate the line until 2029.

OmniTrax called Ottawa's threat "spurious" and says it was impossible to repair the damage in time.

THE GLOBE AND MAIL. NOVEMBER 13, 2017. OPINION. Canada needs to take a clear-eyed review on its NAFTA strategy
ANDREI SULZENKO, former trade negotiator and is currently an executive fellow at the School of Public Policy, University of Calgary

Former prime minister Stephen Harper was recently reported as being highly critical of the Trudeau government's NAFTA stand. Whether such friendly fire is appropriate is, of course, debatable, but, as in most debates, truth does not reside entirely on one side.

The most salient point in Mr. Harper's arguments is that Canada has made a tactical error in insisting, along with our Mexican counterparts, on negotiating trilaterally when the main U.S. preoccupation has been with its bilateral trade imbalance with Mexico. Rather than dismissing this view as tawdry political sniping, it should, at least privately, give the Canadian side pause for reflection in preparing for a return to the negotiating table in the coming days.

It is understandable why Mexico prefers three-way talks – to benefit from Canadian support in countering unacceptable U.S. demands while at the same time deflecting American attention toward a second punching bag.

It is less obvious why it is in Canada's national interest to maintain solidarity with our Mexican partners on three-way negotiations.

One of the probable reasons is the long-standing Canadian tradition in international relations of taking a principled, high-road approach and being an honest broker. Cynics, on the other hand, see this more as a naive, Boy Scout approach, doing what is perceived to be the right thing rather than acting based on a clear-eyed realpolitik assessment. In this particular case, these cynics would say it is akin to bringing boxing gloves to a knife fight.

Another probable reason is institutional inertia. The North American free-trade agreement has been the trading framework for 25 years and it makes sense to try to modernize it incrementally rather than rethink the fundamental architecture of our trading relationships.

In hindsight, though, it has become increasingly clear that the Canadian and Mexican objective of improving NAFTA for mutual benefit is not shared by our U.S. counterparts. Their view can be most charitably summarized as NAFTA if necessary, but not necessarily NAFTA.

A more realistic take on the underlying American strategy would be one of forcing the breakup of NAFTA in order to jettison Mexico and subsequently set up a bilateral renegotiation with Canada on more favourable terms to the United States.

Indeed, the Trump administration is not the first to have a preference for bilateral deals rather than multiparty agreements. Successive administrations and their congressional counterparts have viewed unabashedly the greater leverage of bilateralism as being in the American national interest.

So, what is in Canada's national interest, given the current impasse at the NAFTA table? To help answer that question, it is useful to recall why NAFTA was created in the first place.

Soon after completing the free-trade agreement with Canada in 1989, the United States sought out a bilateral agreement with Mexico, a willing partner that had also embarked on a series of bilateral trade agreements. Indeed, Canada was also engaged in a bilateral trade strategy, beating the United States to an agreement with Chile.

But a new U.S.-Mexico deal was different. It would have undercut Canada's newly won preferential access to our most important market and, at the same time, impair access relative to the United States to the fast-growing Mexican market (necessitating our own bilateral agreement with Mexico to redress that situation). It made sense in these circumstances, albeit for defensive reasons, to promote a three-way negotiation under the optimistic branding of a North American trading bloc.

Having created NAFTA, the risk was always that since Mexico was at a different stage of economic development than the United States and Canada, its much lower wages and more relaxed regulatory structure would create politically unwelcome competitive pressures, particularly in manufacturing. As it turned out, except for the high-profile automotive sector, these competitive pressures fell disproportionately on the United States, contiguous to Mexico, and with its 12 times larger market, as compared with Canada.

Small wonder, then, that the American perspective on Mexico is quite different from Canada's.

If a three-way relationship no longer works well (politically as compared to economically) for one of the partners, what is the point of the innocent party, Canada, standing in the way and potentially being roiled by the ensuing acrimony?

In these circumstances, it would make sense for Canada to take the initiative at the resumption of negotiations and propose the parsing of issues into three bilateral groupings: U.S.-Mexico; Canada-U.S.; and Canada-Mexico (the latter for the sake of symmetry rather than immediate importance).

Such an approach would not necessarily pre-empt an eventual three-way umbrella agreement, but it would provide a clearer path to the more likely successful negotiation of a new bilateral arrangement between Canada and the United States.

In this scenario, what about the U.S.-Mexico bilateral discussions? Each party will no doubt vigorously defend its interests. Canada should not get in the crossfire between them. That is not in our national interest.

REUTERS. NOVEMBER 14, 2017. Fifth NAFTA round reaches Mexico under shadow of U.S. tax reform
Dave Graham, David Lawder

MEXICO CITY/WASHINGTON (Reuters) - U.S., Canadian and Mexican negotiators hope to make modest progress in the next round of NAFTA trade talks as the White House focuses on pushing tax cuts through Congress, with little sign of compromise in sight on key sticking points.

A fifth round of negotiations to rework the North American Free Trade Agreement begins this week in Mexico City, weighed down by several contentious U.S. proposals that even some U.S. business leaders have labeled “poison pills” to the process.

From demands that the deal establish minimum U.S. limits in NAFTA auto content to scrapping a key dispute mechanism and adding an automatic expiry clause, the U.S. measures soured the mood in the previous round of talks in Virginia last month.

They have stirred fears that U.S. President Donald Trump could follow through on threats to dump NAFTA, creating a potential conflict with free trade proponents in the Republican Party whose support he wants for his planned tax cuts.

And with scant evidence that either side is prepared to give ground on the thorniest issues, narrowing differences on them this time is unlikely, Mexican and Canadian officials said.

“There’s been no movement on the tough stuff,” said Bosco de la Vega, head of Mexico’s National Agricultural Council (CNA), the main farming lobby, which is resisting another U.S. proposal that could restrict trade in seasonal foodstuffs.

However, there is still hope for progress on less divisive matters, officials said, pointing to signs of growing consensus on topics including telecommunications, e-commerce and small businesses, as well as some technical regulations.

Throughout, negotiators will be mindful of the debate in the U.S. Congress over the planned tax cuts, which have come under scrutiny for their potential impact on the federal deficit.

“All the political oxygen here has been absorbed by tax reform,” said Representative Frank Lucas of Oklahoma, a senior Republican on the House Agriculture Committee who is eager to keep NAFTA alive. “Everything is tax, 100 percent of the time.”

NAFTA working groups are due to begin meeting from Wednesday in Mexico to discuss issues ranging from textiles and services to labor and intellectual property. On Friday, talks will formally get underway through Nov. 21.

Should the U.S. side raise the so-called “poison pills,” Mexico and Canada do not intend to discuss them or propose compromises to dilute them, two officials from the countries said on condition of anonymity due to the sensitivity of the negotiations.

“We reject anything to do with national (auto) content,” said one Mexican official involved in the NAFTA discussions, calling the U.S. attitude to the process “short-sighted.”

U.S. business groups have spoken out against the national content proposal but many officials close to the talks believe that Trump is paying little heed to their concerns. That has fueled fears that whatever concessions Mexico and Canada might eventually make, it would “never be enough,” said one in Mexico.

Still, if Trump advances on the tax plan, it is more likely to help NAFTA talks than harm them, said the CNA’s de la Vega.

“What we know from our U.S. counterparts is that they’re saying, listen: we see that the future of (NAFTA talks) will depend on the success or failure of the tax reform. It will have a direct impact on NAFTA. How much? Who knows?” he said.

De la Vega estimated that roughly a fifth of the NAFTA negotiation was making progress, with the rest either mired in tricky details or proposals unacceptable to Mexico or Canada.

Additional reporting by David Ljunggren in Ottawa, Anthony Esposito and Adriana Barrera in Mexico City; Editing by Richard Chang

BLOOMBERG. 14 November 2017. Kill Nafta? It's Not as Easy as Trump Might Think
By Josh Wingrove

U.S. President Donald Trump repeatedly blasts the North American Free Trade Agreement and threatens to terminate the 1994 accord if talks to rewrite it don’t go his way. With the fifth round of negotiations set to resume on Nov. 15, Canada, Mexico and the U.S. remain deeply divided in five areas, including how to settle disputes and the amount of U.S. content in auto production. The terms of the Nafta treaty offer Trump an exit path, but considering the many complications involved, would he really pull the plug?

1. Could the U.S. simply quit Nafta?

Any country can leave on six months’ notice. Trump hasn’t given such notice, while Mexico and Canada have signaled they don’t plan to, either. Trump told The Economist in May that he considered doing so, only to relent after speaking with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto. Under Nafta’s rules, withdrawal notice is non-binding, meaning Trump could give it and decide not to withdraw after six months.

2. Could Trump leave on his own?

Not entirely. He’d need Congress to repeal Nafta’s enacting legislation. Whether lawmakers could drag their heels -- in effect, block Trump’s withdrawal without a vote -- is an "open question," says former U.S. Trade Representative Michael Froman. If a repeal bill came to the floor, there’s no guarantee it would pass. Kevin Brady, the chairman of the House Ways and Means Committee, which has jurisdiction over trade legislation, has said he wants the negotiations to succeed. But if Congress opposed withdrawal, "my sense is a lot could be done by executive action," Froman said at an Oct. 16 panel discussion in Washington.

3. What if Congress votes no?

No one knows what would happen because the U.S. has never terminated a free-trade agreement. But Trump would almost surely end up in court, said Mark Warner, a Toronto-based trade lawyer with MAAW Law who practices in the U.S. and Canada. “People are going to be in court the next day, asking for an injunction,” he said, and lawmakers could be among them. While the U.S. Constitution gives the president broad authority to negotiate treaties and conduct foreign policy, Congress shares responsibility with the executive over international trade, including ratification of trade deals and the imposition of duties. If Trump attempts to end Nafta over their heads, lawmakers could try to sue him in federal court on constitutional grounds.

4. What else would happen if Trump gave notice?

It would unleash a surge of lobbying. The U.S. Chamber of Commerce, for example, has pledged to “fight like hell” to save Nafta. Farm-state lawmakers, manufacturers and executives at multinational companies would also likely pressure Trump to step away from the ledge. And there’s the real possibility that it would cause negotiations to collapse. Mexico has signaled it would end talks if the U.S. gives withdrawal notice. The country’s July presidential vote would leave little room politically to back off that position.

5. And if the U.S. does leave?

U.S. law allows Trump to immediately restore tariffs to pre-Nafta levels, or he can wait 12 months, after which they automatically revert to World Trade Organization rules, says a 2016 Congressional Research Service report. In many cases, the rates would be only a few percentage points higher. Mexico charges an average of 7 percent on imports, followed by Canada’s 4.1 percent and the U.S.’s 3.5 percent. This means U.S. exports to Canada and Mexico would face the highest levies of the three. Some tariffs would skyrocket, though. U.S. dairy exports to Mexico, for instance, would see an average tariff of 21.6 percent. Canada could try to fall back on the suspended Canada-U.S. Free Trade Agreement, a Nafta predecessor, but it needs updating, so it wouldn’t be a quick fix. Canada and Mexico, meanwhile, would likely pivot commercially to other regions where they have deals.

6. What if they reach a deal?

If Trump stays at the table and reaches an agreement, he’ll still need to pass it at home. Froman, who negotiated the 12-nation Trans-Pacific Partnership that President Barack Obama concluded and Trump abandoned, said he sees little sign Trump can wrangle the votes in Congress for a new Nafta, especially if U.S. business groups are opposed. “Trade agreements are extraordinarily difficult to get through Congress,” Froman said.

7. What’s the rush?

U.S. Trade Promotion Authority, the so-called fast track for trade legislation that allows Congress to vote up or down on trade deals but doesn’t allow amendments, could expire as early as July 1, 2018. By that date -- the same day as Mexico’s presidential election -- Trump must ask Congress to extend TPA, a request that would be approved unless either chamber specifically votes to block it. With protectionist sentiment on the rise, it could be tough for Trump to get approval for a revamped Nafta without TPA. U.S. midterm elections in November 2018 also add urgency to the talks. While the three countries had been trying to get a deal by December, they’re now planning meetings through the end of March.

AVIATION

The Globe and Mail. 14 Nov 2017. EgyptAir in talks about C Series order

Canadian plane-and-train-maker Bombardier Inc. is in advanced talks with EgyptAir over a potential $1.1-billion order for C Series jets, Bloomberg reported, citing people familiar with the matter.
The deal is likely to include a firm order for 12 CS300 jets, and could be announced as early as Tuesday at the Dubai Air Show, according to the report.
European plane maker Airbus SE recently agreed to take a majority stake in the C Series program, in exchange for Airbus’ purchasing and marketing power and support for the aircraft that had few orders due to doubts over its future.

REUTERS. NOVEMBER 14, 2017. EgyptAir signs $1.1 billion deal for 12 Bombardier CSeries jets
Alexander Cornwell, Allison Lampert

DUBAI/MONTREAL (Reuters) - State-owned EgyptAir on Tuesday signed an initial order for 12 Bombardier CSeries jets, marking the Canadian plane maker’s second deal for its largest planes this month - agreements that end an 18-month drought of no sales of the aircraft.

The two orders, the other for 31 aircraft from an undisclosed European buyer, are expected to be finalized by the end of 2017, a senior Bombardier executive said.

The two agreements, which total 43 firm CSeries orders, are expected to generate momentum for the narrowbody jets and follow an October decision by Airbus SE to take a majority stake in the plane program.

“We anticipate both of them by year end,” Commercial Aircraft President Fred Cromer told reporters. “That will take our firm order book to over 400 airplanes.” Cromer said both sales had already being under negotiation and were not the result of the Airbus venture.

EgyptAir Chairman Safwat Moslem told a Dubai Airshow news conference on Tuesday the CS300 aircraft, which seat 130 passengers, would be used by the airline’s domestic and regional carrier EgyptAir Express.[L8N1NK4Y0] The deal is valued at $1.1 billion based on list prices.

In Dubai, Ethiopian Airlines’ chief executive said he would decide next year whether to buy CSeries or Brazil-based Embraer’s E-jet series as a replacement for its Boeing’s 737-7.

“We are respecting the customer’s wishes to not disclose the identity,” Cromer said from Dubai.

Colin Bole, Bombardier’s senior vice president of commercial aircraft, said there were no particular conditions or terms that needed to be met to finalize the deals.

Bombardier’s deal with EgyptAir follows signed agreements with Iraqi Airways, Bahrain’s Gulf Air, among other Middle East regional carriers.

Bole said, “I think it’s a great template and it’s something that will be followed extremely closely by the other carriers in the region,” he said.

The EgyptAir LOI also includes purchasing options for a further 12 CSeries that, if exercised, would increase the total value of the deal to nearly $2.2 billion.

Bombardier is engaged in a trade dispute with Boeing, which complained that the CSeries had been subsidized and sold below cost in the United States. A U.S. trade commission will decide in early 2018 on whether to impose duties of nearly 300 percent on the planes as urged by the U.S. Commerce Department.

Reporting by Alexander Cornwell in DUBAI and Allison Lampert in Montreal; Editing by Mark Potter and Steve Orlofsky

THE GLOBE AND MAIL. BLOOMBERG. NOVEMBER 14, 2017. BOMBARDIER. Bombardier lands second C Series deal since Airbus backs jet
BENJAMIN KATZ, ANURAG KOTOKY AND FREDERIC TOMESCO

Bombardier Inc. is closing in on the second deal for its C Series jet since reaching a landmark agreement with Airbus SE a few weeks ago that will see the European plane maker take control of the program to help revive the plane's fortunes.

EgyptAir Airlines Co. plans to buy 12 of Bombardier's CS300, the biggest variant of the narrow-body jet, and has options for a further 12, the carrier said Tuesday at the Dubai Air Show. The deal is valued at $1.4– billion (Canadian) before discounts.

The accord is a significant win for Bombardier, which gains another customer for its new jet less than a month after the company agreed to cede control of the C Series to Airbus in exchange for the European plane maker's marketing heft, manufacturing expertise and financial muscle. The aircraft had been plagued by delays and cost overruns, and recently was hit with 300 per cent tariffs in the U.S. after a trade complaint by Boeing Co.

Bombardier expects to turn EgyptAir's letter of intent into a firm order by the end of 2017, commercial aircraft chief Fred Cromer told reporters on a conference call Tuesday from Dubai. The agreement makes good on the company's expectations that the Airbus deal will bolster confidence in the program and accelerate sales.

Earlier this month, Montreal-based Bombardier said an unidentified European customer was planning to buy 31 C Series aircraft with options for 30 more. That's a distinct turnaround, as prior to the deal Bombardier hadn't sealed a major purchase since Delta Air Lines Inc. ordered 75 planes in April 2016.

The CS300 carries a list price of $89.5-million (U.S.), although discounts of 50 per cent or more are common in the industry. The jet, the larger of two C Series versions, can carry 130 to 160 passengers.

Airbus has vowed to cut the aircraft's production costs and secure thousands of new orders for the plane, which Bombardier spent more than $6-billion to develop. The C Series was two-and-a-half years late and more than $2-billion over budget when it entered service at Deutsche Lufthansa AG's Swiss unit in July 2016. Swiss and Air Baltic Corp., which began flying the CS300 in December, have reported better-than-expected fuel efficiency, which is key to the jet's appeal.

EgyptAir is separately expected to unveil a deal for at least six Boeing 787 Dreamliners, the first passenger jets made from lightweight carbon-fiber composites, said people familiar with the discussions. Airbus has also been in talks to secure a commitment from the carrier, the people said.

The shopping spree, following months of negotiations, marks an expansion push for Egypt's flag carrier after it weathered slumping tourist visits and a fatal crash last year. Egypt Civil Aviation Minister Sherif Fathy said last month that the government expected to pay about $3.3-billion of the cost to acquire 45 planes.

BLOOMBERG. 14 November 2017. Bombardier Lands Second C Series Win After Airbus Backs Jet
By Benjamin D Katz , Anurag Kotoky , and Frederic Tomesco

EgyptAir intends to buy 12 CS300 jets with options for 12 more
Carrier mulls additional orders in Egypt’s aviation recovery

Bombardier Inc. is closing in on the second deal for its C Series jet since reaching a landmark agreement with Airbus SE a few weeks ago that will see the European planemaker take control of the program to help revive the plane’s fortunes.

EgyptAir Airlines Co. plans to buy 12 of Bombardier’s CS300, the biggest variant of the narrow-body jet, and has options for a further 12, the carrier said Tuesday at the Dubai Air Show. The deal is valued at $1.1 billion before discounts.

The accord is a significant win for Bombardier, which gains another customer for its new jet less than a month after the company agreed to cede control of the C Series to Airbus in exchange for the European planemaker’s marketing heft, manufacturing expertise and financial muscle. The aircraft had been plagued by delays and cost overruns, and recently was hit with 300 percent tariffs in the U.S. after a trade complaint by Boeing Co.

Bombardier expects to turn EgyptAir’s letter of intent into a firm order by the end of 2017, commercial aircraft chief Fred Cromer told reporters on a conference call Tuesday from Dubai. The agreement makes good on the company’s expectations that the Airbus deal will bolster confidence in the program and accelerate sales. Shares rose 2.3 percent to C$3.13 at 10:02 a.m. in Toronto.

Earlier this month, Montreal-based Bombardier said an unidentified European customer was planning to buy 31 C Series aircraft with options for 30 more. That’s a distinct turnaround, as prior to the deal Bombardier hadn’t sealed a major purchase since Delta Air Lines Inc. ordered 75 planes in April 2016.

The CS300 carries a list price of $89.5 million, although discounts of 50 percent or more are common in the industry. The jet, the larger of two C Series versions, can carry 130 to 160 passengers.

Airbus has vowed to cut the aircraft’s production costs and secure thousands of new orders for the plane, which Bombardier spent more than $6 billion to develop. The C Series was two-and-a-half years late and more than $2 billion over budget when it entered service at Deutsche Lufthansa AG’s Swiss unit in July 2016. Swiss and Air Baltic Corp., which began flying the CS300 in December, have reported better-than-expected fuel efficiency, which is key to the jet’s appeal.

EgyptAir is separately expected to unveil a deal for at least six Boeing 787 Dreamliners, the first passenger jets made from lightweight carbon-fiber composites, said people familiar with the discussions. Airbus has also been in talks to secure a commitment from the carrier, the people said.

The shopping spree, following months of negotiations, marks an expansion push for Egypt’s flag carrier after it weathered slumping tourist visits and a fatal crash last year. Egypt Civil Aviation Minister Sherif Fathy said last month that the government expected to pay about $3.3 billion of the cost to acquire 45 planes.

GOVERNMENT

PM. November 14, 2017. Prime Minister launches Canada.ca/Results Ottawa, Ontario

The Government of Canada is committed to being the most open and accessible government possible. In keeping with this commitment, the Prime Minister, Justin Trudeau, today announced the launch of Canada.ca/Results.

This new website reports publicly on the progress we have made to deliver real and meaningful results for Canadians. It also gives Canadians a sense of the results they should expect to see and how we intend to make change real.

Using Canada.ca/Results, Canadians will be able to track progress for each of the mandate letter commitments and top government-wide priorities, such as fighting climate change, advancing reconciliation with Indigenous Peoples, growing our economy, and strengthening the middle class.

Over the past two years, we have taken significant strides to fulfill our mandate. This progress would not be possible without the hard work and dedication of public servants, who make a real difference in Canadians’ lives every day.

Today’s launch is only the first step – we will continue to improve Canada.ca/Results to enhance its functionality, and we intend to update the website often as commitments progress.

Quote

“We’re working hard every day to grow the middle class and deliver real, meaningful results for people across the country. Canadians should have the best tools possible to hold us accountable. That is what Canada.ca/Results is all about. We want Canadians to know exactly how we’re doing, and help drive progress on issues that matter most to them.”

—The Rt. Hon. Justin Trudeau, Prime Minister of Canada

Quick Facts

In November 2015, the Prime Minister took the unprecedented step of publicly releasing all ministerial mandate letters, as part of his plan for open and transparent government for Canadians.
Mandate letters provide Ministers with the Prime Minister’s expectations of approach and priorities. They are not intended to be an exhaustive list of all the files a Minister needs to work on.

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November 14, 2017