CANADA ECONOMICS

NAFTA

Global Affairs Canada. March 5, 2018. Address by the Minister of Foreign Affairs at Round Seven of Negotiations on the Modernization of the North American Free Trade Agreement (NAFTA). Speech

Mexico City - Check against delivery. This speech has been translated in accordance with the Government of Canada’s official languages policy and edited for posting and distribution in accordance with its communications policy.

Good day. I’m happy to be in Mexico once again to meet with my counterparts as we continue our work to modernize and improve the North America Free Trade Agreement.

Thank you, Secretary Guajardo, for hosting us so graciously, as you always do.

I would note that since we lifted the visa requirement between Canada and Mexico, tourism has grown significantly. In fact, as of September, there has been a 52 percent increase in visitors from Mexico to Canada, including students and tourists. These are welcome numbers, and demonstrate the strength and importance of the Canada-Mexico relationship, and indeed of the entire North American community.

Ambassador Lighthizer, it’s good to see you again to continue our discussions on how we can make NAFTA better for workers in all three of our countries.

I would like to again offer Canada’s condolences to the American people in the aftermath of the Parkland, Florida, tragedy. Canadians have the parents, families and friends of all of the victims and all Americans in our hearts at this difficult time.

To begin, I’d like to thank our negotiators who are working so hard to update and improve our trading relationship in a way that is win-win-win. You are an extraordinary group of professionals and we are all very grateful for your efforts.

From the outset of these talks last August, Canada’s approach has been to propose ideas and solutions that will benefit businesses and workers in all three of our countries. Canada remains completely committed to this goal.

In these negotiations we have been constructive, fair-minded and determined to reach not just any deal, but a good deal. That very much remains our approach.

NAFTA has been in place for 24 years. And the economic results are not in doubt. We know this agreement has created jobs, supported growth, and raised living standards for people in Canada, the United States and Mexico.

Having said that, this agreement is 24 years old. It needs to be modernized. It needs to reflect that technology, business and society have evolved. And it needs to be updated to broaden the benefits of trade to more people.

President Trump has said his most important goal is to help American workers and to help the American middle class. We in Canada have exactly the same goal for our workers and our middle class. This can and should be a shared project.

That’s because trade is not a zero-sum game. In trade, we can all win. And we need to all win, in order to reach an agreement that will benefit all our people.

This negotiation will be successful if together we can make North America more competitive in the world and create more jobs, including manufacturing jobs, in North America.

North American competitiveness is essential to our economic prosperity, and to our ability to compete globally.

In this seventh round here in Mexico City, we’ve made solid progress.

Our negotiators have been toiling away on some of these bread-and-butter chapters for months, without a lot of fanfare. Yet, these issues are hugely important to businesses and individuals who work across our borders. And we are moving ahead.

In previous rounds, we closed chapters on competition, small and medium-sized enterprises, and anti-corruption. Here in Mexico City, we added substantially to that by closing the good regulatory practices chapter, the publication and administration chapter, the sanitary and phytosanitary chapter, the chemicals annex, and the proprietary food formulas annex.

And we’re beginning to make headway on some of the more challenging issues.

At round six in Montreal, Canada offered creative ideas to initiate a discussion about these areas.

That discussion has been constructive. And it continued here in Mexico City.

We are making progress – but we have significant work ahead.

Let me pause for a moment on a separate point.

Last week, I issued a statement about the U.S. government’s pending announcement on steel and aluminum imports. What I said then remains Canada’s view.

As a key NORAD and NATO ally, and as the number one customer of American steel, Canada would view any trade restrictions on Canadian steel and aluminum as absolutely unacceptable.

We will always stand up for Canadian workers and Canadian businesses. Should restrictions be imposed on Canadian steel and aluminum products, Canada will take appropriate responsive measures to defend its trade interests and workers.

We will continue to stand up for our steel and aluminum workers and industry.

To conclude, we know that trade between Canada, and the United States and Mexico is good for all three of our countries. Today, the three of us have a historic opportunity – to improve and modernize NAFTA, to bring more jobs and growth to North America, and to make North America more competitive in the world.

We do have a lot of work ahead. Canada is committed to the success of this negotiation.

And I look forward to continuing our work in Washington, D.C., in round eight.

Thank you.

The Globe and Mail. 6 Mar 2018. Trump waves threat of steel tariffs over NAFTA talks. While U.S. President says levies will be imposed until a ‘fair’ trade deal is reached, Mexico and Canada insist the two discussions must be kept separate
ADRIAN MORROW, MEXICO CITY

U.S. President Donald Trump is threatening to hit Canada and Mexico with hefty tariffs on steel and aluminum until the two countries agree to a renegotiated NAFTA, rolling two looming trade battles into a single protectionist attack.

Canada and Mexico are pushing back, insisting the two fights must not be linked and keeping up a fullcourt press to stop Mr. Trump’s tariffs. Prime Minister Justin Trudeau tried to warn Mr. Trump off tariffs, telling him in telephone call on Monday that levies would make it harder to strike a deal.

Canada and Mexico have powerful allies in the United States, with senior Republican politicians demanding that he change his mind and mulling passing a law to stop him.

The three sides on Monday concluded the seventh round of North American free-trade agreement talks with a deal far off.

While negotiators made progress on a handful of uncontroversial matters, sources with knowledge of the talks said deadlocks remained on the Trump administration’s toughest demands.

The President’s point-man on the file, Robert Lighthizer, warned that “time is running very short” and that Mr. Trump’s ultimatum was an “incentive” for the other countries to accept a deal.

Mr. Trump delivered his ultimatum on Twitter shortly after dawn Monday.

“We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed,” the President tweeted. Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo, however, said steel and aluminum tariffs would not be negotiated as part of NAFTA. Speaking with reporters at the Mexican economy ministry building at the end of the NAFTA round in Mexico City, Ms. Freeland said the two matters “are quite separate.”

And she dismissed Mr. Trump’s tweet.

“I was going to make some kind of joke about how all of us should take a break from social media,” Ms. Freeland said. “But I think I’ll refrain from that.”

Ms. Freeland said Canada would retaliate if the United States imposed tariffs, but would not say what form that retaliation would take.

Mr. Trump surprised aides and industry alike by announcing the tariffs – 25 per cent on steel and 10 per cent on aluminum – last week. So far, the White House has not provided specific details on how they will work, and Mr. Trump’s aides are fighting over whether to apply them to U.S. allies such as Canada.

Tying the tariffs to NAFTA cranks up the pressure in already tense negotiations. Canada is the largest supplier of both steel and aluminum to the United States, as well as the United States’ largest export market for the metals.

Canada and Mexico have been fighting a series of protectionist U.S. demands at the NAFTA table. The Trump administration wants to slap a 50-per-cent U.S. content requirement on all vehicles made in Canada and Mexico, severely restrict Canadian and Mexican companies from bidding on U.S. government contracts and abolish or gut all of NAFTA’s disputeresolution mechanisms.

People with knowledge of the confidential negotiations said there had been little progress made in this round on these sticking points. None of the countries is budging on procurement, and the auto talks had to be suspended so the U.S. negotiator on the file could attend a consultation with industry in Washington. A separate auto negotiating session is expected to take place in Washington this month.

Negotiators instead pushed forward with less controversial matters, such as telecommunications, energy and food safety standards. Mr. Lighthizer, the U.S. Trade Representative, warned that, with a Mexican presidential election on July 1 and congressional elections in November, the three countries must get a deal.

“I fear that the longer we proceed, the more political headwinds we will feel,” he said at a joint appearance with Ms. Freeland and Mr. Guajardo, after trilateral meetings Monday.

At a subsequent scrum with reporters, Mr. Lighthizer praised Mr. Trump’s ultimatum on tariffs: “I presented it as a positive thing. It is my view that it’s an incentive to get a deal.” Canada is lobbying across the Trump administration for an exemption to the tariffs. Ms. Freeland spoke with Commerce Secretary Wilbur Ross, who will be in charge of administering the levy, on Friday. And on Monday, Mr. Trudeau pressed Mr. Trump personally. In summary of their call, the Prime Minister’s Office said Mr. Trudeau expressed “serious concern” about the tariffs. “He emphasized that the introduction of tariffs would not be helpful to reaching a deal on NAFTA,” it said.

The Trudeau government has numerous likely allies within Mr. Trump’s own administration on its side: Those opposed to tariffs or believed to be open to Canada’s request for an exemption include Defence Secretary James Mattis, National Security Adviser H.R. McMaster, Treasury Secretary Steve Mnuchin, economic adviser Gary Cohn and Jared Kushner, Mr. Trump’s son-in-law. Economic nationalists Mr. Ross, Mr. Lighthizer and trade adviser Peter Navarro are the forces pushing Mr. Trump to go hard on tariffs.

Canada is getting an assist from the U.S. Congress. Speaker Paul Ryan has spoken directly with Mr. Trump to urge him to back off tariffs entirely, and the two top Republicans on the trade file in the House of Representatives – Kevin Brady and Dave Reichert – are also writing the President asking him to reconsider.

“We are extremely worried about the consequences of a trade war and are urging the White House not to advance with this plan,” Mr. Ryan’s office said in a statement.

Christopher Sands, director of the Center for Canadian Studies at Johns Hopkins University, said the deteriorating relationship between Canada and the United States has to do in part with how Ottawa has handled Mr. Trump’s protectionist moves.

The Trump administration had expected Canada to be onside with its attempts at bringing auto jobs back from Mexico; instead, Canadian negotiators lectured the Americans on why their nationalistic demands were wrong. Then, Ottawa filed a massive case against U.S. trade law at the World Trade Organization, seeking to overturn decades of U.S. attempts at keeping out foreign imports.

“That shifted talk in the Trump administration about making Canada pay a price,” Mr. Sands wrote in an e-mail, adding that the current climate is “very bad for Canada and likely to get worse if Canada does not change its approach.”

The Globe and Mail. 6 Mar 2018. Why the U.S. is likely to be the biggest victim. The odds of U.S. President Donald Trump backtracking on his proposed tariffs on steel and aluminum imports hinge on their effectiveness as a bargaining tool.
IAN McGUGAN, Columnist

I believe these tariffs on their own will push inflation higher, and higher inflation is a threat to the valuations of more or less all financial assets today.

BEN INKER, HEAD OF THE ASSET ALLOCATION TEAM AT GMO LLC

Donald Trump has picked up a loaded revolver. What he doesn’t appear to realize is that he’s aiming it at his own head.

The tariffs he is threatening to impose against imported steel and aluminum are likely to cause just as much pain for U.S. companies, U.S. workers and U.S. investors as the international trading partners that Mr. Trump thinks he’s targeting.

For now, the U.S. President seems to be ignoring this irony.

But even the famously fact-shy Mr. Trump can’t escape it forever.

From a U.S. perspective, the most immediate and obvious issue with the President’s proposed tariffs is that they would result in higher prices for the key industrial metals needed by U.S. manufacturers. In effect, Mr. Trump’s hissy fit on trade would help about 140,000 Americans employed in steel mills, while hurting the roughly 6.5 million Americans who work in steel-consuming industries.

That’s not a great trade-off.

Higher prices for steel and aluminum within the United States could also set off a wider reaction in financial markets by raising the cost of U.S. consumer goods and stoking inflation. The Federal Reserve would then have to respond by raising interest rates, which would hurt both U.S. stocks and bonds.

“I believe these tariffs on their own will push inflation higher, and higher inflation is a threat to the valuations of more or less all financial assets today,” said Ben Inker, who is head of the asset allocation team at money manager GMO LLC in Boston.

Of course, the biggest danger of all is the spectre of international retaliation. Europe and China, as well as Canada, would almost certainly respond with their own tariffs on some U.S.-made goods if Mr. Trump forges ahead with his levies. As a result, U.S. exporters would face new headwinds to selling their products internationally and many U.S. companies would be forced to re-engineer global supply chains they have spent years building. At the very least, they would face pervasive uncertainty about where to locate their operations.

No wonder, then, that many experts are appalled by Mr. Trump’s pledge to get tough on trade. “This is just straight up stupid,” Adam

Posen of the Peterson Institute for International Economics in Washington told

CNBC. For his part, Mr. Inker warned that a global trade war could lead to an inflationary outburst that would knock up to 40 per cent off the value of a typical investment portfolio.

So what are the odds of Mr. Trump backtracking on his ill-conceived notion? That probably hinges on how effective the threat of tariffs proves to be as a negotiating tool.

The Trump trade strategy is all about being the biggest bully on the block, Mr. Posen notes, and the U.S. President is already using the threat of tariffs as a cudgel. On Monday, for instance, Mr. Trump warned there would be no break for Canada on the proposed levies unless it agreed to a revised North American free-trade agreement that would be “fair” to U.S. interests.

The problem with this tough-as-nails strategy from a U.S. perspective is it may be met with a shrug in many of the places that Mr. Trump most wants to target.

China, for instance, is the country that runs the largest trade surplus, by far, with the United States, but it’s unlikely to be severely inconvenienced by the proposed tariffs. Rather than trying to expand its metals production, it’s actually closing down many of its creakier steel and aluminum factories as part of a blue-skies policy designed to create cleaner air.

Europe, too, isn’t going to feel much pain. Transatlantic trade in metals is very small, according to Capital Economics, which calculates that exports of “basic metals” to the United States account for less than 0.1 per cent of the euro zone economy.

If many of his negotiating partners refuse to be intimidated by his bluster, Mr. Trump is going to be left in an awkward place. He would then have to choose between backing down or going ahead with tariffs that are likely to be just as inconvenient for the United States as for the rest of the world.

For now, stock markets appear to be counting on him coming to his senses. Let’s hope they’re right.

The Globe and Mail. 6 Mar 2018. Big-dog trade talk could come back to bite the U.S.
CAMPBELL CLARK, Columnist

OTTAWA - Amonth ago, a Wisconsin member of Congress named Ron Kind came out of a briefing with U.S. Trade Representative Robert Lighthizer and said he was taken aback.

Mr. Lighthizer, the man in charge of U.S. trade negotiations, including NAFTA talks, was “inordinately fixed” on the relative size of the U.S. economy compared with others, Mr. Kind said: “Since we’re the biggest dog on the block, everyone should just succumb to all our wishes.”

This is the essence of the Trump administration trade policy, as we now see it in action: The United States has the larger economy, so it will get what it wants.

That was the essence of a Donald Trump tweet on Monday. The President made a clear threat: The steep U.S. tariffs on steel and aluminum will apply to Canada (and Mexico) unless the latter two make concessions to wrap up talks on the North American freetrade agreement.

Now we know the bottom line of this trade strategy: I’m bigger, so give me your lunch money.

Canada-U.S. relations have always had a hint of that size mismatch, but it was softened by neighbourly feeling. Mr. Trump made U.S. leverage an explicit part of his global trade policy, but it primarily named China and Mexico. Now it is an explicit part of U.S. trade relations with Canada, in the form of a naked threat.

And Mr. Trump is right: The United States can hurt Canada’s economy. It’s just that Mr. Trump is still likely to hurt the U.S. economy in the process.

It is interesting that Mr. Trump’s trade rhetoric was once heavily focused on China, but he has not yet followed through on the aggressive trade measures he proposed. It’s as if he has realized the United States is not that much bigger than China. Those steel tariffs hit countries such as Canada and Britain instead.

Mr. Trump’s trade policy is supposed to be aimed at undoing U.S. trade deficits, so that explained why he aimed his rhetoric at China and Mexico, with whom the United States has large trade deficits. But now the U.S. President is tweeting that his country not only has a trade deficit with Canada, but it is a large one – although that is false.

It’s hard to know if Mr. Trump actually believes that, but there can be no doubt that Mr. Lighthizer, who regularly makes the same claim, knows better. Numbers posted on his own website made it clear the United States has a trade surplus with Canada. He’s a veteran trade lawyer, a pro in the field. Why make stuff up? It does not do much other than add some fake justification for squeezing the smaller guy.

There’s no point whining about that. Mr. Trump promised “America First,” and this is what it means. He thinks of trade as a zero-sum game – if you export more, and import less, you win! He also frames the issue in emotional terms of American humiliation. Foreign countries “laugh at us,” he tweeted. He promises to shut them up.

Trade economics tells us that, in theory, a larger country can reap benefits from imposing a tariff on a product from a smaller country. The harm to the smaller country is greater than the benefit to the bigger country – but if the bigger country doesn’t care, then no problem.

But obviously there is a problem if the smaller country happens to be your biggest export customer. When Canada’s economy suffers, so do U.S. exports to this country. The economic harm to Canada would be greater, but the United States would be hurt too. And in the meantime, U.S. manufacturers will have to pay more for steel and aluminum. That makes Mr. Trump’s Canada threat a less-than-zero-sum game.

Of course, it could be a Trumpian tactic in NAFTA talks – although the problem is that no viable NAFTA deal is on the table right now. And inside the United States, powerful interests, including Republican leaders, are trying to get Mr. Trump to pull back.

If not, Canada must sort out what to do when the bigger guy threatens – as will other countries. They usually feel they have to respond, even if it hurts them, to stop it from happening again.

That’s what happened in 1930, when the U.S. Congress passed the protectionist Smoot-Hawley Act; Canada and countries around the world retaliated. Trade slowed. That is widely seen as contributing to the Great Depression. That is the danger when the big dog decides to use its power by threatening a trade war – it makes everyone else feel they have to fight a war of attrition.

The Globe and Mail. 6 Mar 2018. EDITORIAL. Fighting a war the only way we can win

Donald Trump has once again set the world on edge, this time with his threat to impose global tariffs on steel and aluminum imports. The U.S. President has also rattled his allies and trading partners by seeming to welcome the prospect of any economic hostilities that come as a result of his actions.

“Trade wars are good, and easy to win,” he tweeted last week.

That’s nuts. Trade wars are incredibly bad and there are no winners. But if Mr. Trump wants a trade war and is willing to fire the first shots, the question for his trading partners is, Do they fire back?

It’s tempting. Why not give him the war he wants and let him learn the lessons it would bring. Canada has a particular interest in playing tough. The U.S. is the biggest buyer of our steel products. This county will suffer if the President’s proposed 25-per-cent tariff on steel is applied here.

But we also happen to be the world’s biggest buyer of U.S. steel. Overall, the U.S. sells 50 per cent of its exported steel to Canada and has a $2-billion trade surplus with us, according to Global Affairs Canada. A retaliatory measure, which Ottawa has already threatened to impose, would hurt American manufacturers badly.

But where would that lead? Mr. Trump has already vowed to retaliate against any retaliation, and he is irresponsible enough to do it. On Saturday, he warned the European Union that, if it imposed counter-measures, the U.S. would “apply a Tax on their Cars.”

And down we go into the trenches of an endless and chaotic tit-for-tat war.

As frustrating as it might be in the face of Mr. Trump’s bluster and provocations, it is far better for Canada to wait and respond rationally, without descending into a trade war against a far bigger adversary.

Ottawa is already on that wiser course. Government officials have been on the phone and in meetings to push hard for exemptions to the tariffs. That could well work, for the very good reason that Mr. Trump cannot make a strong case for his measures.

The President intends to unilaterally impose the tariffs on the grounds that protecting the steel industry is an issue of national security, allowing him to do an end run around Congress. “If you don’t have steel, you don’t have a country,” Mr. Trump tweeted last week.

Few are buying that argument. Steel prices have long been depressed by a huge surplus capacity on the international market. Every country is struggling with this issue, but none has seen the need to impose what are known as “safeguard” tariffs to protect national security.

Mr. Trump remains defiant on Twitter, but it’s not like he has thought this through. The message coming from the White House seemed to change hour to hour on Monday: no exemptions; maybe a few exemptions. That indecision will only increase, thanks to fierce opposition to the tariffs from senior Republicans and others who fear that a jump in the price of steel will result in the loss of hundreds of thousands of jobs in America’s manufacturing sector.

So there is reason to hope that the U.S. political process will water down Mr. Trump’s tariffs. But if that doesn’t work, Canada and other countries can still take their case to the World Trade Organization, which is where Mr. Trump will have to go to impose his tariffs legally.

That takes time, but there is reason to believe that Mr. Trump’s case will fall apart under scrutiny, and that his tariffs don’t meet the specific standards that allow a president to act unilaterally.

For instance, his assertion that the tariffs are needed as an emergency measure has already been contradicted by his statement that he won’t apply them to Canada and Mexico if they sign a new free-trade deal that is to his tastes. Is there an emergency, or isn’t there?

With so much opposition to the tariffs in the U.S. and internationally, and with so little forethought to buttress them, Canada should avoid firing a retaliatory shot and getting drawn into Mr. Trump’s mindless trade war.

We are better off relying on mechanisms like the WTO that were invented to prevent bigger countries from riding herd over their smaller trading partners. Just like an eye for an eye leaves the whole world blind, a tariff for a tariff leaves the whole world poorer.

THE GLOBE AND MAIL. REUTERS. MARCH 6, 2018. Trade tension could wreck private-equity party: industry group
JEFFREY JONES

CALGARY - Mounting trade tension and corporate tax-rate disparity with the United States threaten to crimp a boom in private-equity deal-making in Canada, the head of the industry's umbrella group says.

A strong Canadian economy attracted record amounts of private capital in 2017, with the biggest deals in financial technology, security services and gold mining, the Canadian Venture Capital and Private Equity Association (CVCA) said in its annual market overview.

However, the increasingly troubled trade relationship with the United States is fraying investor nerves, said Mike Woollatt, chief executive officer of the association.

Trade friction intensified on Monday when U.S. President Donald Trump threatened to hit Canada and Mexico with hefty tariffs on steel and aluminum until the two countries agree to a renegotiated North American free-trade agreement.

"What happens to NAFTA is something that the private equity industry writ large is watching very closely," Mr. Woollatt said in an interview. That is especially a worry for investors in industrials, manufacturers and consumer retail companies that have large proportions of customers in the United States.

Secondly, the CVCA has heard from members that the recent cut in U.S. corporate taxes under the Trump administration has raised questions about Canada's ability to compete for capital, he said.

As a result, some mid-market private equity firms "are more in sell mode" in a global environment in which more than $1-trillion of capital from private-equity firms and pension funds is in the hunt for assets, Mr. Woollatt said.

Last year, investor confidence shone bright, which played out in record private-equity deal flow. According to CVCA, $26.3-billion in private capital was invested in an unprecedented 603 separate deals. The dollar value was almost double the total in 2016.

The largest deals included the $4.8-billion privatization of financial tech player DH Corp. by Vista Equity Partners; $2.2-billion acquisition of Garda World Security Corp. by Apax Partners LLP and Rhone Group LLC; and $1.1-billion funding for Osisko Gold Royalties Ltd. from Caisse de dépôt et placement du Québec and Fonds de solitarité FTQ.

Activity was also brisk in the small- to mid-market segments with deal value between $25-million and $100-million – 66 transactions with a total value of $3.9-billion. Canada is well known in the private capital world for opportunities in such segments, market players say.

One big change in recent years has been a pullback in private equity from Canadian oil and gas deals as the downturn in crude prices and a shortage of export pipeline capacity made it difficult to exit investments.

"It's a bit of a sea change. What used to drive a lot of the growth was oil and gas, in both activity and dollars," Mr. Woollatt said. "What we're seeing now is the industrial and manufacturing driving activity. And information and computer technology [ICT] is a big player in the private equity side now."

In 2017, there were 117 deals in industrial and manufacturing, 98 in ICT and 78 in consumer and retail, the report showed.

Exits of investments included six initial public offerings, 134 merger and acquisition deals and eight secondary buyouts. All are increases from 2016.

Venture capital has also picked up steam. VC investment increased by 11 per cent in 2017, totalling $3.5-billion in 592 transactions, the association said. The average deal size was nearly $6-million, unchanged from last year.

Quebec tech firms dominated fundraising for early and late-stage capital. Lightspeed POS Inc. raised $207-million, Element AI Inc. $141-million and Leddartech Inc. $128-million.

"On the venture side, we're having a tech and a health-and-life-science moment in terms of innovation, and it's driving growth," Mr. Woollat said.

THE GLOBE AND MAIL. REUTERS. MARCH 6, 2018. Mexico says NAFTA must remain a trilateral accord
GABRIEL STARGARDTER AND VERONICA GOMEZ

MEXICO CITY - Mexico's Economy Minister Ildefonso Guajardo on Tuesday rejected making a bilateral trade treaty with the United States, saying the North American Free Trade Agreement, which is currently being renegotiated, must remain a three-country accord.

On Monday, U.S. Trade Representative Robert Lighthizer said time to rework the deal was running "very short" and again raised the possibility of the United States pursuing bilateral deals with its partners, while stressing that Washington would prefer a three-way agreement.

NAFTA "has to be a trilateral accord, given the conditions of integration in North America," Guajardo said in an interview with the Televisa network on Tuesday. "It must be that way."

Lighthizer said on Monday that Mexico's presidential election and the looming expiry of a congressional negotiating authorization in July puts the onus on the United States, Mexico and Canada to come up with a plan soon.

The latest round of talks have been clouded, however, by U.S. President Donald Trump's plans to launch metals tariffs. On Monday, Trump tweeted that "tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed."

Guajardo said on Tuesday that if the U.S. government were to push ahead with metals tariffs that included Mexico, the country would be forced to respond with politically targeted tit-for-tat responses.

"There's a list (of U.S. products) that we are analyzing internally, but we won't make it public, we're going to wait," Guajardo said.

He also said that in a meeting in Washington last week, in which he met Commerce Secretary Wilbur Ross, he told the U.S. official that Mexico should not be included in the proposed tariffs.

"We're allies in national security ... our industries are highly integrated, we buy more (U.S.) steel than we sell, and so there's no point in shooting oneself in the foot," he said,

REUTERS. MARCH 6, 2018. Pushback on Trump tariffs gathers steam, Mexico rejects bid to split NAFTA
Susan Cornwell, Veronica Gomez

WASHINGTON/MEXICO CITY (Reuters) - Republican lawmakers stepped up calls for President Donald Trump to pull back from proposed tariffs on steel and aluminum imports as key trading partner Mexico rejected a bid by Washington to drive a wedge between it and Canada in talks to renegotiate the North American Free Trade Agreement.

Few details have emerged from the White House over the scope and timing of Trump’s tariffs - 25 percent on steel imports and 10 percent on aluminum - after a surprise announcement by the president last week.

Financial markets have rallied off their lows on expectations the measures may be watered down in the face of an intense lobbying effort from leading Republicans, although so far Trump has stuck to his guns in public.

On Tuesday, Representative Mark Meadows, the head of the Freedom Caucus, a staunchly conservative Republican grouping in Congress, raised concerns about the impact of the tariffs on American manufacturing and agriculture. Agriculture is a potential target for retaliatory tariffs from China if Trump pushes ahead.

Meadows, who spoke to reporters after a closed-door meeting with House Republicans, said he had heard little support for the tariffs. “Most of the conversation I heard was not in support of that particular decision.”

Those comments came after sharp criticism of the tariffs from House Speaker Paul Ryan and Representative Mark Walker who both on Monday issued statements critical of the proposals. Walker heads the Republican Study Committee, which has about 150 members, a majority of the party’s lawmakers in the House.

Legislators and industry groups opposed to the duties have warned that the proposed tariffs would cause more damage to American companies and workers than they would help. They also note that the move would hit key allies such as Canada hardest, rather than having a direct impact on global dumping of steel and aluminum by China.

“We fear that the proposed tariff may do more harm than good, hurting rather than helping the 97 percent of aluminum industry jobs in mid-and-downstream production processes,” the Aluminum Association said in a statement on Tuesday.

Members of the administration have repeatedly said that the cost of the tariffs will be minimal for American consumers. Commerce Secretary Wilbur Ross said they would add less than $200 to the cost of a car, for example.

Opponents have fought back, saying that consumers would end up paying more for a wide range of goods from cars, to canned beer and canned soup.

MEXICO FIRES BACK

Washington on Monday said that if Canada and Mexico agreed to their demands in the NAFTA talks, they could be exempted from the proposed steel and aluminum tariffs. The trilateral talks have gone on for six months with few signs of progress.

Mexico’s Economy Minister Ildefonso Guajardo raised the prospect of reprisals if Washington pushed ahead with tariffs and insisted NAFTA remain “a trilateral accord” in response to a U.S. proposal to hold talks with Canada and Mexico separately.

“There’s a list (of U.S. products) that we are analyzing internally, but we won’t make it public, we’re going to wait,” Guajardo told the Televisa network in an interview.

Canada has also said it would take counter-measures over the steel and aluminum tariffs, without specifying what it would do. The European Union has identified industries it would target, including Harley Davidson motorbikes, which are made in Wisconsin, Paul Ryan’s state.

Despite the pressure, Trump and the administration have stood firm in public comments. They say that exemptions for specific countries to the tariffs would only allow China - whose huge plant expansions have driven a global glut of steel and aluminum - to skirt the duties by exporting through third countries.

Trump has vowed to cut America’s trade deficit and accuses countries like China of cheating. He has launched an investigation into intellectual property abuses by China, a move that could dwarf any impact of the steel and aluminum proposals and trigger a sharp response from Beijing.

Fred Bergstein, who has held top economics posts in a series of U.S. administrations and is a senior fellow at the Peterson Institute for International Economics thinktank, warned on Tuesday that the proposed tariffs would undermine Washington’s efforts to rein in China by alienating potential allies.

“President Trump’s recent trade actions, especially the announced plans to impose tariffs on steel and aluminum, will have little effect on China. In fact, they will make confronting China with an alliance of trading partners much harder,” he said.

Additional reporting by Jason Lange, Lisa Lambert and Richard Cowan; Writing by David Chance; Editing by Susan Thomas

CPTPP AND MERCOSUR-CANADA

Global Affairs Canada. March 6, 2018. Teleconferenced media availability and technical briefing on signing of Comprehensive and Progressive Agreement for Trans-Pacific Partnership

The Honourable François-Philippe Champagne, Minister of International Trade, on March 8, 2018  will hold a media availability from Santiago, Chile, about the official signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Immediately afterward, Bruce Christie, Canada’s chief trade negotiator for the CPTPP, will hold a technical briefing.

Global Affairs Canada. March 6, 2018. Minister Champagne to travel to Chile and Paraguay to help create jobs for Canada’s middle class by expanding access to international markets

Ottawa, Ontario - Increased trade and investment opens new markets for Canadian goods and services, creating long-term growth and an economy that works for the middle class. Diversifying trade with important and fast-growing markets, such as those found in the dynamic Asia-Pacific and Latin American regions, is a priority for job creation for hard-working Canadians.

Today, the Honourable François-Philippe Champagne, Minister of International Trade, announced that he will travel to Santiago, Chile, from March 7 to 8, 2018, to sign the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The Minister will then continue on to Asunción, Paraguay, on March 9.

The official signing of the CPTPP will take place on March 8 with all 11 member countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam), which together will form one of the largest trading blocs in the world, representing 13% of global GDP. Deepening Canada’s economic relationship with the Asia-Pacific region through the CPTPP will create unparalleled access for more Canadian goods and services and more good jobs for the middle class.

With the CPTPP, Canadian workers, producers, farmers, entrepreneurs and businesses will add another half a billion consumers for the quality products and services Canada can provide. More Canadians engaged in trade in new markets creates real and diversified opportunities to sell abroad and good middle-class jobs at home.

In Asunción, Minister Champagne will meet with his counterparts from Argentina, Brazil, Paraguay and Uruguay—the Mercosur trade bloc countries—to build on the recent positive conclusions of exploratory talks. A comprehensive free trade agreement with Mercosur countries would provide Canada with yet another market and 260 million more buyers for the quality products that Canadians produce.

While in both Chile and Paraguay, Minister Champagne will also engage with civil society—including women and labour unions—to underscore the merits of Canada’s progressive approach to trade and that they are also critical to our economic success.

Quotes

“Canada is seizing every opportunity to secure new markets on better terms for more Canadians and is quickly becoming a country with unparalleled access to the world’s most dynamic markets. That is good for jobs and for every Canadian’s longer-term prosperity.”

- François-Philippe Champagne, Minister of International Trade

Quick facts

• The CPTPP will be one of the largest trading blocs in the world, with 11 member countries. CPTPP countries represent 495 million people and have a combined GDP of $13.5 trillion.
• In 2016, Canada’s bilateral merchandise trade with the 10 other CPTPP countries amounted to $105 billion.
• The South American trade bloc Mercosur is a customs union established by Argentina, Brazil, Paraguay and Uruguay in 1991.
• With 260 million consumers and a GDP of over $3 trillion, Mercosur is the world’s fourth-largest trading bloc.

See Also:

• Comprehensive and Progressive Agreement for Trans-Pacific Partnership: https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cptpp-ptpgp/index.aspx?lang=eng
• CPTPP - Frequently asked questions: http://international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cptpp-ptpgp/faq.aspx?lang=eng
• Text of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership: http://international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cptpp-ptpgp/text-texte/index.aspx?lang=eng
• Economic impact of Canada’s participation in the CPTPP: http://international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cptpp-ptpgp/impact-repercussions.aspx?lang=eng
• Backgrounder - Canada and Mercosur: https://www.canada.ca/en/global-affairs/news/2018/02/canada-and-mercosur.html
• Canada-Mercosur Free Trade Agreement: https://international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/mercosur/index.aspx?lang=eng

INTERNATIONAL TRADE

The Globe and Mail. REUTERS. 6 Mar 2018. U.S. trade panel backs anti-dumping, subsidy probe into pipe imports
ERIC WALSH

WASHINGTON - The U.S. International Trade Commission on Monday voted to continue anti-dumping and subsidy investigations into imports of large-diameter welded pipe from Canada, China, Greece, India, South Korea and Turkey, it said in a statement.

The U.S. Commerce Department said last month it was examining whether manufacturers from those countries are selling the pipe in the United States at below-market rates or are being unfairly subsidized by their governments.

The trade case comes amidst global trade jitters after U.S. President Donald Trump said last week he would impose broad tariffs on imports of steel and aluminum to protect U.S. national security under a Cold War-era trade law, a move that could raise consumer prices and ignite a trade war. Imports of the welded steel pipe, used to build oil-and-gas pipelines, in 2016 totalled US$441.4-million from the six countries, department data show.

The probe was launched in response to a petition from a group of privately held U.S. producers and covers welded carbon and alloy steel pipe larger than 406.4 millimetres in diameter.

The commission’s decision means the government will begin collecting cash deposits from companies importing the pipe, which can be used to transport oil, gas, slurry, steam or other fluids, liquids or gases. The investigation is one of roughly 100 the Trump administration has opened since taking office, which it says are aimed at protecting U.S. manufacturers in global markets.

The Commerce Department estimated that, in 2016, imports of large-diameter welded pipe from Canada had a value of US$66-million, China US$139-million, India US$26-million, Greece US$70-million, South Korea US$150.3-million and Turkey US$116.1-million.

REUTERS. MARCH 6, 2018. U.S. sees national security risk from Broadcom's Qualcomm deal
Chris Sanders

(Reuters) - A U.S. government national security panel said it identified potential risks that warrant a full investigation of Singapore-based Broadcom Ltd’s (AVGO.O) $117 billion bid for chipmaker Qualcomm Inc (QCOM.O), a senior U.S. Treasury official said in a letter to the companies on Monday.

Shares of Qualcomm dipped 3.3 percent on growing investor concern that such government scrutiny, unusual for a deal that has not yet been agreed, would scupper any type of merger.

Some of the U.S. government’s concerns relate to risks associated with Broadcom’s relationships with foreign entities, Aimen Mir, the Treasury’s deputy assistant secretary for investment security, said in the letter, without identifying who those parties might be.

The letter, dated March 5, was made public by Qualcomm on Tuesday. (bit.ly/2FtCesY)

The U.S. government’s Committee on Foreign Investment in the United States (CFIUS) ordered a national security review of Broadcom’s proposed deal on Sunday in an unusual move that prompted Qualcomm to delay a March 6 shareholder meeting.

The letter said that, as with every investigation, the review will consider the potential risk of an unnamed “actor” working through Broadcom to hurt U.S. national security, adding that the bulk of CFIUS’ concerns were classified.

CFIUS, made up of representatives from the Departments of Defense, State, Justice, Treasury, Commerce, Energy and Homeland Security, assesses proposed foreign deals to purchase U.S. assets to ensure they do not harm national security.

The inter-agency body, led by the Treasury, rarely looks at mergers before companies have clinched an agreement, highlighting the urgency of U.S. concerns about safeguarding semiconductor technology.

The review of the Broadcom deal illustrates the U.S. government’s expanding focus on the competitiveness of the national semiconductor industry as China advances, regulatory experts said.

Broadcom Ltd
250.9048
AVGO.ONASDAQ
+3.92(+1.59%)
AVGO.O

AVGO.OQCOM.O

The U.S. government is concerned that Chinese companies, including the big network equipment and mobile phone maker Huawei Technologies [HWT.UL], will take advantage of any openings to take the lead in the next generation mobile phone networks known as 5G.

“A shift to Chinese dominance in 5G would have substantial negative security consequences for the United States,” Mir’s letter said.

A source familiar with CFIUS’ thinking told Reuters on Monday that if Broadcom acquired Qualcomm, the U.S. military had concerns that within 10 years “there would essentially be a dominant player in all of these technologies and that’s essentially Huawei.”

Huawei has been forging closer commercial ties with big telecom operators across Europe and Asia, putting the company in prime position to lead the global race for 5G networks despite U.S. concerns.

Its has a dominant position in China, which is set to become the world’s biggest 5G market by far, but has also made inroads in the rest of world to compete with rivals such as Ericsson and Nokia in several lucrative markets, including countries that are longstanding U.S. allies.

Reporting by Supantha Mukherjee in Bengaluru and Chris Sanders in Washington D.C.; Editing by Bill Rigby

REUTERS. MARCH 5, 2018. Trump faces pushback on tariffs but says he will not back down
Susan Cornwell, Ayesha Rascoe

WASHINGTON (Reuters) - U.S. President Donald Trump faced growing pressure on Monday from political and diplomatic allies as well as U.S. companies urging him to pull back from proposed steel and aluminum tariffs, although he said he would stick to his guns.

Inside the White House, there still appeared to be confusion about the timing and extent of the planned tariffs, which would hit allies like Canada and Mexico hard.

Efforts by Trump and U.S. trade negotiators to link the NAFTA trade pact talks to the duties received short shrift from Ottawa and Mexico City.

Leading Republicans turned up the pressure on Trump, with House of Representatives Speaker Paul Ryan leading the charge. Ryan’s home state of Wisconsin would be hit by proposed European counter-measures on Harley-Davidson Inc motorbikes.

Representative Kevin Brady, another top House Republican, called on Trump not to hit America’s closest allies.

Business leaders are pressing for a meeting with Trump to brief him on the negative repercussions of the tariffs on companies that use steel and aluminum, a source familiar with the matter said.

A meeting had not yet been set up, the source said. The White House had no comment.

The planned tariffs have roiled world stock markets as investors worried about the prospect of an escalating trade war that would derail global economic growth. Stocks across the globe rose on Monday, however, after four days in decline as investors saw the tariff threats as a U.S. negotiating tactic and not a done deal and as pressure grew on Trump to back off.

“We’re not backing down,” Trump said during a White House meeting with Israeli Prime Minister Benjamin Netanyahu. “I don’t think you’re going to have a trade war,” he added, without elaborating.

Canadian Prime Minister Justin Trudeau called Trump on Monday to tell him the tariffs would be an impediment to talks on updating NAFTA, a Canadian government official said.

Canada is the single largest supplier of steel and aluminum to the United States. In the call, Trudeau “forcefully defended” Canadian workers and industries, said the official, describing the conversation as constructive.

Earlier comments from Trump had stoked talk of a global trade war as he described them as easy to win and issued a threat to German carmakers. One of those, BMW, runs a plant in the United States that is the largest single autos exporter in the country and has created thousands of jobs.

Most responses to Trump’s proposed tariffs have been targeted. The European Union said it would hit Harleys, bourbon and jeans, iconic American products. It did not threaten to ramp up the issue.

China has been largely mum, urging caution, and both Canada and Mexico have stressed the targeted nature of any response.

STRESSES INSIDE THE WHITE HOUSE?

Trump was expected to finalize the planned tariffs later in the week, although some observers familiar with the process said it could occur next week. The initial announcement by Trump last week came as a surprise.

The United States, Mexico and Canada have been holding talks over changes to the North American Free Trade Agreement, a pact that Trump has threatened to abandon.

Six months of tense talks have produced little in the way of progress and a move by Washington to link the steel and aluminum tariffs to progress on NAFTA was rebuffed by Canada and Mexico.

U.S. Trade Representative Robert Lighthizer also attempted to drive a wedge between Canada and Mexico when he suggested the United States would be willing to hold bilateral, rather than trilateral talks. The two countries again stood firm.

In Washington, aides scrambled to meet Trump’s demand for the paperwork to be completed for a formal announcement. The exact timing was unclear as the tariff documentation had to be drafted and go through a variety of reviews, a process that takes days, an administration official said.

There was always a chance that Trump “could amend his initial announcement” to take account of the concerns expressed about it, said a source familiar with the internal debate at the White House.

TRUMP’S TRADE TRAIL

Trump has frequently talked tough on trade, although his actions have not always matched his words. On his first day in office in January 2017, he withdrew from the 14-nation Trans Pacific Partnership agreement, a deal that was dead on arrival in the U.S. Congress in any case.

He has frequently tweeted and said that he would pull out of NAFTA, which he has called a jobs killer. But a year after taking office, the 1994 deal remains intact.

Trump has approved a series of small-scale trade actions, of which the steel and aluminum duties would be a part. Taken together with actions on washing machines and solar panels, the proposed move accounts for just 4.1 percent of U.S. imports. In terms of global trade, they are just 0.6 percent, investment bank Morgan Stanley said in a report.

The head of the World Trade Organization warned of a real risk of triggering an escalation of global trade barriers and a deep recession, even as financial markets and many economists started to discount the risk of a global crisis.

“We must make every effort to avoid the fall of the first dominoes. There is still time,” WTO Director General Roberto Azevedo told the heads of WTO delegations at a closed-door meeting in Geneva.

Additional reporting by Susan Heavey, Steve Holland, Eric Walsh and Susan Heavey in Washington, Adriana Barrera, Sharay Angulo, Lesley Wroughton and David Ljunggren in Mexico City, Rodrigo Campos in New York and Tom Miles in Geneva; Writing by Frances Kerry and David Chance; Editing by Andrea Ricci and Peter Cooney

BLOOMBERG. 6 March 2018. Mnuchin Tries to Douse Trade-War Fears Over Trump Tariff Threats. Treasury Secretary Steven Mnuchin says the U.S. does not want a trade war.
By Saleha Mohsin, Jennifer Jacobs and Anna Edgerton

• Cohn, GOP lawmakers make last-ditch bid to halt penalties
• EU vows counter-strike on politically sensitive U.S. products

Treasury Secretary Steven Mnuchin and Republican congressional leaders tried to tamp down fears of a global trade war as President Donald Trump came under pressure from his own party to stop or at least curtail steep tariffs on steel and aluminum announced last week.

“We are not looking to get into trade wars,” Mnuchin said Tuesday during a congressional committee hearing when asked about the tariffs, adding that he is “supportive” of imposing the broad duties Trump announced.

But Republican lawmakers are pressuring Trump to at least limit the reach of the tariffs. One of Trump’s closest Senate allies, David Perdue, suggested on Tuesday that the president may be open to changes on how the levies might be applied, sending U.S. stocks rising with the S&P 500 Index up 0.2 percent at 3:14 p.m in New York.

“There is a lot of concern among Republican senators that this could metastasize into a broader trade war,” Senate Majority Leader Mitch McConnell, a Kentucky Republican, told reporters. Asked if White House is listening, he replied, “I think they are.”

The president also is facing push-back within his administration. White House economic adviser Gary Cohn is summoning executives from U.S. companies that depend on the metals to meet this week with Trump to make the case that the tariffs will cost more jobs than they save and damage the U.S. economy, according to two people familiar with the plan. Trump has told advisers he believes the former Goldman Sachs Group Inc. executive will leave the administration if he imposes the tariffs, said people familiar with the matter.

Republicans in Congress are undertaking an unusual public campaign to thwart broad tariffs of 25 percent on imported steel and 10 percent on aluminum. House Speaker Paul Ryan on Tuesday urged the president to “be more surgical” in penalizing trade abuses to prevent “any kind of unintended consequences or collateral damage.”

Senator Orrin Hatch, the Utah Republican who is chairman of the Finance Committee, released a letter he was sending to Trump expressing his “deep concerns” and warning that the tariffs would undermine the economic benefits of the tax cuts the president signed into law in December.

The threat of retaliation and escalating tit-for-tat penalties damaging growth around the world is already rising. The European Union warned it would respond with its own 25 percent tariff to hit $3.5 billion of U.S. goods. The EU is targeting iconic U.S. brands produced in key Republican states on a range of consumer, agricultural and steel products that will be levied if Trump goes through on his tariff threat, according to a list drawn up by the European Commission.

Trump vowed on Monday to stand fast, telling reporters, “We’re not backing down.” After announcing the steel and aluminum tariffs, the president tweeted on Friday,“trade wars are good, and easy to win.”

The split in the Republican ranks on trade is coming to a head as the party struggles to hold a previously safe House seat in a special election in steel country. Trump plans to visit the area on Saturday, a few days before the vote in southwestern Pennsylvania, where a recent poll shows a Democrat slightly ahead in a district Trump carried by 20 percentage points in 2016.

Tariff supporters are pressing Trump to announce the measures during his visit to mobilize GOP voters, but Cohn is pushing back with the meeting of executives to make the case that trade sanctions will damage the economy and hurt the president’s own re-election campaign in 2020. The White House session with Trump later this week will include representatives of breweries, beverage-can manufacturers and automakers, along with the oil industry, said the people, who spoke on condition of anonymity to discuss a policy disagreement.

Advisers ‘Come & Go’

It’s unclear whether Cohn’s campaign or the threat of losing his top economic adviser will be enough to change the president’s mind. Trump said in a tweet Tuesday there may be more staff turnover, even as he denied his administration is chaotic.

"People will always come & go, and I want strong dialogue before making a final decision,” Trump said in a Twitter posting. “I still have some people that I want to change (always seeking perfection). There is no Chaos, only great Energy!"

The tariffs could reduce U.S. growth by as much as 0.2 percentage point this year, and further risk lies in how trading partners respond, Barclays Plc economists said. While a tight job market and tax cuts are likely to keep America’s expansion humming along, the trade tensions could weigh on growth and boost inflation more than desired by Fed policy makers.

Mnuchin told a House Appropriations subcommittee that Canada, the U.S.’s biggest supplier of steel, could gain relief from the tariffs along with Mexico if they can reach an agreement with Trump on renegotiating Nafta. The tariffs won’t apply to the U.S. neighbors if a new trade deal is concluded, he said.

He added that the Nafta renegotiation is an administration “priority,” along with shifting trade with China to a “fair and balanced” relationship.

Congressional Response

Senate Democratic leader Chuck Schumer said the White House needs to adjust any tariffs to address trade imbalances with China, rather than allies like Canada and the EU.

“I believe that the president’s instincts to go after China are the right thing to do,” Schumer said. But the initial announcement on tariffs was “not well targeted.”

Republican Senator Cory Gardner of Colorado said many Republican lawmakers oppose the tariffs and he has “no doubt Congress would be forced to act” to end them if Trump proceeds.

"There is a series of legislative actions that could be taken to reverse the decision, obviously with the president supporting them they would have to be done in a way that would overcome any action that he would take, but we still have time,” Gardner said.

However Republican Senator Jeff Flake said he doesn’t think enough Republicans would cross the president by passing legislation to reverse the tariffs, even as he called the measure “completely, utterly irrational.”

Ways and Means Committee Chairman Kevin Brady of Texas and other House Republicans are seeking to blunt the tariffs’ impact by adding an “exclusion process” allowing American companies to petition for duty-free access for imports that aren’t available from U.S. sources.

The lawmakers want existing contracts for aluminum and steel to be exempted from tariffs. They also called for a review of the effects of tariffs on the economy “to determine if a different approach would better serve the interests of our American workers, job creators, and consumers.”

“Done right the president could impact trade positively,” Brady told reporters Tuesday. “We want to help him tailor it.”

If Trump follows through with the tariffs he proposed, the Senate Finance Committee should consider holding hearings, said John Cornyn of Texas, the No. 2 Republican in the chamber.

“The part that concerns me the most is the potential for retaliatory tariffs and a so-called trade war and other areas that would affect some of the more vulnerable sectors of our economy, like agriculture,” Cornyn said.

— With assistance by Margaret Talev, Steven T. Dennis, Justin Sink, Sahil Kapur, Erik Wasson, and Laura Litvan

BLOOMBERG. 6 March 2018. Will tariffs spur Cohn’s exit? Trump Believes Cohn Will Leave If Tariffs Instituted, Sources Say. Republicans Push Back Against Trump Tariff Plan
By  Jannifer Jacobs and Margaret Talev

• President says turnover, debate are part of governing strategy
• Economic adviser Cohn has mounted effort to thwart tariffs

President Donald Trump has told advisers that he believes economic adviser Gary Cohn will leave his White House job if Trump decides to go forward with tariffs on imported steel and aluminum, people familiar with the matter say.

Cohn has mounted a last-ditch effort, along with other administration officials and some Republican lawmakers, to head off steep tariffs that threaten to unleash a global trade war.

Cohn has been summoning executives from U.S. companies that depend on the metals to meet this week with Trump to try to blunt or halt the tariffs, according to those familiar with the meeting planning. It’s unclear whether Cohn’s moves would be enough to change the president’s mind.

Trump said in a tweet Tuesday there may be more staff turnover, even as he denied his administration is chaotic.

"People will always come & go, and I want strong dialogue before making a final decision,” Trump said in a Twitter posting. “I still have some people that I want to change (always seeking perfection). There is no Chaos, only great Energy!"

Turnover has been a constant of Trump’s administration. In the most-recent case, Communications Director Hope Hicks announced that she will resign last week after she testified before the House Intelligence Committee. Hicks was the fourth person to hold that position since Trump took office in January 2017.

She follows several other top aides to depart this year, including former Staff Secretary Rob Porter, who left the White House following reports that two ex-wives accused him of domestic violence. Chief of Staff John Kelly also made the decision to strip more than 30 aides, including Trump’s son-in-law Jared Kushner, of top secret clearances.

Cohn has served as director of the National Economic Council since the beginning of the Trump administration. Previously, he served as president and chief operations officer for Goldman Sachs Group Inc. since 2006. An investment banker by profession, Cohn has become one of the more influential voices in the Trump administration.

— With assistance by Terrence Dopp



BLOOMBERG. 6 March 2018. The Latest: Will Trump Tariffs Help Steel in America’s Rust Belt. Will Trump Tariffs Help Steel in America’s Rust Belt? Trump Vows to Forge Ahead on Tariffs
By Joe Deaux, Thomas Biesheuvel and Steven Frank

President Donald Trump has been known to change policy positions on the fly. But throughout an often volatile political career, he’s held fast to the notion that Chinese policies have unduly wiped out U.S. jobs, often citing the steel industry as Exhibit A. His administration says cheap steel imports constitute a threat to national security and the U.S. needs to build a trade wall. Despite enraged responses from around the world, Trump seems determined to proceed with an across-the-board 25 percent tariff on steel.

1. Does the U.S. steel industry need protection?

U.S. steelmakers say their plants have been ravaged by global overproduction, particularly by China, and that’s depressed prices and created an urgent need for remedies. But Andrew Cosgrove, a senior analyst for Bloomberg Intelligence, notes that the U.S. steel industry has had positive free cash flow in 14 of the past 19 years. While some companies with aging or less-efficient plants — such as U.S. Steel Corp. and AK Steel Holding Corp. — have struggled, others are profitable. Nucor Corp. has had negative free cash flow only once in the past 20 years.

2. How much has the U.S. industry shrunk?

It went through a difficult reorganization in the late 20th century as the pace of U.S. industrialization slowed and emerging markets, particularly in East Asia, began their meteoric rise. In the 21st century, U.S. steel jobs have continued to disappear, partly because older plants are being replaced by more efficient ones. While the Commerce Department says employment declined 35 percent from 1998 to 2016, U.S. steel production capacity has been largely unchanged since 2001. Some struggling U.S. factories have been purchased and reorganized by global steelmakers such as Luxembourg-based ArcelorMittal and Brazil’s Gerdau SA.

3. Why does the U.S. import so much steel?

Check the price tags. In some countries, steelmakers have enough economic advantages that, even after adding shipping costs, their steel products are cheaper than ones made in the U.S. About 30 percent of America’s steel comes from abroad, with Canada as the biggest supplier. Despite China’s reputation as world bogeyman, its exports to all countries have slumped dramatically since 2015, and Chinese steel was just 2.5 percent of all U.S. steel imports in January in terms of volume.

4. Are other countries subsidizing their steel?

The U.S. government says both direct and indirect foreign steel subsidies have eroded U.S. businesses, and it sees offenders everywhere. As of January, the Commerce Department had 164 antidumping and countervailing duty determinations in effect for steel, and another 20 were under investigation. No country gets more blame than China, which alone can produce as much steel as the rest of the world combined. China has countered that its subsidies adhere to World Trade Organization rules and the growing overcapacity in steel markets is a global problem that must be solved in a collaborative effort.

5. Are there other reasons U.S. steel has trouble competing?

U.S. wages are higher than in emerging markets like China, and legacy pension plans weigh on the balance sheets of some integrated steel mills. U.S. power costs also are generally higher, whereas many Chinese mills get cheaper energy contracts, part of the rationale for the argument that Chinese steel is subsidized. The Americans also have to face stiffer environmental regulations than the Chinese, though that gap is narrowing thanks to a recent crackdown by the Chinese government.

6. Can U.S. companies meet total domestic demand?

No — at least not in the near term. If the U.S. cut its exports, it could boost its steel mill utilization of 74 percent last year to 80 percent and reduce its import needs to under 20 percent from 30 percent now, according to ING Groep NV. But U.S. companies may not be willing to expand capacity, as that would require them to commit a lot of capital with no guarantee that the tariffs would be permanent.

7. But tariffs could mean more jobs, right?

Nucor CEO John Ferriola said March 1 after meeting with Trump that the tariffs would allow his company to increase investment at a more rapid rate, which could mean more U.S. jobs. But even if more production was shifted to the U.S. over time, the reality is that the industry has been rapidly embracing automation in recent years and modern steel plants are unlikely to be the mass employers they once were. Austrian producer Voestalpine AG cautioned last year that the industry would eventually lose most classic blue-collar jobs.

8. What’s likely to happen?

A backlash from U.S. manufacturers and other countries — and a global stock selloff a day after Trump’s March 1 comments that he would add tariffs of 25 percent on imported steel and 10 percent on aluminum — underscored concerns over the economic impact of the moves. Despite discord in the White House and Congress over whether to exempt any products or countries, it’s likely the president will follow through with a formal tariff announcement soon. Then the open questions will be whether any potential benefits will be outweighed by supply-chain disruptions, trade retaliation, new headaches for negotiators at the North American Free Trade Agreement talks, and a battle royale at the WTO.

The Reference Shelf

• The cases for saving U.S. steel and aluminum, from the Alliance for American Manufacturing, a partnership between manufacturers and the United Steelworkers union.
• Bloomberg News articles on Trump’s claim that a trade war would be “easy to win” and how the tariffs now hang over Nafta talks.
• In Bloomberg View, Stephen Mihm traced how the U.S. lost its steel superiority and Justin Fox looks at what tariffs might mean for jobs.
• Bloomberg QuickTakes on how steel became a national security issue, Trump’s “Buy America” initiative, and free trade and its foes.

— With assistance by Joseph Richter

ENERGY

The Globe and Mail. 6 Mar 2018. IEA forecasts U.S. shale’s domination. Paris-based agency predicts output surge will lead global crude growth through 2023. Canadian producers should be able to increase their output over the next half-decade, assuming completion of new pipelines projects, such as Enbridge’s Line 3.
SHAWN McCARTHY

Booming American shale-oil supply will dominate global crude growth over the next few years, but there will be room for increased Canadian exports into the United States as producers there target export markets, the International Energy Agency (IEA) said on Monday.

In its annual outlook for world oil markets, the Paris-based agency forecast the United States, Canada and Norway will account for virtually all global supply growth over the next five years, and warns of a long-term supply crunch unless investment increases to satisfy growing demand.

“Upstream investment may be inadequate to avoid a significant squeeze of the global spare capacity cushion by 2023,” it said in a report released on Monday.

While Calgary-based producers worry about a lack of investment in Western Canada, they are not alone. The IEA said that, after three years of declining or flat investment, there will be little growth in global capital expenditures this year. The modest increase will be concentrated in the U.S. shale fields, where technological advances have driven down the cost of production.

Around the world there has been a paucity of spending on exploration and development. Discoveries of new oil resources fell to a record low in 2017, with less than four billion barrels of crude, condensate and natural gas liquids (NGLs) confirmed, the IEA said.

Industry sentiment is indeed improving along with rising prices, but major oil companies are reluctant to invest vastly higher sums.

Instead, they are retaining their focus on costs, efficiency improvement and return on capital.

However, U.S. production from known shale-oil reserves is soaring. Over the next five years, the United States is expected to add 3.7 million barrels a day of liquids productions, which includes crude, condensates and NGLs. That would take U.S. liquids output to a total of 17 million barrels a day. Still, Canadian producers should be able to increase shipments to U.S. refineries, assuming completion of new pipeline projects such as TransCanada Corp.’s Keystone XL and Enbridge Inc.’s Line 3. That’s because U.S. refineries are geared to process medium and heavy grades and crude, while the shale fields produce light oil.

“As Canadian shipments to the U.S. grow, this frees up lighter U.S. crude for export, particularly to meet Asian demand for petrochemical feedstock,” the IEA said.

Consultancy Wood Mackenzie said U.S. crude producers are targeting the export market, particularly in Europe where they are competing with East African production. It expects U.S. crude product to exceed 11 million barrels a day by 2023, a figure that does not include NGLs and condensates.

“With limited additional demand for these volumes in the domestic refining system, future U.S. production will need to clear into export markets,” Wood Mackenzie’s chief economist Ed Rawle said in a release on Monday.

In 2016, just 32 per cent of crude processed by U.S. refiners were light grades. “Without largescale capital investment, the U.S. domestic market can only absorb about a quarter of the additional four million b/d of U.S. crude expected to enter markets [by] 2023, leaving the rest for exports,” Wood Mackenzie said.

AVIATION

The Globe and Mail. 6 Mar 2018. Buoyed by trade, manufacturing wins, Bombardier plans share issue. Bombardier: Previous equity offering was in 2015.
JEFFREY JONES
TIM KILADZE

Bombardier Inc. is raising $638million in its first share issue in more than three years, taking advantage of recent sharp gains in the plane and train maker’s stock to beef up its balance sheet.

Montreal-based Bombardier is issuing equity following a series of wins on the manufacturing and trade fronts, including an agreement with Airbus Group SE that rescued its marquee C Series commercial jet program and a U.S. trade ruling that scrapped massive duties on the aircraft.

The company is issuing 168 million class B subordinate voting shares in a bought deal led by Credit Suisse Securities, National Bank Financial Inc., UBS Securities Canada Inc. and TD Securities Inc. The shares are priced at $3.80 each. In the past year, the stock has traded as low as $1.96.

Bombardier closed at $4 on the Toronto Stock Exchange on Monday. Underwriters have an option to buy up to 25.2 million more shares for up to 30 days after closing, boosting the take to $734million.

The company said it plans to use net proceeds from the offering to bolster its cash position and improve its balance sheet under the company’s five-year turnaround plan under chief executive Alain Bellemare.

The initiative appears to be putting the heavily subsidized manufacturer on more solid financial footing. Last month, Bombardier reported that it narrowed its net loss for the fourth quarter, boosting revenue and free cash flow owing to strong performance in its rail segment.

The stock issue follows Bombardier’s deal with Airbus for the C Series jet program, which had been a drain on the company’s cash resources. Under the deal, announced in October, Airbus gets a 50.01-per-cent stake in the partnership behind the C Series passenger jet and takes over procurement, sales and marketing.

Since the agreement with Airbus was announced, shares in Bombardier have climbed nearly 70 per cent, reflecting increasing investor confidence in the company’s long-term survival following years of cost overruns and delays in the C Series.

Before this, Bombardier’s most recent equity offering came in 2015, after the company named Mr. Bellemare as CEO and also halted its dividend. Despite the uncertainty from these events, investors jumped at the deal, enticed by a large discount.

Bombardier sold shares at $2.21 each, a 10-per-cent discount to the market price. Within a few hours, the order book was roughly double the size of the offering, and U.S. orders accounted for almost 40 per cent. However, buyers of this offering suffered for years.

Bombardier’s shares tumbled, bottoming out around 80 cents in February, 2016. It took almost two full years from the equity financing for the stock price to recover to the offer price.

At the time of the deal, some people believed a major institutional investor would need to show its support in order for other investors to have the confidence to buy in. Given Bombardier’s Quebec roots, the Caisse de dépôt et placement du Québec was viewed as the logical player to step up in this fashion. Yet, a skirmish between the pension giant and Bombardier prevented the Caisse from doing so.

BOMBARDIER (BBD.B) CLOSE: $4, UP 4¢

THE GLOBE AND MAIL. THE CANADIAN PRESS. MARCH 6, 2018. Airbus wants to make C Series profitable by lowering supplier prices

TOULOUSE, FRANCE - Airbus intends to pressure suppliers for Bombardier's C Series jets to lower their prices in an effort to make its new partnership with the Quebec aircraft manufacturer profitable.

Airbus executive Klaus Richter made the comment today alongside Quebec Premier Philippe Couillard.

It came after Couillard, on an official trip to France, toured the facilities of the European aerospace giant in Toulouse.

Richter says Airbus took a gamble by taking over the C Series, which is currently not profitable.

He says Airbus will try to sell the planes first and then rework the costs with suppliers, because currently there is a gap between production cost and sale price.

Richter says the company intends to focus on volume to successfully reduce supplier prices and will hold its next major international gathering of suppliers in October in Montreal.

The European conglomerate is working to finalize its partnership with Bombardier and the Quebec government to produce the C Series aircraft.

Under the terms of the deal announced last fall, Airbus will hold 50.01 per cent of the new partnership.

Bombardier will retain 31 per cent while the Quebec government will hold 19 per cent.

REUTERS. MARCH 6, 2018. Airbus looks to productivity boost to cut CSeries costs

TOULOUSE, France (Reuters) - Airbus (AIR.PA) will need to increase sales of Bombardier’s (BBDb.TO) CSeries jets to cut production costs, the European planemaker’s procurement chief said on Tuesday.

Last year, Airbus agreed to take a majority stake in Bombardier’s CSeries jetliner program, which had not secured a new order for the 110-130 seat plane in the 18 months before the deal.

Their partnership is awaiting regulatory approval and both Bombardier and Airbus have expressed optimism over the CSeries’ long-term sales prospects.


“First we’re going to have to sell the aircraft, in order to then work with suppliers on costs of the program, because at the moment there is a gap,” Klauss Richter told reporters at Airbus’ Toulouse headquarters.

“An increase in productivity rate will help,” he said.

In November, EgyptAir signed an initial order for 12 CSeries jets and Bombardier also received an order for 31 planes from an undisclosed European buyer, marking an end to its sales drought.

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Quebec’s Prime Minister Philippe Couillard, also speaking to reporters at Airbus’s Toulouse headquarters, said approval from the regulators was the final hurdle standing in the way of a viable future for the CSeries.

The deal gives the CSeries improved economies of scale and a better sales network.

Bombardier said in February that there had been a “bit of a pause” in orders for its 110-130 seat jets as airlines wait for it to complete the Airbus partnership deal.

Reporting by Johanna Decorse; Writing by Richard Lough; Editing by Jane Merriman

REUTERS. MARCH 6, 2018. Airbus fights to defend A330 as order decisions loom
Tim Hepher

PARIS (Reuters) - Imminent airline decisions on $10 billion of wide-body plane orders could influence the fate of Airbus’ (AIR.PA) A330neo even before the recently upgraded jet completes flight trials, industry sources said.

American Airlines (AAL.O) said in January it was reviewing the Boeing 787-9 Dreamliner and shorter-range Airbus A330-900, which is in test flights before entering service this summer.

The U.S. airline aims to buy some 25-30 wide-body jets and could make a decision in coming days, one of the sources said.

“We are still evaluating our widebody options,” a spokesman for the airline said.

Even Boeing’s most vigorous supporters doubt Airbus would give up on the A330neo, which is key for its bottom line, but the contest marks the latest in a series of battles between Boeing’s newest long-haul jet in the air, the 787 Dreamliner, and upcoming A330neo - a market-share feud that has consumed the two planemakers for the past nine months or more.

Level, a long-haul budget carrier recently set up by British Airways owner IAG (ICAG.L), is also closing in on an order for about 8 planes in the same segment, the sources said.

“We’ll wait and see and we’ll take advantage of whatever aircraft is available,” IAG boss Willie Walsh said on Tuesday.

Airbus has had patchy results with the latest version of its money-spinning A330, relaunched in 2014 with efficient new Rolls-Royce (RRR.L) engines, and has made boosting sales one of its top priorities this year.

A330 family output has fallen to six a month from a peak of 10, making the success or failure of Airbus’s only profitable wide-body line a key topic for investors.

“The A330 makes money and generates cash, while absorbing a great deal of overhead,” said Sash Tusa, aerospace analyst at Agency Partners, adding that its long list of customers was useful to Airbus when it came to marketing other planes.

HAWAII SWITCH

Jitters over the future of the A330neo became apparent when AirAsia, one of Airbus’s largest customers, toyed with the idea of switching to Boeing’s 787.

Its decision to uphold an order for 66 jets, first reported by Reuters, eased pressure on the A330neo but analysts say that could change if it feels too exposed as the dominant buyer..

The last major A330neo order was for 28 planes from IranAir but doubts are growing whether that can be implemented any time soon due to U.S. concerns about a nuclear sanctions deal.

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Now, sources say Hawaiian Airlines has dropped an order for A330neos for the 787, a switch first reported by Leeham News.

With that in mind, industry sources agree Airbus is under intense pressure to win at American, preventing further output cuts and gaining valuable bragging rights in future contests across Asia.

Keeping the A330neo in the game would also leave less space for a new mid-market plane that Boeing is thinking of launching as early as this year - a 225-275-seat model that partly competes with the A330 family.

An Airbus spokesman declined to comment on specific contests, but said, “Many campaigns are ongoing, building on the 110 airlines who are operating the A330 family today.”

After trouncing Airbus in wide-body sales last year, Boeing aims to seize the advantage by targeting Airbus’s slow-selling A330neo with further sales of its competing 787.

Some analysts have speculated Boeing would also revive the passenger version of its 767 as a cheaper alternative to the A330, but an executive ruled this out.

But keeping A330neo output to a minimum would leave Airbus increasingly dependent on one model, the much newer A350-900, for its position in the wide-body market - mirroring Boeing’s predicament in the Airbus-led narrowbody market.

As the two marketing armies chase around the globe to the next 787-A330 dog fight, Australia’s Qantas (QAN.AX) and Air New Zealand could be next to step into the battle, sources said.

Reporting by Tim Hepher; Additional reporting by Alana Wise, Sarah Young, Victoria Bryan; Editing by Alexander Smith

BUDGET

Department of Finance Canada. March 6, 2018. Minister Morneau Promotes Budget 2018 Call to Action on Gender Equality in Vancouver

Vancouver, British Columbia – Making sure every Canadian has a real and fair chance at success is not just the right thing to do, it is the smart thing to do. Canada's future prosperity depends on it. To face the challenges of today and tomorrow, the Government of Canada will need the hard work and creativity of all Canadians. In return, it needs to ensure the benefits of a growing economy are felt by more and more people—with good, well-paying jobs for the middle class and everyone working hard to join it.

Today in Vancouver, Finance Minister Bill Morneau spoke to the Business Council of British Columbia at a Facebook Live event on how Budget 2018 advances the Government's plan for middle class progress with new investments to promote gender equality and create new opportunities for Canadians.

Canada's strong fiscal fundamentals—anchored by a low and consistently declining debt-to-GDP (gross domestic product) ratio—mean that the Government has the confidence to make the investments that will strengthen and grow the middle class, and lay a more solid foundation for our children's future.

Minister Morneau discussed how, through Budget 2018, the federal government is leading by example in promoting gender equality by proposing:

• A legislated "equal-pay-for-equal-work" regime in federally regulated sectors to the benefit of approximately 1.2 million employees. 
• To provide Canadians with more information on the pay practices of employers in the federally regulated sector, helping to shine a light on employers who lead in equitable pay practices, while holding employers accountable for wage gaps.
• To support the advancement of women in senior positions by publicly recognizing corporations that are committed to promoting women to senior management and board positions.
• A new Gender Results Framework to support equal opportunity for all Canadians, backed by new investments to achieve equality in the workforce and at home.
• A new Women Entrepreneurship Strategy to encourage greater participation by women in the economy, and help more women-owned companies grow into world-class businesses.

Quote

"As a government, we are committed to help the next generation of Canadians break free from the barriers that have held us back for so long—because we know that we can't continue to grow the middle class when half of us are being held back. To face the challenges of today and tomorrow, we will need the hard work and creativity of all Canadians. In return, we need to ensure the benefits of a growing economy are felt by more and more people—with good, well-paying jobs for the middle class and everyone working hard to join it."

- Bill Morneau, Minister of Finance

Quick Facts

Budget 2018 supports Vancouver by proposing:

• Up to $75 million over five years to Global Affairs Canada to establish a stronger Canadian diplomatic and trade support presence in China and Asia, including bolstering the number of Canadian diplomats and trade commissioners on the ground in China as well as new initiatives to promote Canada's trade with China and other Asian markets.
• $48 million over three years, starting in 2019–20, in renewed support for the Centre for Drug Research and Development's efforts to translate promising drug discoveries into commercialized health innovations and therapeutic products.
• $23.6 million over four years to support the Rick Hansen Institute's efforts to achieve breakthroughs in spinal cord injury research and care.

FULL DOCUMENT: https://www.fin.gc.ca/n18/18-014-eng.asp

Department of Finance Canada. March 5, 2018. Minister Morneau Highlights Budget 2018 Plan for Middle Class Progress at SheEO

Toronto, Ontario – Making sure every Canadian has a real and fair chance at success is not just the right thing to do, it is the smart thing to do. Canada's future prosperity depends on it.

To face the challenges of today and tomorrow, the Government of Canada will need the hard work and creativity of all Canadians. In return, it needs to ensure the benefits of a growing economy are felt by more and more people—with good, well-paying jobs for the middle class and everyone working hard to join it.

Finance Minister Bill Morneau today spoke with innovative women entrepreneurs at the SheEO Summit in Toronto about how Budget 2018 advances the Government's plan for middle class progress with new investments to promote equality and create new opportunities for Canadians.

Minister Morneau also spoke about how investments in Budget 2018 take the steps needed to encourage the broader participation of women in the workforce and build an economy that works for everyone. This includes the new Employment Insurance Parental Sharing Benefit that would provide additional weeks of parental benefits when parents agree to share parental leave, including adoptive and same-sex couples.

Through Budget 2018, the Government is making historic investments in women and girls and people with intersecting identities. With Budget 2018, the Government proposes:

• A new Gender Results Framework to support equal opportunity for all Canadians, backed by new investments to achieve equality in the workforce and at home. A recent study by the Royal Bank of Canada estimates that closing the gender gap in labour force participation rates alone, over the next two decades, could boost gross domestic product by 4 per cent.
• Introducing a new Women Entrepreneurship Strategy to encourage greater participation by women in the economy, and help more women-owned companies grow into world-class businesses.
• To support the advancement of women in senior positions by publicly recognizing corporations that are committed to promoting women to senior management and board positions.
• A legislated "equal-pay-for-equal-work" regime in federally regulated sectors to the benefit of approximately 1.2 million employees.
• Launching a five-year pilot project, the Apprenticeship Incentive Grant for Women, to encourage women's increased representation in male-dominated and better-paid Red Seal trades.

Quote

"Canadian women and men work hard every day. They deserve to be equal partners in society and equal participants in the economy—our future prosperity depends on it. Through Budget 2018, our Government is striving for equality, so that everyone has the chance to contribute to and benefit from a growing economy."

- Bill Morneau, Minister of Finance

Quick Facts

Budget 2018 supports Toronto by proposing:

• To increase the amount of loans provided by the Rental Construction Financing Initiative from $2.5 billion to $3.75 billion over the next three years. This new funding is intended to support projects that address the needs of modest- and middle-income households struggling in expensive housing markets like the Greater Toronto Area. In total, this measure alone is expected to spur the construction of more than 14,000 new rental units across Canada.
• Renewed funding of $1.2 million over three years, starting in 2019–20, in support of the Gairdner Foundation. Based in Toronto, the Gairdner Foundation recognizes and rewards scientific excellence through the Canada Gairdner Awards, which are among the most prestigious biomedical prizes worldwide. This new funding would support the Foundation's activities, including Canadian and international outreach efforts to expand its reach and diversity.

FULL DOCUMENT: https://www.fin.gc.ca/n18/18-013-eng.asp

Innovation, Science and Economic Development Canada. March 6, 2018. Budget 2018: Investing in Canada's innovators, scientists and researchers

St. John’s, Newfoundland and Labrador - Canadians have always understood that better is possible, and time after time we have used curiosity, courage, creativity and collaboration to create positive change for ourselves—and the world. But progress does not happen without commitment, effort and the innovative spirit of Canadians—from junior researchers and scientists to entrepreneurs.

Today, the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development, the Honourable Seamus O’Regan, Minister of Veterans Affairs, Associate Minister of National Defence and Member of Parliament for St. John’s South–Mount Pearl, and Nick Whelan, Member of Parliament for St. John’s East, were at Memorial University to discuss how, through Budget 2018, the Government is taking significant steps to support leading-edge science by investing in the new generation of research and researchers, including women, visible minorities and Indigenous peoples. The Government is investing in the people behind the ideas that will change the way we live our lives—new investments of nearly $4 billion over five years to support the next generation of Canadian research and researchers.

To transform government innovation programs so that they better meet the needs of Canadian businesses, Budget 2018 builds on the Government’s Innovation and Skills Plan, increasing its funding while consolidating business innovation programs to make them easier to navigate and more responsive to the challenges and opportunities businesses face today and will face in the future.

In Budget 2018, the Government is also introducing the Women Entrepreneurship Strategy, which focuses on skills and access to capital, mentorship and networking to help empower women to more fully participate in and benefit from a growing economy. These investments will help more women-owned companies grow into world-class businesses so that they continue driving economic growth that benefits all.

With Budget 2018, the Government proposes to:

• Invest in the next generation of Canadian research and researchers by providing more than $1.7 billion over five years to:
  • support the granting councils and research institutes so they can provide increased support and training opportunities for the work of some 21,000 researchers, students and high-quality personnel every year, including funding targeted specifically at research that promotes collaboration and is international and interdisciplinary;
  • ensure researchers have the necessary space and support to undertake high-quality multidisciplinary research, providing funding for the Research Support Fund that provides universities with resources to cover the indirect costs of research; and
  • attract and retain leading, young and early-career researchers at post-secondary institutions across the country through new funding for the Canada Research Chairs Program.
• Invest $1.3 billion over five years to ensure researchers have access to the world-class research laboratories and equipment they need at Canadian universities, polytechnics, colleges and research hospitals, including $763 million for the Canada Foundation for Innovation and $572.5 million for a Digital Research Infrastructure Strategy.

With Budget 2018, the Government also proposes to renew its commitment to supporting scientific research:

• Enhance National Research Council Canada to reinforce its research strengths and its role as a trusted partner with large-scale national teams committed to exploring disruptive technologies and cutting-edge innovation.
• Bring together federal scientists and researchers across the country, proposing $2.8 billion on a cash basis over five years to build collaborative federal science and technology facilities.

Through Budget 2018, the Government also proposes to provide $2.6 billion over five years in additional support to make it easier for Canadians to do business and for entrepreneurs to access the resources they need to innovate, scale up, create jobs and reach new customers around the world.

Quotes

“With this budget, our government has made the largest investment in science in Canada’s history. By supporting scientific research and discovery, we’ll transform Canada’s economy into an innovation economy and generate thousands of well-paying middle-class jobs for this generation and the next. And because innovation must be for the many and not just the few, this feminist budget will empower women in all areas of our economy because we know that equality is essential to our success.”

– The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development

With Budget 2018, we are making historic investments that support innovation and help the next generation of scientists to meet the challenges of the changing economy, including right here in Newfoundland and Labrador. Canada can be a global leader in attracting and increasing research jobs and in creating the technology that helps us navigate our everyday lives. This includes empowering girls and women to pursue an education and career in the sciences that will help drive innovation and support the middle class.”

– The Honourable Seamus O’Regan, Minister of Veterans Affairs and Associate Minister of National Defence

“I have received an incredible response on this budget and what it means for Canadians, not only in supporting fundamental science research but also in addressing historical gender inequities in science and innovation. The women and men of St. John’s, including me, are clearly proud of the direction this government is taking the country with a budget that is progressive and inclusive, that works to correct systemic inequity and that strengthens Canada’s position as a prosperous, innovative nation of discovery.”

– Nick Whalen, Member of Parliament for St. John’s East

FULL DOCUMENT: https://www.canada.ca/en/innovation-science-economic-development/news/2018/03/budget-2018-investing-in-canadas-innovators-scientists-and-researchers.html

Innovation, Science and Economic Development Canada. March 6, 2018. Budget 2018: Investing in Canada’s innovators, scientists and researchers

Waterloo, Ontario - Canadians have always understood that better is possible. Time after time, we have used curiosity, courage, creativity and collaboration to create positive change for ourselves and the world. But progress does not happen without the commitment and the innovative spirit of Canadians—the students, scientists and entrepreneurs who are breaking new ground every single day.

Today, the Honourable Kirsty Duncan, Minister of Science and Minister of Sport and Persons with Disabilities, alongside the Honourable Bardish Chagger, Minister of Small Business and Tourism and Leader of the Government in the House of Commons, were at the University of Waterloo to celebrate how, through Budget 2018, the Government is making historic investments to support the next generation of researchers—a generation that includes the remarkable women, visible minorities and Indigenous peoples in the sciences who bring valuable perspectives and ideas to the table.

The Government is investing more than $6 billion in the people behind the ideas that will change the way we live our lives.

Highlights include:

• $1.2 billion for the granting councils (the Natural Sciences and Engineering Research Council of Canada, the Social Sciences and Humanities Research Council of Canada and the Canadian Institutes of Health Research) that will go a long way in supporting the work of some 21,000 researchers, students and high-quality personnel every year, including funding targeted specifically at research that promotes international, interdisciplinary and high-risk/high-reward research.
• $210 million for the Canada Research Chairs (CRC) Program that will be used to increase diversity among nominated researchers, including increasing the number of women who hold these prestigious positions. The funding is flexible enough that the CRC Program could see a bump of 250 additional chairs for early-career researchers in the next few years.
• $763 million for the Canada Foundation for Innovation, a not-for-profit agency that puts cutting-edge tools in the hands of our scientists, scholars and students and ensures they have state-of-the-art labs and facilities to make their greatest discoveries.
• $140 million for colleges and polytechnics that equip students with the hands-on skills they need for the jobs of today and tomorrow and that actively collaborate with small and medium-sized businesses to help solve their challenges.

Investing in a big way in science and the next generation of scientists is one thing. But the Government of Canada knows it is important to invest in the innovators and entrepreneurs who translate the wealth of knowledge generated by researchers into new products, technologies and services. Budget 2018 also proposes $2.6 billion over five years in additional support to make it easier for Canadians to do business and for entrepreneurs to access the resources they need to innovate, scale up, create jobs and reach new customers around the world.

Quotes

“My message to our outstanding scientists: we went big so you could go even bigger. With Budget 2018, we are making historic investments in fundamental research so that the next generation of scientists and scholars can fulfill their greatest ambitions. Our investment will empower more women, Indigenous peoples and those otherwise under-represented in research to pursue a career in the sciences—one that will help drive innovation, create new jobs, and support a strong and growing middle class.”

– The Honourable Kirsty Duncan, Minister of Science and Minister of Sport and Persons with Disabilities

“New technologies and breakthroughs are often driven by hard-working start-ups looking to shake up the status quo. They are key to driving innovation and setting our economy up for growth in the modern economy. Thanks to historic investments in fundamental research, as part of Budget 2018, our government is taking steps to ensure that our scientists and researchers have the tools and support they need to continue their leadership on the world stage. The budget’s emphasis on empowering women, especially women scientists, is especially important. These dedicated, passionate women will be the leaders of tomorrow, not only in science but in business as well.”

– The Honourable Bardish Chagger, Minister of Small Business and Tourism and Leader of the Government in the House of Commons

FULL DOCUMENT: https://www.canada.ca/en/innovation-science-economic-development/news/2018/03/budget-2018-investing-in-canadas-innovators-scientists-and-researchers0.html

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LGCJ.: