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Ex- U.S. Ambassador To Canada: Allies' Trade Relationship Is At Its Worst

MICHEL MARTIN, HOST:

We turn now to the rocky trade negotiations between the U.S. and Canada. After days of negotiations to rewrite the North American Free Trade Agreement, or NAFTA, Canada's place in the trilateral deal is uncertain. Congress says it will only approve a new deal that includes both Mexico and Canada. But, as of now, the revamped agreement includes only Mexico with room for Canada to sign on, quote, "if it is willing," according to the White House.

The talks have been a departure from the historically close relationship between the U.S. and Canada. Here to shed light on that relationship and what this could mean for trade between the two countries going forward is Bruce Heyman. He served as U.S. ambassador to Canada from 2014 to 2017.

Welcome, ambassador. Thank you so much for joining us.

BRUCE HEYMAN: It's a pleasure.

MARTIN: I just wanted to get a little bit broader context, if we could, before we go into sort of the details of what just happened. I get the sense that this isn't just about trade - that this reflects the changing relationship between the U.S. and Canada. How different from recent history have these last couple of months been?

HEYMAN: Oh, I think as different as night and day. You know, it was just a couple years ago that Prime Minister Trudeau was honored at the White House in a state dinner, which was the first time in nearly 20 years. And then the prime minister invited President Obama to speak before Parliament, and that was the first time in more than 20 years. And I would say that, as we entered the Obama administration, the U.S.-Canada relationship was as good as it may have ever been. And here we are, not even two years later, and I would say that it may be as bad as it has ever been. We are definitely taking some steps backward right now.

MARTIN: What are the major sticking points between Canada and the U.S. right now? Do you know? Can you give us some specifics?

HEYMAN: Yeah. But, before we dive way deep into the specifics, I thought I'd just give you some context. The U.S.-Canada trade relationship is huge. It's $670 billion. But not only is it large, but it's balanced. We sell as much from the U.S. to Canada as Canada sells to us. In fact, we do a little bit more - it's a surplus. Now, in this very, very large relationship, as you can imagine, there are some irritants and some things that, you know, we can improve upon. And NAFTA, as an agreement, is going to be 25 years old this January. And so there were a lot of industries in - that exist today that did not exist back then.

But the president, for some reason, seems to have a burr in his saddle on Canada itself, and he keeps manipulating the story and the facts with regard to the U.S.-Canada trade relationship. And he has said even over the last few days that Canada somehow has been taking advantage of the United States. And I can tell you that that is not true.

That being said, are there things that we can improve upon? The president has talked about dairy as an issue. So everybody knows, the U.S. sells more dairy to Canada than Canada sells to the United States. But the reality is that the Canadians value the relationship. This is our best friend. This is our best ally. And it's much more complicated than this just transactional relationship. And I think the president is looking at this just on transactional terms, not the deep-seated, long relationship we've had together as next-door neighbors and allies.

MARTIN: So the administration had set Friday as a deadline for renegotiating a deal. Now they say that there will not be a revised version of NAFTA until late November. It may or may not include Canada. The president also tweeted today that there is no political necessity to keep Canada in the new NAFTA deal and says, if we don't make a fair deal for the U.S. after a decade of abuse, Canada will be out. I'm quoting now. He also says Congress should not interfere with these negotiations, or I will simply terminate NAFTA entirely, and we will be far better off. Is it - is that a possibility? Is that something that, in your view, could happen?

MARTIN: Well, I never want to underestimate the president and his actions and what he will try to do. But going down this path would be contrary to Republicans' and Democrats' desires to keep a strong relationship with Canada. You know, there are 35 states in the United States - their number one export country is Canada.

This is existential for Canada. You know, when we start talking about taxing their autos and doing all this stuff - you know, an automobile manufactured in Canada has 50 percent U.S. parts and content. And so we make things together. And so I think he's damaging this really important relationship we have with each other.

MARTIN: It seems to me that the president's argument is that the U.S. relationship is more important to Canada than Canada's relationship is with the U.S. - that that seems to be the calculation, that the U.S. has all of the leverage. Tell me why he's wrong in your view.

HEYMAN: No, I think the U.S. has the leverage. Look, we have the largest economy. We're 10 times the size of Canada. We have this large military. We have that leverage. But, by the way, we have that leverage virtually all across the world. But just because you can, you know, crush somebody, just because you can, you know, dictate your terms to somebody, that doesn't mean you should.

MARTIN: But for people who believe that the president's job is to express American interests wherever and whenever, that that is his job, what would you say? I mean, what is the argument that you would make to people who believe that it is absolutely appropriate for the United States to press its advantage, its leverage at every turn - you know, in this particular case, just speaking about the Canadian example specifically? What's your argument about why that isn't in the U.S.'s long-term interests to do?

HEYMAN: Because the United States should constantly fight for our interests, but our interests are much broader and more complex than just getting the last dollar. And if we get the last dollar all the time and squeeze people, we break down those relationships where we will be dependent upon them well into the future to tackle issues we don't even anticipate today.

But even with that, our trading relationship is on balance more beneficial to the United States. We have a trade surplus with Canada. We have a trade surplus in steel, although we're putting tariffs on steel. We have a trade surplus on dairy, and millions of jobs are created. And so I will tell you that it's a much more complex issue than just getting the last dollar.

MARTIN: That's a former U.S. ambassador to Canada, Bruce Heyman. We reached him in Aspen. Thank you, ambassador. Thank you so much for speaking with us.

HEYMAN: Thank you.

(SOUNDBITE OF FLAMINGOSIS' "FOOTBALL HEAD") Transcript provided by NPR, Copyright NPR.