Title: Canada-U.S. Trade Minister Discusses Future Trade Relations

OTTAWA — Canada is hopeful about ongoing trade discussions with the United States, but Trade Minister Dominic LeBlanc cautioned that trade agreements will not revert to past norms. During a Senate Committee meeting on Foreign Affairs and International Trade, LeBlanc stated, "I do believe this is resolvable. But the relationship with the United States has fundamentally changed and it will not magically go back to what it may have been a year ago or 25 years ago."

LeBlanc, who represents the Carney government in trade matters with the U.S. and Mexico, emphasized the shared interests between the two nations. He noted that both countries benefit from freer trade. After the committee session, he explained that Canada is pursuing a two-track strategy. This includes potential sectoral agreements for industries like steel, aluminum, and softwood lumber, as well as a broader trade deal. "Both tracks are still in discussions," he said.

The minister acknowledged that it is too early to determine whether a sectoral or comprehensive agreement is more likely. He mentioned that issues such as energy security, critical minerals, and defense could also play a role in negotiations. "At one point, there may be an intersection," he added.

LeBlanc highlighted Canada’s influence in trade talks, particularly due to its strong aluminum sector, which is vital to the U.S. auto industry. He remarked, "There are leverage points. There are so many lines of intersection."

While he refrained from making predictions about the outcome of the negotiations, LeBlanc indicated that Canada is open to either type of deal. He stressed the importance of maintaining communication with U.S. and Mexican officials. Timing is also a factor, as Canada could be in a better position if U.S. tariffs lead to inflation for American consumers.

The Carney government is preparing the Canadian economy for a landscape with increased U.S. protectionism. Trade patterns with alternative markets in Europe and Asia are already established, making diversification a challenge. Mark Manger, a political economy professor at the University of Toronto, noted, "It’s extremely difficult to diversify trade."

The 2020 CUSMA trade agreement, which includes the U.S., Canada, and Mexico, is not set to expire for over a decade. However, it will be reviewed next year as it approaches its sixth anniversary. Recently, U.S. President Donald Trump has implemented various trade tariffs affecting multiple countries, some of which have negotiated tariff arrangements for their exports to the U.S. Canada has been somewhat protected by the existing CUSMA deal, although certain sectors have faced challenges due to U.S. actions.

In preparation for the evolving trade environment, Ottawa has initiated efforts to enhance ports, rail lines, and pipelines to boost the competitiveness of Canadian exports. Additionally, the government is working to reduce inter-provincial trade barriers and implement re-skilling programs for workers impacted by tariffs.