[S]TOWE — A trade dispute between the United States and Canada bubbled behind the smiles and warm handshakes exchanged between Northeastern governors and eastern Canadian premiers meeting Monday in Stowe for their annual conference.
President Donald Trump has called for a renegotiation of the North American Free Trade Agreement, a trade deal between the U.S., Canada and Mexico reached during the Clinton administration that essentially removed most tariffs between the three countries and created a single trading bloc.
In June, the president imposed tariffs on all steel and aluminum imports, which other countries, including Canada, responded to with retaliatory tariffs on U.S. imports.
“I’m alarmed,” said Connecticut Gov. Dannel Malloy. Later, Malloy said the tariffs had done “real damage” to businesses in his state. “This is having a real impact.”
Gov. Phil Scott’s chief of staff, Jason Gibbs, said trade concerns were “causing anxiety” among the conference participants. Later, Scott said the two countries were too important to each other to let relations break down and predicted “calmer heads will prevail.”
The issue was of such importance that the U.S. ambassador to Canada and the Canadian ambassador to the U.S. attended the conference, Gibbs said. John Tracy, the Vermont director for U.S. Sen. Patrick Leahy, said he came to allay concerns about the trade wars and emphasize regional cooperation. (Maine Gov. Paul Lepage and New Hampshire Gov. Chris Sununu did not make the trip to Stowe.)
“I don’t believe trade wars work. I believe they lead to isolation” and damage relationships between countries, Scott said. Those relationships, he said, take a long time to build but could also be hurt if not nurtured.
Canada and the US conduct more trade with each other, $730 billion annually, than any two countries in the world and leaders on both sides of the border worried the escalating tariff wars were hurting businesses in both countries. They noted the uncertainty of what would happen in the trade talks had already stalled investments.
Malloy emphasized “how close we all are” despite political disputes at the national level. The six New England governors and five eastern Canadian premiers have met annually for 42 years to discuss issues of mutual importance and interest, including energy and trade issues. They emphasized working together, they were the 14th largest economy in the world.
“If we ever needed an organization like this, it’s now,” said Brian Gallant, the premier of New Brunswick. He said it was important for the governors and premiers to stand side by side and see each other as a single unit, not competitors. They signed several agreements on cooperation on energy and trade during the two-day conference.
“Everybody is going to lose” with an escalating tariff war, said Philippe Couillard, premier of Quebec.
Participants all agreed NAFTA needed modernizing — it predated the rise of the internet, for example — but worried the three North American countries could lose power negotiating with other countries, like China, if they are divided and fighting with one another.
They derided Trump’s trade tactics (Malloy called Trump’s tweets “at best childish”) and Couillard said Trump had fractured relations between the two friends. Recently, the Quebec premier noted, the countries fought together in the War on Terror.
The premiers said they hoped a new trade agreement could be a win-win for both countries, particularly in dealing with the rest of the world, but Malloy worried Trump is only interested in winning a better deal for American manufacturers. The only hope for a change in attitude, they said, is if consumers and American companies are badly hurt too.
Earlier, at a conference on trade, one of the participants noted that Trump’s style was to present dramatic “disruptive” proposals. Maryscott Greenwood of the Canadian American Business Council cautioned the Canadian leaders that if they don’t negotiate with Trump, he will increase the pressure with more tariffs until they do.
Most of the NAFTA negotiations have focused on Mexico, and little with Canada, though Trump has criticized Canadian Prime Minister Justin Trudeau as being weak. The Canadian government has essentially said it will not continue negotiations until the talks between the U.S. and Mexico are completed, participants at the conference said.