QUESTION PERIOD — Foreign Affairs and International Trade
Steel and Aluminum Tariffs
June 26, 2020
Honourable senators, my question is for the Leader of the Government in the Senate. Leader, I’m sure you will have a well-deserved rest from now to September 22 when I will have my next question.
My question is on aluminum tariffs, leader. It has been widely reported that the U.S. could announce the reinstatement of 10% tariffs on our aluminum exports as soon as today, with an implementation date of July 1. The U.S. placed tariffs of 10% on aluminum in May 2018. These tariffs damage not just our aluminum industries but steel as well, which was hit with a 25% tariff.
A joint statement was issued by our countries last May to end the dispute, stated tariffs may be re-imposed if imports “surge meaningfully.” It was pointed out to this government at the time that without a definition of “surge,” we would be vulnerable to so-called snapback tariffs.
Leader, which cabinet ministers have spoken about this matter with their American counterparts in recent days? Is your government preparing retaliatory tariffs in the event the U.S. attempts to restrict our aluminum exports?
Thank you for the question. I don’t have specific information with regard to which specific ministers may be addressing this issue, save to assure this chamber that this issue, as all economic issues with regard to our relationship with the United States, are top of mind and high priority for this government.
The deputy minister and others have done an exemplary job of protecting Canadian interests in their discussions on these issues with their counterparts. The government is very aware of the possibility, as announced by their counterparts south of the border, and will take the appropriate action, both behind the scenes and, if circumstances require, with other measures, to make sure that unfair tariffs will not be met with silence by this government.
“Top of mind and high priority.” We have heard that statement here so many times. There are so many things that are high priority and top of mind for our government that they are failing with.
Leader, the new NAFTA is scheduled to come into force on July 1. In December, Minister Freeland stated that under this deal, Canada is the only significant producer of aluminum with tariff-free access to the U.S., and the NAFTA changes retain that access. I wonder if the minister would say the same thing today.
Leader, in response to a question on Monday, you stated:
The Prime Minister and his government worked very hard and successfully reached an agreement with the United States and Mexico that will benefit Canadians. . . .
You also stated:
The Prime Minister has an effective relationship with President Trump.
Leader, if our current trading relationship with the United States is successful and effective, as you claim, then why can your government not secure a resolution on aluminum that lasts for more than one year?
Thank you for the question, but with great respect, I think it misstates the actual nature of the arrangements and the benefits, specifically to Canadian aluminum producers that CUSMA or NAFTA introduced.
In general terms, CUSMA preserved $57.3 billion in exports from Quebec and Quebec only, to say nothing of the country as a whole, to the United States, which includes, as I mentioned on many occasions, supply management and a cultural exemption.
To the point of your question, CUSMA and NAFTA provide that 70% of the aluminum in cars produced under NAFTA, whether produced in Canada, Mexico or the United States, must contain aluminum produced in North America. As all members of this chamber know, Canada is an enormously large producer of aluminum. This aspect of CUSMA, which was negotiated carefully and cleverly, provides enormous benefits to aluminum producers in Canada.
I would add this as well: Trade agreements always have provisions for resolving disputes. The fact that there is a trade agreement doesn’t mean that one side or the other will not use other mechanisms in their legal disposal, and under their sovereign powers, to try to take advantage to protect their own. We have, in the course of NAFTA and others, successfully defended Canadian interests against retaliatory tariffs or other measures by invoking the dispute resolution mechanisms, that not only NAFTA provides, but are provided in the international economic order. Canada will continue to do the same.
