Editor’s Note: This story was updated to clarify a reference to Canada’s softwood lumber industry being subsidized.
Renegotiating NAFTA could protect Canada from one of U.S. President Donald Trump’s potential – and contentious – tax changes, one of the president’s advisers said Monday after speaking with the Canadian government.
“One of the things the U.S. is looking at is a potential border tax, which, I think if you’re in NAFTA, is a good place to be,” said Stephen Schwarzman, the billionaire co-founder of a private equity giant who was tapped to chair the President’s Strategic and Policy Forum.
READ MORE: Canada could benefit from revamping NAFTA, expert says
Throughout the American presidential election campaign, Trump was clear one edict would dictate his time in office: America First.
The idea was underscored in the inauguration address delivered last week, in which Trump told America his administration will follow “two simple rules: Buy American and hire American.”
WATCH: Patriotism, according to Trump, becomes the new measure of America.
One means by which the president could encourage his fellow citizens to follow that plan is to tax imports to the United States or impose fees on companies exporting labour on items for sale in the U.S. – just as he threatened with Toyota and Ford Motor Co. earlier this month.
Where these ideas left Canada – where trade with the U.S. is paramount to the economy – has not been clear, since Trump has made little mention of Canada, saving most of his shots for Mexico and China.
WATCH: President Trump withdraws from the TPP, NAFTA seems not far behind
Schwarzman’s assuring words – that Canada “has been a great partner of the United States as long as anyone can remember,” and “things should go well for Canada” in terms of any trade talks with the U.S. – came as a relief after months of increasing anxiety and speculation.
Still, positive feedback from the U.S. doesn’t mean renegotiating NAFTA – a tenet of Trump’s campaign – is off the table.
READ MORE: Trump promises ‘massive’ tax cuts for middle-class, advantages for manufacturing domestically
But that’s not necessarily bad news, trade experts have said.
An updated NAFTA could improve labour standards, better protect the environment, and allow Canada to renegotiate the requirement forcing it to sell a certain amount of oil to the U.S., said American and Canadian trade lawyer, Mark Warner.
Another area that could benefit from a revamping of the deal involves the difficulty workers often encounter trying to cross the border for work, he said.
WATCH: Trump announces he will be meeting with Trudeau soon to discuss NAFTA renegotiation
International businesses have complained about an out-of-date visa system that creates unnecessary red tape when employees travel across the border for work. Adding new, digital-economy jobs to the list of professions eligible for easy-access visas under NAFTA would go a long way to easing those struggles, he said.
Of course, once the pact is open for negotiation, there’s no way to isolate any parts – it’s all on the table, which means Canada might have to look at its softwood lumber industry, which U.S. producers complain is subsidized, and its heavily regulated dairy sector.
— With a file from The Canadian Press
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