WASHINGTON – The flurry of Canadian cabinet members visiting Washington proceeded Wednesday, with Finance Minister Bill Morneau the latest to head to a U.S. capital awash in policy debates with big implications for the northern neighbour.
Morneau described it as a getting-to-know-you session, so that the Canadian government has lines of communication ready when the Trump administration settles on wide-reaching policies involving tax reform and trade.
He was greeted at the U.S. Treasury right beside the White House by his counterpart, Steve Mnuchin, who welcomed Morneau as his first foreign visitor since taking office.
“I’m honoured that I’m doing this with you,” said the new U.S. treasury secretary.
“There’s a long history between our countries. I look forward to working very closely with you.”
The countries have much to discuss — including major U.S. tax reforms that could affect Canada in a number of ways, starting with lower corporate rates, and ideas being considered in Washington for a border tax.
But those reforms are hotly debated and the U.S. capital is tied up with these even before discussing another idea important to Canada: the future of the North American Free Trade Agreement.
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The White House has said it doesn’t even want to settle on a tax plan before it deals with Obamacare health-care reforms and some analysts believe NAFTA talks can’t get serious until there’s clarity on the tax plan.
With all that uncertainty, Morneau described his meeting more as personal bridge-building than policy-making. He said he didn’t delve into Canadian objections to the border-tax idea, which has strong pockets of opposition within the administration and Congress.
“We spoke broadly about our objectives,” Morneau said.
“When he spoke about tax reform, he did not go into specifics. … At this stage, without details, it’s not a time for us to express support, or opposition, or even insights into the impact on the Canadian economy.
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“Our goal right now is to develop a strong relationship. So that as secretary Mnuchin and his colleagues are considering actions, we’ll have the ability to talk about those actions.”
As part of that relationship-building, Morneau said he offered to share details of Canada’s experience with one of President Donald Trump’s stated priorities: using private funding to build public infrastructure. He said his U.S. counterpart expressed an interest in learning more.
Trump mentioned Canadian policies during his speech to Congress this week. One involved copying aspects of Canada’s skills-based immigration system. He also spoke about private financing for his massive, $1 trillion infrastructure idea.
It’s part of a big policy agenda that’s small on details.
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On Capitol Hill, there’s confusion and some frustration that the White House keeps declaring ambitious goals, wants them met in a popular way and doesn’t articulate specifics regarding the hard decisions that need to be made.
That’s caused some uncertainty about whether NAFTA negotiations can even get started soon — when the country is still sorting out its import-export policies in the barely begun debate over tax reform.
Mark Warner. a Canada-U.S. trade lawyer based in Toronto, says he can’t see how NAFTA talks get started now: “In my opinion they can’t get started on NAFTA until they have sorted out the border adjustment tax.”
Some American lawmakers also expect a slow start on NAFTA, for other reasons.
Chris Collins, a New York Republican who was the congressional liaison for the Trump transition team, said he believes the United States trade representative needs to be confirmed before Trump sends his 90-day notice to Congress that trade talks are starting.
“I think you need your trade rep (first),” he said.
But that same trade representative is embroiled in complications regarding his nomination. When asked whether that means the NAFTA process might not begin for months, Collins replied: “Yup.”