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Lorne C's avatar

What nonsense. There is no comprehensive trade deal, just an agreement to return to the way tariffs once were. No blinking. No capitulation.

Barry Appleton's avatar

Sorry Lorne. The term in the CUSMA is not a comprehensive trade deal. It is a Free Trade Agreement, and it is subject to a broad scope. The terms of CUSMA Art 32.10 are very powerful limits on Canadian sovereignty with non-market economies. That is why they call it a poison pill. I do not know why Canada agreed to it in CUSMA (and to other sovereignty limits on digital policy). It was poorly considered. So what we did was enter into an agreement that fits within the prohibited scope of the policy, and we did not give the required notice to the Americans or the Mexicans. This is not what I want. It is what occurred. I am like the weatherman. I report the weather - I do not make it. The PM is a very smart and capable man. He has many technical advisors who would have made him aware of the risks - but in my view, it was unacceptably risky right now. We had options that would have complied with CUSMA and still addressed the need to address the agri-business concerns - but we did not follow them. And the result was deeply unfortunate for Canada and even more so for the Canadians affected by the sectoral tariffs.

Barry Appleton's avatar

Sorry Lorne. The words in the treaty are free trade agreement, not a comprehensive trade deal. The CUSMA was very carefully drafted to rein in Canadian sovereignty with respect to making any types of deals with non-market economies without the advance permission of the Americans and the Mexicans. That's why they call it a poison pill. I do not know why Canada accepted such poor language in 32.10 and in some other sections of CUSMA in the first place. I would have advised against it (I was there for NAFTA, not CUSMA). I am just the weatherman here, telling everyone that there is a snowstorm. I do not cause the snow - but I think the public has a right to know.

Roy Brander's avatar

Carney made a small, opening deal with China, and was just forced to reassure Trump it was not a “free trade deal”. Nothing in the deal changed. How is that blinking?

And, hey: since the deal with China remains on and unchanged, I guess there will not be 100% tariffs, no?

Unless Trump blinks. Like he did on Greenland, in a few hours flat.

Barry Appleton's avatar

Mr. Brander. I am afraid that you need to read the terms of the treaty. What you call a "small, opening deal" fits squarely within the scope of the term "free trade agreement" under the CUSMA. This is not what I want - it is the result of poor treaty practice by Canada in accepting this limitation in CUSMA. If your definition were to apply, the definition would have been defined to equate with the WTO definition. And it appears that Canada will be forced to revamp the China deal - but we will need to see how this plays out. For sure, having a problem with the U.S. and another with China is not optimal for Canada. But you can be sure - on the China file - the U.S. is not blinking. Our goal is to build stability as much as possible. That is the opposite of what we received here.

Roy Brander's avatar

I was taking "free trade deal" as defined by virtually all trade in anything being unhindered, as with CUSMA covering 95%(?) of all trade value.

Whatever the agreed definition under CUSMA, Carney says it's not a violation, and I'll go with that. Besides: Trump will ignore it as he ignores every other law and regulation. It's not like he didn't unlawfully throw NAFTA in the toilet in 2018, and unlawfully throw his own self-praised CUSMA signature in the toilet last year.

The discussion tends to revolve around our not having the power to make America give us the time of day, but:

The great length of negotiations so far, with tariffs mostly off, just like they were in 2018-2019 before CUSMA replaced NAFTA with only the smallest tweaks changed, strongly suggests that we are not without leverage.

can't think what greater leverage Trump has now than 2018. If the USA had the trade leverage to hurt us, Trump would absolutely have done that in 2018. I suspect he found that NAFTA had already been negotiated, not by the soft little babies he imagines, but by skilled, knowledgeable professional lifelong trade negotiators that screwed us as much as possible back in the 90s.

So I think after the current CUSMA negotiations, the new CUSMA 2.0, or NAFTA 3.0 will be about the same deal AGAIN...Whether we make this deal with China or not.

I'm very much of the Churchill philosophy at the moment: step on the bully's toes until he apologizes. I hope Carney is looking around the world for an even more Trump-offensive thing to do. Trump is facing inflation headwinds that will blow hard if he keeps up the tariffs, and I think the former allies worldwide are smelling blood in the water.

JOHN BERRY's avatar

“Our goal is to build stability…” Orwell had you pegged long ago. No lie is too.big!!!

Hansard Files's avatar

The dismantling of our trade advisory teams is the critical failure here. We used to rely on SAGITs, which were groups of industry experts who guided negotiators. Hansard records show the government replaced them with general consultants. Those consultants often lack the technical depth to spot traps like Article 32.10. We are bringing generalists to a specialist's fight.

Peter Frood's avatar

New to you. I recall officials downplaying the notice clause after CUSMA was signed. I had a WTF moment at the time. I like the prescriptive measures you set out and hope that the Libs will stop slagging the puck, make the necessary decisions, disengage and push an aggressive innovation agenda. Keep hammering.

Chris Galletly's avatar

There was never a '“free trade” deal. It was simply a trade deal regarding EV’s and Canola. Nothing more nothing less. Carney never backtracked. Carney never blinked.

However, let’s discuss the hypocrisy of Trump criticizing Canada working out a deal with China, when he himself has made several deals with Xi. Americans are still buying goods from China.

Barry Appleton's avatar

Two points need to be separated.

First, I am not claiming that a comprehensive free trade agreement was concluded. The issue is not labels. The issue is trajectory and signalling. Even limited, sector-specific arrangements with China—particularly where they confer preferential treatment or policy alignment—matter in the context of USMCA Article 32.10 because that provision is designed to address direction of travel, not just final form. Governments often begin with “narrow” trade deals that later deepen. That risk is precisely what the clause was written to manage.

Second, the comparison with the United States misses the legal asymmetry. The U.S. is not constrained by USMCA in its dealings with China in the same way Canada and Mexico are. Article 32.10 does not prohibit trade with China; it preserves a unilateral exit option for the U.S. if a partner enters into a China FTA–type arrangement. That right exists regardless of how much trade the U.S. itself conducts with China or what deals President Trump may strike. Hypocrisy, if any, is irrelevant to treaty operation.

Americans buying Chinese goods does not change the legal structure Canada agreed to. Ordinary trade flows are permitted. Preferential trade agreements are the issue.

My argument is not about moral consistency or personalities. It is about understanding how the treaty allocates risk and leverage—and recognizing that Canada bears that risk whether or not anyone chooses to acknowledge it publicly.

Sepehr Gerami's avatar

Canada blinked?

LOL.

Whatever makes you go away America.

Nic's avatar

New reader. A bit hyperdramatic no? I didn’t know clarification meant capitulation. Also why are you assuming that this current government hasn’t been informing the Americans for months of these negotiations.

Barry Appleton's avatar

Nic - I am happy to answer your question. At the outset, I am like a weathercaster in Canada today. I report the weather, but I do not cause the snow and cold. Because the Canadian government said it recently notified the American Trade tsar (I assume that means Commerce Secretary Howard Lutnick), which does not meet the advance consultation requirements of the CUSMA provision. Further, the Americans would likely not have been happy with the Canadian proposal involving EVs (they really have no interest in canola) and thus we would have heard comments from Lutnick or USTR Greer - when they made other extensive Canadian comments in December. The "clarification" is an ex post justification attempt - and not a very well-thought-out one at that. Canada's claim to fame was that it was a reliable trade partner - and that it valued the rule of law. So it is important that Canada walked the walk and talked the talk. Trade agreements are complicated contracts, and you need to consult your lawyers in advance before you engage in major changes. For Canada, we were so focused on showing how reliable we were to the rest of the world, we simply forgot to be reliable to our American and Mexican trade partners (yes, there are two who required advance notification under the Treaty, and we did not speak to the Mexicans at all - another treaty violation). I hope that this is helpful.

Luc Fournier's avatar

I’m curious to know if the US notified Canada when Trump said he signed a deal with China or any other “non-market” economy in the past 12mo?

Barry Appleton's avatar

The distinction is not definitional; it is structural.

The meaning of “free trade agreement” I am applying is the ordinary meaning of the term under established rules of treaty interpretation. It is not an inflated or opportunistic reading. It asks what an agreement does, not what governments choose to call it.

Where the analysis diverges is not law, but leverage. Canada has no practical interest in invoking Article 32.10 to terminate CUSMA in response to U.S.–China arrangements. The clause offers Canada no real protection. Its effect runs in one direction because power runs in one direction.

Canada, meanwhile, presents itself as the reliable, rules-based partner. That makes Canada uniquely exposed. Even arguable non-compliance allows the United States to name, shame, and escalate—up to and including CUSMA termination—without judicial review.

That is why we are operating in two different worlds. The issue is not whether Canada is “technically right.” It is that Article 32.10 allocates risk and narrative control asymmetrically, and Canada bears that risk when the clause is tested.

Jean Brunet's avatar

There was not a free trade deal with China. There was no retreat.

Barry Appleton's avatar

I disagree, and this goes to the core legal point of the piece.

My argument is that an agreement on tariffs is sufficient to constitute a free trade agreement under the ordinary meaning of the term, as required by established rules of treaty interpretation. A free trade agreement does not need to be comprehensive, labelled as such, or permanent. What matters is that it alters tariff treatment on a preferential basis by agreement between states.

In this case, the arrangement on EVs and canola was not merely diplomatic noise. It was a negotiated tariff outcome with China, reached in response to pressure and then walked back once U.S. leverage was applied. That sequence matters.

Whether one wishes to call that a “deal,” an “arrangement,” or something else is beside the point. Under CUSMA Article 32.10, substance matters more than branding. And once the tariff agreement was sufficient to raise the Article 32.10 risk, the reversal was predictable.

That is why I describe it as a capitulation—not because a grand FTA was signed, but because even a limited tariff agreement was enough to trigger the power imbalance embedded in CUSMA.

Tiger William's avatar

Same BS as the earlier article. There's been no walk back. There is no free trade deal with China. We negotiated tariffs. Free trade has no tariffs. This was written for MAGA. It's genuinely false and completely ridiculous.

Barry Appleton's avatar

I think this comment misunderstands both the argument and how trade agreements work in practice.

First, “free trade” does not mean the complete absence of tariffs. In the real world, all major trade agreements include tariffs, exceptions, quotas, and safeguards. That is true for U.S. agreements, Canadian agreements, and global trade deals. Zero tariffs everywhere is a textbook idea, not how governments actually operate.

Second, no one claimed there is a full free trade agreement between the U.S. and China. The point is that after years of aggressive rhetoric about confrontation and decoupling, the policy shifted toward negotiation, tariff adjustments, exemptions, and managed outcomes. That shift matters, regardless of what label one prefers to use.

Third, saying “we negotiated tariffs” does not contradict the argument—it supports it. Negotiation replaces escalation. When governments move from hardline positions to bargaining and compromise, that is a meaningful change in direction.

Finally, dismissing an argument by assigning it to a political audience does not address the facts. Trade outcomes are judged by what governments actually do: the tariffs they impose, the ones they suspend, and the deals they quietly make—not by slogans or intentions.

Disagreement is fair. But the basic facts here are well-established, and they deserve to be addressed on their merits.

Tiger William's avatar

You claim there was a walk back. There was none. Free trade agreements have zero tariffs for a range of products while other products are subject to quotas, reduced tariffs, etc. as in the current iteration of NAFTA. Canada did not negotiate a free trade agreement with China. Canada lowered tariffs on a very low quota of EV's in exchange for tariff relief on canola. The USA has a drastically large trade portfolio with China but forbids Canada to enjoy the same privilege. That doesn't work. Should Canada decide to trade an equal balance with China as the USA does Canada would of course come forward to discuss those terms as outlined in CUSMA. Did the USA consult with Canada when they sent chips to China?

Barry Appleton's avatar

Tiger, I do not think this exchange is moving in a productive direction, so this will be my last reply.

You are now restating points that either do not engage with what was written or rely on a shifting definition of “walk-back” that treats any change short of a formal free trade agreement as irrelevant. That is not how trade policy is analyzed in practice.

A policy walk-back does not require a comprehensive FTA. It is evidenced by a move from escalation to negotiation, from unilateral punishment to reciprocal adjustment, and from maximalist rhetoric to managed outcomes. Tariff exemptions, quota negotiations, sectoral relief, and issue-specific bargaining are all classic indicators of such a shift. That is precisely what occurred.

Your description of Canada’s China measures selectively narrows the facts and ignores the broader context in which they occurred. Likewise, the claim that “the U.S. forbids Canada” from trading with China conflates alliance politics, leverage, and consultation obligations with legal prohibition. Those are distinct concepts in international economic law.

Finally, questions like whether the U.S. “consulted Canada” on chips are interesting, but they are not responsive to the argument made in the piece, which concerns observable policy behaviour and outcomes—not whether all allies are treated identically in all circumstances.

Disagreement is fine. But at this point, the objections are rhetorical rather than analytical. Readers can assess the argument and the record for themselves.

I will leave it there.

Chris Beeson's avatar

CUSMA is not going to be renewed by the USA regardless of how far we bend our knee. We must be prepared to walk away. The Yanks will not negotiate in good faith. They are going to let the agreement expire and hit us with outrageous tariffs. It will be beneficial for us to have opened trade with other countries in advance. The Yanks want to destroy Canada and we must be prepared to endure any hardship to resist. The gangster fascists in the USA must be called out every day. If you are too afraid to speak for our great country step aside and let the rest of us do what needs to be done.

Barry Appleton's avatar

I understand the anger, but framing this as courage versus cowardice or resistance versus submission misses the problem Canada actually faces.

Preparing for the possibility that CUSMA may not survive is prudent. I agree Canada should diversify trade and reduce single-market dependence. Where I part company is with the idea that nothing we do matters, or that law, structure, and sequencing are irrelevant because bad faith is assumed in advance.

My argument is not “bend the knee and hope.” It is that choices made today shape the leverage we have tomorrow. Some actions strengthen Canada’s position if CUSMA fractures; others weaken it by handing the United States a ready-made narrative of blame and justification for tariffs. Those distinctions matter even when the counterparty is difficult, aggressive, or unfair.

Calling names may feel satisfying, but it does not improve Canada’s bargaining position, protect exporters, or shield workers from retaliation. Strategy is not appeasement. It is about minimizing damage while preserving options.

If CUSMA ends, Canada will endure hardship whether we like it or not. The question is whether we arrive there having managed risk intelligently—or having maximized it unnecessarily. That is what I am trying to analyse, not anyone’s courage or patriotism.

Edward Truant's avatar

Must read for Canadians

Gary Slatter's avatar

Stay tuned Barry

Gary Slatter's avatar

Impossible to trust the Trump regime (lutnick?)

Ian MacRae's avatar

We've heard often of TACO. Was Carney's clarification the first instance of CACO?