OTTAWA— The Canadian government is taking a wait-and-see approach to a report the Trump administration wants more power to tell automakers where to locate their production plants.
Bloomberg News reported Tuesday that the White House is pursuing its effort in exchange for allowing companies longer to adjust to tougher new rules on North American content for vehicles intended for duty-free sale within the NAFTA free-trade zone.
The negotiations are taking place in parallel to discussions U.S. Trade Representative Robert Lighthizer is having with Democrat lawmakers, who are seeking changes to the new NAFTA deal, according to Bloomberg.
The Democrats are pressing for more labour enforcement powers and shared environmental standards, along with changes to pharmaceutical industry protections.
Flavio Volpe, head of the Automotive Parts Manufacturers Association in Canada, called the idea that the White House would be able to force U.S. automakers to make “politically expedient” investment decisions “breathtakingly stupid.”
“It’s a recipe for inefficient business decisions that are laced with political interference,” he said in an interview.
Volpe said it’s ironic that the Trump administration would fight a trade war against China and oppose its central planning economy only to turn around and impose “central planning tactics on U.S. companies to meet political objectives.”
“We have this mind-crushing idea that a political appointee or a mid-level trade official is going to know better than a major automaker where to put a plant?” said Volpe. “Once you start … trying to influence those decisions politically, I mean, then we’re in Bolivia.”
Volpe says it’s up to U.S. automakers to push back, and suggested that with an impeachment inquiry underway in an election season, they have leverage against President Donald Trump that they didn’t three years ago.
The Canadian government has not been formally advised of the U.S. approach. Since the new NAFTA was signed last year, the Liberal government has urged against reopening it.
Implementation legislation that would see the deal ratified here must be reintroduced after the newly elected 43rd Parliament convenes. No date has been set for when MPs will get down to work in Ottawa after Trudeau names a new cabinet on Nov. 20.
Alex Lawrence, a spokesman for Foreign Affairs Minister Chrystia Freeland, declined to comment directly on the reported actions of the White House.
“As we’ve always said with respect to ratification, we will move in tandem with our partners to the extent possible.”
He said the new agreement “is excellent for Canadian jobs and for certainty in the Canadian economy.”
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Until yesterday, said Volpe, he was confident that the USMCA could be ratified by the New Year. Now he’s not sure.
“Unless the U.S. administration backs off stupid proposals like this one, it’s hard to see how the extra confusion leads to a clear vote on it,” he said.