Remarks

Can This Canadian Save Nafta?

Foreign Minister Chrystia Freeland is on the spot as President Trump threatens to shrink the trade pact to the U.S. and Mexico.

Chrystia Freeland, a longtime journalist who entered politics just five years ago, has suddenly become one of the most important people in Canada. She has the challenging job of trying to convince President Donald Trump that Canada still belongs in a three-way trade pact with the U.S. and Mexico.

On Aug. 27, Trump shocked Canada and the world by announcing from the Oval Office—with Mexican President Enrique Peña Nieto on the phone—that he was close to signing a new trade accord with Mexico, but not Canada. Trump called on Canada to join the deal soon or risk being left out. If a three-nation deal isn’t struck by the end of August, it can’t be signed by Dec. 1, when Peña Nieto will be replaced by President-elect Andrés Manuel López Obrador.

That puts Freeland, 50, on the spot. She is Canada’s foreign affairs minister and has the additional portfolio of managing trade relations with the U.S. Her spokesman immediately announced that she would cut short a trip in Europe to travel to Washington for trade talks on Tuesday aimed at keeping Canada in the free-trade pact.

The North American Free Trade Agreement is more popular in Canada than it is in either the U.S. or Mexico, so the pressure on Freeland to save it, or some facsimile of it, is strong.

Trump will be a tough sell, though. The 24-year-old Nafta deal, he said in the Oval Office, “has a bad connotation because the United States was hurt very badly by Nafta for many years.” He said, “We’re going to call it the United States-Mexico Trade Agreement,” a moniker that seems to freeze out Canada from the start.

The president wants Canada to lower tariffs on imports of American dairy products that exceed quotas. Canada wants to preserve a dispute-resolution mechanism that Trump dislikes. Canada also has opposed a U.S. proposal that would require the agreement to be renewed every five years. (The tentative U.S.-Mexico pact points toward a compromise on that sticking point, providing for a “review,” rather than a sunset, every six years.)

Freeland was born in Alberta, got a bachelor’s degree from Harvard in Russian history and literature, and studied at Oxford as a Rhodes Scholar. She worked as a journalist for the Financial Times, the Washington Post, the Economist, the Globe and Mail, and Thomson Reuters. She also wrote two books—Sale of the Century, about Russian privatization, and Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else.

In her efforts to save Nafta, Freeland will have to find a way to stand up for Canada’s interests without alienating Trump and his negotiating team. In the past she has said Canada wants a good deal on Nafta rather than any deal, suggesting the country could walk away before making concessions.

In 2013, Freeland entered politics at the urging of Justin Trudeau, then the leader of the Liberal Party. She won a seat in Parliament from Toronto. Two years later, Trudeau, by then prime minister, named her minister of international trade, and in 2017 he elevated her to foreign affairs minister.

Freeland has been outspoken in her defense of Ukrainians under attack by Russia; Rohingya Muslims in Myanmar; and human-rights activists in Saudi Arabia. After she advocated for the release of one Saudi activist, the Saudi government expelled Canada’s ambassador earlier this month. The kingdom’s foreign minister, Adel Al-Jubeir, said the next wave of retaliatory steps could affect investment flows between the countries, and Saudi Arabia’s central bank and pension funds have already begun selling Canadian assets, according to people familiar with the matter.

Freeland has also tangled with a nearer threat: Trump. In a June visit to Washington she defended Trudeau, whom Trump had called “very dishonest & weak” in a tweet. “The Government of Canada believes that ad hominem attacks are not the way to go about foreign policy,” she told reporters. She said subjecting Canada to tariffs on steel and aluminum for national security reasons was “frankly absurd.” And in another appearance she said, “Canada has no choice but to reciprocate dollar for dollar and we will do so.” 

In 2014, Freeland wrote an essay for Politico called “How I Gave Up on Snark to Become a Canadian Politician.” She wrote, “I’ve moved from the trade that invented snark, and the city, New York, that prides itself on its snarkiness, to the land of smarm and the ranks of professional smarmers as a member of the Canadian federal parliament.”

She, and Canada, will soon find out whether her smarm will be enough to strike a deal with the U.S. president.

    Peter Coy
    Bloomberg Businessweek Writer
    Peter Coy is the economics editor for Bloomberg Businessweek and covers a wide range of economic issues. He also holds the position of senior writer. Coy joined the magazine in December 1989 as telecommunications editor, then became technology editor in October 1992 and held that position until joining the economics staff. He came to BusinessWeek from the Associated Press in New York, where he had served as a business news writer since 1985.
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