International Trade committee  The fact is that the U.S. just announced that on their own, through their section 301 process, and I don't know for sure, but I don't expect that there were many consultations with Mexico or with Canada beforehand. It leaves Canada and Mexico in a difficult position. Do Canada and Mexico have to follow the U.S. approach and have the same kinds of tariffs in order to protect the North American market?

International Trade committee  It's a complicated question, so brevity is a challenge. I would just say that the way that the U.S. has proceeded with some of its policies, particularly the Inflation Reduction Act, means that it's very hard for Canada to get investment in critical minerals, for example, in Canada because the U.S. is attracting all of that.

International Trade committee  It's not that issue, but there are similar issues. On a number of occasions, the U.S. has put forward panellists who were clearly inappropriate and conflicted to be on that kind of panel. They just kept submitting conflicted panellists, and Canada had to reject those panellists.

International Trade committee  That does undermine the whole process entirely. As I said in my opening comments, it undermines confidence in the dispute settlement process overall and even in the agreement, I would argue. The difficulty is that if the U.S. isn't going to abide by dispute settlement decisions, there's not much incentive for Canada or Mexico to do that either, and then you start to move towards an environment where you no longer have trade rules in the agreement, and then you don't have much of an agreement.

International Trade committee  On the investor-state dispute settlement, we don't expect that the U.S. would have any interest in bringing that back, at least between Canada and the U.S. I think both administrations—the Trump administration prior and the current Biden administration—have no interest in going back down that track.

International Trade committee  I think the whole advocacy effort is really geared towards getting as many key players in the U.S. as possible to understand the importance of not causing disruption in the Canada-U.S. relationship when it comes to trade, talking about the benefits that exist and talking about what else we could do.

International Trade committee  Well, certainly with respect to Mexico I think we will see significant tensions that will still exist even under the new president. There are tensions over energy and the interventionist approach that Mexico has taken to energy. There are also concerns about China—both imports and investment from China—operating as a back door through Mexico into the U.S.

International Trade committee  When the U.S. took the action it took three weeks ago to impose significant new tariffs against imports from China in key areas like electric vehicles, batteries and critical minerals, that really made life difficult for Canada and Mexico. If the U.S. has those actions in place, neither Canada nor Mexico particularly wants to become a back door for China to get through, because the U.S. will then look at restrictions against Canada or against Mexico.

International Trade committee  With respect to the CBAM, there's been a challenge so far in that the U.S. has shown no interest in going down that track. As a result, we don't have too much potential to go down that track if the U.S. is not headed there. I think the biggest problem we have on the climate change side now is that countries are going off in different directions on their own.

International Trade committee  I would certainly hope so. The U.S. and the EU have been talking for years under the global arrangement on sustainable steel and aluminum, trying to come up with an approach that would allow them to follow the same path. The U.S. had a proposal, and the EU had its proposal for CBAM, primarily, but they have been unable to close the gap between them.

International Trade committee  I think it's a little bit early to say for sure, given that Claudia Sheinbaum has only been in place for a couple of days and doesn't come into power until October, but I think there are some helpful signs. Our fear was that she might follow the path of former president López Obrador, which created a fair amount of tension between the U.S. and Mexico particularly, but also with us to some extent.

International Trade committee  In my view, it's very unlikely, because it is worth a lot to the U.S. as well as to Mexico and to Canada. I think that would be enough of a big economic shock in the region that we would hope they wouldn't go that far. I would not be surprised if the U.S. tried to make the deal even better for them than it is now, but I think they will see the need for them to continue with the agreement as well.

International Trade committee  I have certainly been hearing already that the existence of the review clause does create the feeling that it's not as solid as it could be, because you could turn the direction and go towards an eventual termination of the agreement, so it's already having some impact. I think as we get closer, the rhetoric we're hearing, particularly out of the U.S. about their objectives in the review clause, could certainly start to undermine confidence very quickly.

International Trade committee  Oh, I'm sure we do. Lots of people have been involved in these issues for a long period of time, as I was. I'm sure they'll do well.

International Trade committee  I mentioned a little earlier that in the review of CUSMA, it won't really that much impact, in my view, because Bill C-282, as you mentioned, talks about opening access. Every indication I've heard from the U.S. is that they're content with the access that was negotiated in the CUSMA.