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Trump's sudden attack on trade with Canada 'not a surprise' to Morneau

The finance minister says pleasantries are bound to give way to specifics as NAFTA renegotiation begins in earnest.

Things got off to a warm enough start between Prime Minister Justin Trudeau and President Donald Trump, but things are getting a little more tense as the two countries head toward NAFTA renegotiation.

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Things got off to a warm enough start between Prime Minister Justin Trudeau and President Donald Trump, but things are getting a little more tense as the two countries head toward NAFTA renegotiation.

WASHINGTON—Canada’s finance minister is downplaying U.S. President Donald Trump’s sudden attack on Canadian trade policies, saying it is unsurprising that pleasant generalities would give way to tougher policy talks as the countries head into a likely NAFTA renegotiation.

“No surprises, from my perspective,” Finance Minister Bill Morneau said in a Friday interview with a small group of reporters in Washington, where he is visiting for meetings of the World Bank, International Monetary Fund and G20.

“It’s really not a surprise that we’ve moved from a positive relationship, which it is, to thinking about specifics,” he said. His focus, he said, is the kind of “relationship development” that will allow Canada to make its case most effectively when negotiations begin.

Morneau offered only praise for Ontario Premier Kathleen Wynne’s newly announced policies to address challenges in the housing industry, saying the government was especially happy “there were no measures that increase potential demand for housing.”

The policy package includes a 15 per cent tax on foreign buyers in the Greater Golden Horseshoe area.

Morneau said the federal government would not consider imposing such a tax nationally, since conditions in individual cities are different, but applauded Wynne’s move to try to cool the market in the vicinity of Toronto.

“The measures around trying to reduce speculation in the market, we think are positive. We do believe that there’s an important issue around psychology in the market that needs to be addressed, and Ontario’s making progress on that issue,” Morneau said.

Trump hailed the Canada-U.S. trade relationship as “very outstanding” at a news conference with Prime Minister Justin Trudeau in February, saying he wanted only to be “tweaking it.” This week, though, he has denounced Canada over dairy, lumber and even energy, saying this is “another NAFTA disaster.”

There was no obvious explanation for the dramatic change in tone. Morneau attributed it in part to domestic U.S. politics.

Trump’s first broadside against Canadian policy was a vague but impassioned criticism of a reduction in the price of Canadian ultrafiltered milk, which U.S. farmers say has undercut them. It came during a Tuesday speech in Wisconsin, a dairy state.

“We will find ourselves in situations where we are talking to specific industries and recognize the challenge of those industries. That’s always going to be the case as a politician. So being in Wisconsin and talking about the dairy sector is not a surprise,” Morneau said.

On dairy and lumber, Trump was referring to well-known bilateral irritants. His vague invocation of “energy,” though, mystified observers. Morneau himself did not show any indication that he knew what the president was referring to.

“I don’t see any source of friction here,” he said.

In a telling sign of the times, Morneau would not answer directly when asked whether Canada can trust the president’s word.

“We haven’t entered into NAFTA discussions yet,” he responded.

He said the Trump administration officials he talks to remain “positively inclined to Canada.”

“From my experience in dealing with people in the administration thus far, they’ve been open to discussions, they’ve been listening to places where our relationship is working,” he said. “They’ve been clear that they want to make sure that all their relationships are fair to them. And until we actually get into a negotiation, we won’t get the actual issues on the table for concrete discussions.”

Morneau is attempting a bit of hockey diplomacy later on Friday: he is taking his Mexican counterpart to the Leafs’ playoff game against the Capitals.

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