Morneau confident of ‘win-win’ trade solution with Trump team

Finance Minister Bill Morneau says Canada is ready to discuss difficult trade issues with the new U.S. administration, including softwood lumber and livestock, and he is confident of finding a “win-win” solution.

“We’ve been thinking about how we work with the next American administration for months, making sure that we’re prepared for those discussions. And we are,” Mr. Morneau said Wednesday after speaking at the UBS European Conference in London. “And we’re looking forward now to having the opportunity to engage.”

When asked specifically about softwood lumber and so called country-of-origin labelling, which involve U.S. rules that require foreign beef and pork to be sold with stickers detailing its origin, Mr. Morneau said Canada is confident deals will be struck.

“We will work together with the incoming United States administration to ensure that we create opportunities for Canadians. That we talk about what’s in our best interests. That we seek win-win with the United States. And you know, we’re confident that we’ll get to a place that’s better than we are now,” he said.

A document leaked to CNN said the incoming Trump administration plans to embark on an “aggressive, protectionist approach to trade both with Mexico and with Canada.”

Softwood lumber has been a difficult trade issue for decades and the current deal has expired, meaning the U.S. could start slapping duties on Canadian timber next year. Negotiators from both countries have been seeking a new deal but roadblocks remain. Canadian exports have also increased in recent months, putting more pressure on U.S. producers.

Canada had thought the country-of-origin issue had been settled after the World Trade Organization ruled that the U.S. regulations violated international trade and called for their removal. Nonetheless, Mr. Trump made trade a key issue in his campaign and the leaked document said the new administration wants amendments to Nafta that could include lumber and country-of-origin labelling.

On Wednesday Mr. Morneau said he also expects the Trump administration to discuss the Keystone XL pipeline project, which outgoing President Barack Obama cancelled last year. The 1,900 kilometer-long pipeline would bring oil from Alberta to refineries on the Texas Gulf Coast. Mr. Morneau told the conference that the Liberal government supports the Keystone project and other pipelines. “We’ve been clear. We think the building of pipelines is something we should be trying to achieve,” Mr. Morneau said adding that the government will involve Canadians in the construction approval process.

During the conference, Mr. Morneau was asked about foreign ownership of housing in Canada and whether recent restrictions have curtailed the market. He explained that the British Columbia government has put a 15 per cent tax on homes bought by foreigners in Vancouver and the federal government has moved to ensure foreigners are not abusing the capital gains tax exemptions on the sale of principle residents. “The measures are too soon for us to come to conclusions,” he said.

Mr. Morneau then made a pitch for foreigners to buy property in Canada. “We are absolutely open to foreigners investing in Canada in all areas and real estate is no different. We just want to make sure that the playing field is consistent,” he told the conference. “So as I said in a little round table I was at before this, if any of you are interested in buying second homes in Canada there’s lots of beautiful spaces to do that. We’d be happy to welcome you.”

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