Amid gloomy signs in Washington, Trudeau keeps up the charm offensive on trade

Chrystia Freeland's gloomy diagnosis of the state of the world Tuesday was perhaps a fitting curtain-raiser for Prime Minister Trudeau's visit to Washington today. 

Canada's foreign minister, speaking in the U.S. capital, said "this is probably the most uncertain moment in international relations since the end of the Second World War."

Heading the list of uncertainties, at least in terms of the Canadian government's priorities, is the continued survival of the North American Free Trade Agreement.

Again this week, U.S. President Donald Trump was ruminating on the imminent demise of the free-trade pact. "I happen to think NAFTA will have to be terminated," he told Forbes magazine, in an interview published Tuesday.

The sense of impending collapse was also felt by pro-NAFTA forces in the United States. Tom Donohue, who heads the U.S. Chamber of Commerce, warned that "we've reached a critical moment. And the chamber has had no choice but to ring the alarm bells."

Donohue left no doubt about who was to blame for the state of affairs, pointing to a number of "unnecessary and unacceptable …. poison-pill proposals" from the Trump administration.

A turn for the worse

If the first couple of rounds of NAFTA talks lulled the Canadian and Mexican delegations into believing they were engaged in a more or less conventional negotiation, round three in Ottawa seems to have reminded everyone they are dealing with a volatile and unconventional partner in the Trump administration.

The protectionist tendencies of the Trump White House have been on full display in a series of leaks and trial balloons about the next set of proposals to be presented by U.S. Trade Representative Robert Lighthizer.

Among the most alarming from Canada's point of view are demands to alter the NAFTA rules around North American content in vehicles, adding a new demand that half of every car manufactured in any of the three countries be built from U.S.-made components, as well as demands that the "trade remedy" chapter of NAFTA be scrapped and demands that Canada dismantle its supply management regime for dairy products.

Mexico also faces harsh demands, including that the country somehow eliminate its $60-billion trade surplus with the U.S.

Many of those demands have been amorphous threats until now, but will likely be presented in detail on paper in the round that begins today.

Charm offensive

Since the last time Trudeau met Trump, the United States has taken painful trade actions against Canadian industries, including most recently the 300 per cent tariffs against Canada's leading aerospace company.

Trudeau will undoubtedly seize the occasion to remind Trump of the Canadian Embassy's talking points about the benefits of NAFTA. But as the suspicion grows that Trump is not interested in a successful outcome to talks, the Trudeau government is assiduously pursuing its strategy of building bridges to those outside the administration.

Congress is another centre of power that could prove important if the Trump administration appears determined to rescind the free trade deal. The House ways and means committee holds responsibility for trade agreements and tariffs, and Trudeau will meet today with its chair, Rep. Kevin Brady, and its ranking Democrat, Rep. Richard Neal.

Should talks break down, any new legislation reconfiguring trade between the U.S. and Canada would likely originate in that committee.

But Trudeau's outreach extends beyond the White House and Capitol Hill.

Tuesday night, Trudeau and his wife, Sophie Grégoire Trudeau, sat with the president's daughter Ivanka Trump at the Fortune Most Powerful Women Gala held at the National Portrait Gallery.

Trump and Trudeau had agreed during Trudeau's first Washington visit to set up a binational group to promote the cause of women in business, and while Trump promptly lost interest, his daughter did not. Trudeau's continued engagement allows him to sweet-talk U.S. corporate leaders about the benefits of trade with Canada, as he did Tuesday night, but also helps to preserve a connection to a Trump family member the president listens to.

In an on-stage conversation with Fortune's Pattie Sellers, Trudeau spoke partly about female empowerment, but also used the event to push Canada's message of interdependence with the United States: "When one does well, the other does well."

Pressed by Sellers to reveal what he planned to tell Trump on the morrow, Trudeau stuck carefully to platitudes about "looking for common ground" and talking "about ways to better serve the people who elected us."

But he seemed to welcome the distraction when the host changed the topic to his colourful socks.

"I just used up five seconds of a conversation about Trump!" he quipped.