Canada's takeaway from Trump meeting: 'cautiously optimistic'

Canada's ambassador to Washington, who sat in on the Donald Trump-Justin Trudeau summit this week, says he's now cautiously optimistic about any forthcoming changes to the North American Free Trade Agreement.

Those conversations focused on changes that would be beneficialto both Canada and the United States, as they have done for monthsin talks with the White House and, before that, the Trump transitionteam, David MacNaughton said Wednesday.

If we're going to change it, we're going to do things that aregood for both Canada and the United States. That was the spirit ofthe meeting,"MacNaughtonsaid in Toronto.

"I'm cautiously optimistic. I mean, you never know in these things, but I'm quite optimistic that it's going to be good for
us."

The U.S. president concluded his meeting with Trudeau with apublic declaration that the trade relationship with Canada isoutstanding, suggesting he only wants a few tweaks in an upgradedNAFTA.

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Yet MacNaughton adds one word of caution: It's hard to knowexactly what the new administration will ask for, because the Trumpcabinet has yet to have its commerce and trade secretaries confirmedby Congress.

The confirmation process has been held up by the entrenchedpartisan warfare in Washington. The disarray mounted this week amidcalls for an investigation into connections between Russianintelligence and the Trump campaign.

The key players on the NAFTA file are also cooling their heels Commerce pick Wilbur Ross and United States Trade Representativenominee Robert Lighthizer are both awaiting news on theirconfirmation.

MacNaughton used a sports metaphor to describe the one-sidednature of the current trade conversation, between a full Canadiangovernment and a partly staffed administration: "It's a bit ofshadowboxing right now."

He expressed optimism in another area. He hopes there will be abeneficial resolution to differences over so-called "Buy American"restrictions on foreign companies competing for U.S. infrastructureprojects; the countries issued a statement after the Trudeau-Trumpmeeting that included a vague reference to working together onconstruction.

But some observers say it's way too early to celebrate.

"I think the initial Canadian reaction on Monday was a bit tooexuberant," said Toronto trade lawyer Mark Warner.
"The bottom line is that it all depends on what (Trump) means by'tweak'... I think it was just a placeholder. Canada wants answersfaster than he can give."

Opening Pandora's Box

If Trump wants significant changes to NAFTA, he needs to gothrough Congress. And that process includes a public consultationwhere the U.S. government receives input from American companies onideal negotiating positions.

A number of U.S. companies have already voiced gripes aboutCanadian trade practices. Annual U.S. government reports regularlylist grievances related to things like restrictions on milk, cheeseand poultry imports; controls of what liquor gets sold, and where;Canada's tighter duty-free rules; limits on foreign competition inthe telecommunications and broadcast sector.

It's hard for anyone including Trump to pre-emptively promisejust minor tweaks, Warner said.

If NAFTA gets reopened, he said: "I think that means openingPandora's Box."