Mexican Economy Minister Ildefonso Guajardo offered advice: Make a key concession to the U.S. to break the logjam. Mexico had bent to U.S. pressure on policies aimed at shifting auto production from Mexico back north, opening the way for Mexico and the U.S. to strike a broader deal a month earlier.
.. For Canada, the equivalent of Mexican cars was dairy. Canadian negotiators had already been thinking along the same lines, and the next day, Canada sent the U.S. a document that included detailed plans for easing curbs on American milk and cheese products, a Canadian official said.
.. Two sectors drew outsize attention in the talks—auto and dairy—that came to be dubbed by some the “cars and cows” negotiations. The path to the deal had plenty of twists and gambits that backfired over the 13 months of meetings, as Mexico and Canada at times accused each other of betraying their early oath to present a united front.
The tone for the Nafta talks was set in October 2017, when Mr. Lighthizer made a number of controversial demands that would recast the pact, such as injecting a “sunset clause” making it easier for a country to terminate the pact and weakening the mechanisms allowing challenges to American trade penalties... At the end of August, Messrs. Trump and Peña Nieto announced a deal that included the requirement that 40% to 45% of North American auto content be made by workers paid at least $16 an hour... Though the Nafta dairy market is worth a fraction of the auto industry—and the U.S. runs a dairy surplus with Canada—it became an important issue for Mr. Trump after he got an earful during an April 2017 visit to Wisconsin. The president made Canadian dairy a staple of stump speeches and tweets complaining about how Canada took advantage of the U.S... Mr. Kushner had come to play a behind-the-scenes role in the Nafta talks, and Canada’s negotiators wanted him to see right away a document that included Canada’s formal offer on dairy. The key concession had been made and the U.S. soon responded by giving in to some of Canada’s key demands.
“The most important gain from this agreement is retaining our access to the U.S. market and Canadians understand that,” Freeland said.
But there is a widely shared belief that Canada made concessions and the U.S. did not.
“The concessions were all from Canada and Mexico,” MacKay said. “All of them. The only thing that the United States gave up was more demands.”
.. Roland Paris, a former foreign policy adviser to Trudeau, expressed relief that the deal is done but worried about the long-term relationship between the two countries.
“Canadians won’t forget Trump’s disgraceful treatment of Canada. Our economic partnership has been reaffirmed, but trust can’t be rebuilt with the stroke of a pen,” Paris tweeted.
.. Canada could have lost 60,000 jobs in a trade war and taken a 1 percentage percent hit to its GDP — a significant drop because Canada’s economy is projected to grow just 2 percent next year
.. Ontario’s auto industry faced the biggest threat, but the sector welcomed the new agreement. The deal requires that 40 to 45 percent of a car’s content be built where workers earn $16 an hour. That is meant to bring production back to the United States or Canada and away from Mexico, where auto workers earn on average just $4 to $5 an hour.
.. The agreement also potentially restricts Canada and Mexico from reaching a free trade agreement with China and other “non-market” countries. If Canada or Mexico signed a deal with China, the U.S. could terminate its trade agreement with Canada or Mexico on a six-month notice. That may pose a problem for Canada which is eager to diversify its trade.
“It’s bizarre,” Charest, the former Quebec premier, said. “I have never seen anything like that in a trade agreement.”
Daniel Ujczo, a trade attorney with the Dickinson Wright law firm, said Canada and Mexico also must give the U.S. notice before starting those trade discussions and updates of all proposals made during the negotiations.
“The clause achieves a key policy imperative for the US; namely, shutting China’s backdoor to North America through Canada and Mexico,” Ujczo said. “Japan and Europe, as well as the rest of the world, should be on notice that this may be the price of admission to a trade deal with the U.S.”
.. “I am a Canadian. I am polite and respectful. Even when I’m dealing with a hard business issue I don’t belittle people, I don’t insult them,” Rosen said. “As a Canadian, the whole approach that has been taken (by the U.S.) has been offensive and I don’t think Canadians will forget it.”
.. Trump’s mistreatment reinforces a worry among Canadians that their much larger neighbor is taking advantage of Canada, Heyman added.
Bothwell, the University of Toronto professor, warned of lingering damage to relations.
“Trump treated it like a real estate deal when he was a shyster in Atlantic City,” Bothwell said.
“But this is nation to nation. And that’s different. And it’s connected to other things,” he added. “Trump really doesn’t grasp that and doesn’t care.”
Any Arab leader, particularly a young one who has recently assumed power in a traditional and mostly tribal society, has to carefully maintain his and his country’s stature and prestige, what classical Muslim scholars called hayba. This refers to the awe and respect that a ruler and his state must command in order to maintain order and stability without having to resort to excessive coercion, and without which there is no basis for legitimate rule.
This means that Prince Mohammed cannot allow himself or his country to be publicly lectured by Western leaders — especially in his own language. This was particularly the case since the Canadian embassy in Riyadh posted the tweet in Arabic, ensuring a wide circulation on local social media. Such perceived blatant interference in Saudi Arabia’s domestic affairs could not go unanswered without damaging the prestige of the state in the eyes of its people.
Let’s be clear: This has nothing to do with Prince Mohammed’s status as a reformer. The crown prince’s stated goal is social, economic, and cultural and religious transformation of his kingdom — not political reform. This is a point his Western critics often forget. In fact, to implement the enormous changes he wants, he has felt the need to further limit the margin of free speech in order to control public debate on these reforms and ensure that they do not escalate into civil unrest.
.. Religious conservatives are pushing back. One of the ways they try to undermine Prince Mohammed is by claiming that his reforms are the product of an “American agenda” that aims to Westernize Saudi society and distance it from its Islamic roots. Given the close ties that the kingdom maintains with the West, these false allegations resonate with the masses.
.. Saudi leaders have surely not forgotten what happened to the shah of Iran when he was accused of implementing an America agenda: Clerics used the charge to inflame the people against him and he was deposed in a revolution.
.. For Prince Mohammed, it is imperative that his reforms are not seen to be a result of Western political pressure, but rather in the interests of the country, the people, their faith and their culture. He cannot allow outsiders to try and dictate their views to the kingdom’s leadership or attempt to reach out directly to the Saudi people in such matters without impacting the hayba of the state.
.. Feel-good public posturing may play well with liberals in Canada, but quiet diplomacy is far more effective.
.. as with so many other policies he has supported, he appears to have little understanding of this one.
.. Many White House aides, including Mr. Trump’s chief economic adviser, Gary Cohn, appeared to be caught off guard by the decision; on Wednesday, Mr. Cohn had warned that he might resign if Mr. Trump went through with the tariff plan.
.. The stock market fell sharply after the announcement because investors feared that the move was the first of several that could result in escalating disputes
.. The steel and aluminum tariffs are ostensibly aimed at punishing China, which has been driving down prices for those commodities by producing far more metal than the world can use. But Mr. Trump’s move will have a limited effect on China because much of the steel and aluminum the United States imports actually comes from allies like Canada, Brazil, South Korea and Mexico.
.. the move could hurt American businesses that use these metals, including auto and construction companies
.. If Mr. Trump were truly interested in getting China to reduce its excess production, he would have worked with the European Union, Canada, Japan, South Korea and other countries to put pressure on Beijing. Those nations tend to be closely aligned with the United States and have also been hurt by China’s mercantilist economic policies.
.. threatening to retaliate forcefully against the new Trump tariffs. They could do so by bringing cases against the United States at the World Trade Organization, or by doing what Mr. Trump did and unilaterally imposing new tariffs on American exports like soybeans and Boeing planes.
.. Canada imports more American Steel than it exports to the United States, giving it the ability to hurt the very industry Mr. Trump claims to want to help.
.. Chrystia Freeland, says Canada buys about half of American steel exports.
.. for every new job at a steel mill or aluminum smelter that is created by this trade decision, the country could lose as many or more jobs at businesses that use those metals, which will now cost more. This is one of the reasons that trade wars are, in fact, not easy to win.
.. Mr. Trump clearly sees trade as a zero-sum game.
.. He and some of his most protectionist advisers, including Peter Navarro, think that if China and Mexico sell the United States more things than they import from America, they are winning.