Canada faces ‘stormy days’ with new U.S. trade representative, former diplomat says

MONTREAL—Canada faces “stormy days” ahead on softwood lumber and other issues with the U.S. after incoming president Donald Trump picked someone with a protectionist bent to be the next U.S. trade representative, says a former Canadian diplomat.

Trump plans to nominate Robert Lighthizer to fill the shoes of Michael Froman, who has served as the lead for the U.S. on the softwood lumber dispute.

Lighthizer, 69, was a deputy trade representative under the administration of former U.S. president Ronald Reagan and has been lead counsel in numerous anti-dumping and countervailing duty cases over three decades. He joins billionaire investor Wilbur Ross as commerce secretary and economist Peter Navarro at a new White House National Trade Council.

“Whether we’re sideswiped or intentionally targeted I think there’s going to be very tough days ahead on Canada-U.S. trade with Mr. Trump and his trade team,” said Lawrence Herman, an international trade lawyer who represented Canada abroad, including at the World Trade Organization.

He believes there is little desire by the new administration to reach any quick deal with Canada on softwood lumber, which has become an increasing source of tension between the two countries since October, when a one-year period to reach a new agreement on softwood lumber had expired.

“They’re not going to likely interfere with the trade dispute process so we’re in for a number of years of litigation,” Herman said.

He said Trump could also reactivate measures to protect beef farmers, challenge Canada’s supply management of dairy and object to provincial liquor and beer import monopolies.

Carlo Dade, director of the Canada West Foundation’s Centre for Trade & Investment Policy, said there is a risk that Trump will eventually go after Canada on a number of trade issues but the country should be pleased not to be on Lighthizer’s immediate radar.

“This is a guy you don’t want paying attention to you,” he said, noting that Lighthizer has successfully litigated for the U.S. steel industry.

Dade said experts have been so wrong about Trump that businesses and governments should wait until he comes out with his trade agenda and not make pre-emptive moves.

In announcing his selection for the trade post, Trump touted Lighthizer’s experience.

“He has extensive experience striking agreements that protect some of the most important sectors of our economy, and has repeatedly fought in the private sector to prevent bad deals from hurting Americans,” Trump said in a statement.

“He will do an amazing job helping turn around the failed trade policies which have robbed so many Americans of prosperity.”

BC Lumber Trade Council president Susan Yurkovich said she doesn’t know the new U.S. trade team but hopes they will be “pragmatic” about the importance of Canadian lumber to U.S. home construction.

“I expect they won’t want to do something that puts a punitive cost in place for U.S. consumers so I expect they will be practical about it,” she said.

Yurkovich anticipates that the U.S. International Trade Commission will determine by Monday that Canadian lumber harmed U.S. producers and proceed down the path to imposing duties.

Alex Lawrence, a spokesman for federal International Trade Minister Chrystia Freeland, said she looks forward to working closely with the new administration and Congress on issues including trade and investment.

One area where Canada could find a receptive ear is its proposal for a North American infrastructure bank that could help fund completion of large construction projects on both sides of the border, Dade said.