International Trade committee  That was clearly a strong concern of ours, when the U.S. was pressing to have the agreement come into effect sooner rather than later. We know that companies across Canada are facing enough challenges dealing with COVID-19. We were, at least initially, reluctant to have them have to adapt to new rules under the new agreement, so we've been working closely with them to try to make sure this process is as smooth as possible.

International Trade committee  I think we are certainly doing a lot of work to determine how quickly we can move back to as close to normal as we can get in terms of the trading relationships. I think the impact that you cited with respect to the trade going back and forth.... Those numbers are higher than the ones I have seen.

International Trade committee  With respect to implementation, I think we have been doing a lot of work, a lot of consultation, with industry moving forward to ensure that the change from the existing NAFTA to the new NAFTA, or CUSMA, can happen as smoothly as possible. However, I think probably even more importantly, we have been looking at a number of steps to take to ensure that companies in Canada understand how they can take advantage of the changes under the new agreement, and how we can ensure that we can strengthen our position with respect to the economic relationship between Canada and the U.S., and Mexico as well.

International Trade committee  We do have the benefit of the experience we had the last we confronted this, but I think there are some differences with respect to what we're facing now. The bottom line in all of this is that the U.S. cannot meet its domestic demand with its own domestic production. The U.S. produces less than two million tonnes on an annual basis but consumes more than five million tonnes, so it simply does not produce enough domestically to satisfy its domestic market.

International Trade committee  With respect to the side letters we agreed to with the U.S. on the removal of the aluminum and steel tariffs, they were actually statements; they weren't even side letters, so they are not part of the formal legal agreement we have reached with the U.S. on the new NAFTA. That means they do not have the same kind of legal standing that any measures that are inside the agreement will have.

International Trade committee  I'm here. Sorry, I missed part of the last portion of the question.

International Trade committee  Well, yes. Over the past number of months, in particular since all of us have been dealing with the COVID-19 crisis, we have seen some developments in our trade in aluminum with the U.S. We've seen patterns that we expected to see and that we have seen during previous economic pressures, particularly the 2008-09 financial crisis.

International Trade committee  Certainly, we are working closely now with U.K. officials to start to talk about how we can come up with a trading relationship that would govern our bilateral trade going forward. We already have the CETA in place, and it will remain in place until such time as the U.K. leaves the European Union.

International Trade committee  I think that would remain an option for us. We have consistently objected to the notion that the U.S. was taking these kinds of actions for national security reasons, which we have very significant concerns about given that we don't consider ourselves as posing a national security threat to the U.S.

International Trade committee  No. I think we have options on both paths. We have options in terms of how we might respond on a bilateral basis, because, as I mentioned, the statement itself says “aluminum-containing products”. That's a very broad category. Many products are packaged in aluminum-containing packaging material, for example.

International Trade committee  Well, on what we're seeing in the U.S., I think, our focus at the moment is really on advocacy in the U.S. at this point in time; in other words, to try to prevent the U.S. reimposing tariffs on aluminum. We have some fairly strong allies in the U.S. who oppose the imposition of these tariffs, so we have been working with those interests.

International Trade committee  Just to be clear, this is not a part of the CUSMA agreement. It's not part of the obligations contained in the formal international treaty that we've agreed to with the U.S. and Mexico. This does mean there is a certain amount of flexibility with respect to the particular statement that was issued back in May of 2019.

International Trade committee  First of all, the understanding or statement that was issued back in May 2019 clearly indicated that the tariffs the U.S. was imposing would be removed. Also, as you mentioned, it talked about the kinds of options we would have in terms of a response. The response clearly says that we would be able to retaliate in the case of aluminum and aluminum-containing products.

International Trade committee  Thank you very much, Madam Chair and members of the committee. We are certainly pleased to be here today to discuss the impact of COVID-19 on Canada’s trade relationships, particularly with regard to the United States and United Kingdom. I will open with some brief remarks. Then we will look forward to taking your questions.

International Trade committee  Despite some challenges we have with the U.S. from time to time, we have been maintaining close linkages with our counterparts in the U.S., and we have talked to them about their discussions with China as well. Clearly, the U.S. is seeking to reach an agreement with China that covers a broad range of areas, and they are trying to do that on a bilateral basis.