Security and defence is rising on U.S. radar as Carney meets Trump in D.C.

OTTAWA — As federal officials downplay the likelihood of Prime Minister Mark Carney reaching a trade deal Tuesday with U.S. President Donald Trump, government officials warn that the talks have broadened to increasingly emphasize security and defence issues.

Security and defence questions have been part of the Canada-U.S. trade stalemate since Trump began threatening Canada’s sovereignty and its access to the U.S. market shortly after he re-entered office in January. At that time, he cited illegal immigration and illegal drugs, particularly fentanyl, as key concerns and barriers to continuing with the free trade deal he signed — and widely lauded — less than seven years ago.

But Canadian government sources now say they believe that the U.S. administration has become increasingly focussed in recent months on foreign affairs, particularly China’s escalating global pull.

The Canadian agenda is largely in line with previous Canada-U.S. trade negotiations in that Ottawa is prioritizing unfettered access to the U.S. market and shielding protected industries such as airlines, broadcasting and supply-managed industries such as dairy, eggs and poultry.

But the U.S. is increasingly concerned with matters not directly centred on cross-border trade, namely security.

A press release late last week from the prime minister’s office described Tuesday’s talks in Washington as focusing on “shared priorities in a new economic and security relationship between Canada and the U.S.”

Dominic LeBlanc, the minister responsible for Canada-U.S. trade, told National Post last week that it’s too early to say if Canada is more likely to land a wide-ranging or sectoral trade deal with the U.S., but pointed to the broader issues – energy security, critical minerals, defence, and the security of sensitive of “confidential” information – that are part of the negotiations.

“There are so many lines of intersection,” LeBlanc told a Senate committee.

One of the issue areas where the two countries’ interests intersect is clearly Arctic defence.

In an interview earlier this week with The Economist magazine, Prime Minister Mark Carney cited Canada’s need for hypersonic missile defence (defending against agile missiles that travel at least five times the speed of sound) as an area where the two countries talk about cooperation. Canada and the U.S. have cooperated on air defence since the two countries founded the North American Aerospace Defence Command (NORAD) in 1958 during the height of the Cold War.

Analysts say the American wish list for talks on security and trade with Canada could also include Arctic governance, border security regarding drugs and people, improved access to Canada’s supply-managed dairy and poultry markets, the U.S. defence industry’s desire to win lucrative Canadian contracts (particularly new fighter jets) and Trump’s interest in developing a so-called Golden Dome defence shield.

Mark Manger, a professor of political economy at the University of Toronto’s Munk School of Foreign Affairs, said the U.S. focus on security is in line with Washington’s agenda and recent global events. “It makes a lot of sense.”

One government source said the U.S. is increasingly focused on gaining access to Canada’s critical minerals and rare earths, particularly those that may be able to help provide enough energy to fuel the next generation of artificial intelligence. Washington is particularly engrossed in recent months in obtaining this high-powered AI, the source said, before China does.

“The race is on.”

Fen Hampson, a professor of international affairs at Carleton University in Ottawa, said security has long been Washington’s priority in recent years, even before Trump was back in power.

But Canada has some leverage in its talks with the U.S. because its neighbour needs Canada’s capacity in strategic industries such as steel and aluminum, Hampson said, if the Americans are going to keep pace with their new rival.

“There’s no question that China is the threat,” said Hampson.

As Trump and other American officials try to remind Canada that it has few or no cards to play in this continental trade game, Carney’s government has been trying to show that the opposite is true. Carney and his cabinet ministers have been racking up frequent flyer points trying to improve non-American trade, even as trade experts warn that that’s extremely difficult to do.

Canada will spend more time on U.S. trade than with other countries, Carney told The Economist, but aims to do as much business as possible all over the world. “We’re going to play other games (of cards) with other players.”

While a broad trade deal may be an unlikely outcome from this week’s talks, it may still represent an important step forward. Although Carney has said that he’s in regular contact with Trump, National Post reported a senior Canadian government source last month as saying that there had been limited communication in recent weeks between the two countries.

Since being elected in late April, Carney has set multiple deadlines for a new economic and security deal with the United States, but has missed each of them.

That only adds to the political risk this week for Carney. The Liberal leader was elected at least in part because of his perceived ability to deal effectively with Trump and his tariffs and voters want some results. “Canadians want to see goods,” said Carney.

In a recent letter to Carney, Conservative Leader Pierre Poilievre criticized the prime minister’s lack of results on U.S. trade and said the prime minister needs to come back from Washington this week with victories for Canadians.

But Carney and other cabinet ministers have warned that Canadians shouldn’t expect Canada-U.S. trade to revert to the way it used to be. Trump has shown characteristic unpredictability in recent months by both reducing and hiking his tariffs on Canadian goods.

On Sept. 30, the president added a new 10 percent tariff on Canadian softwood lumber, making it a total levy of 45 per cent. On Monday, Trump said he’ll add a 25 per cent tariff beginning Nov. 1 on all medium and heavy-duty trucks entering the U.S. Canada is a leading exporter to the U.S. of trucks in those classes.

The government is trying to prepare the Canadian economy for a world with more U.S. protectionism and where trade patterns in alternative overseas markets such as Europe and Asia are already well-established and difficult to crack. Economists and trade analysts have warned in recent months that trade diversification, a Canadian challenge since before Confederation, is not easy.

Trump has imposed in recent months a wide range of trade tariffs on a wide range of countries, some of which have since reached negotiated tariffs arrangements for their exports entering the U.S. market. Canada has been sheltered to some degree by its pre-existing CUSMA deal, although some key sectors have been targeted by Washington and have since suffered.

But that shelter may not last long. Although the 2020 CUSMA trade deal between the three North American countries (or USMCA, as it’s called in the U.S.) isn’t set to expire for more than a decade, it is scheduled to be reviewed next year upon its sixth anniversary.

Ottawa’s preparatory measures for the new trade landscape have included early efforts to improve ports, rail lines and pipelines to make Canadian exports more competitive, break down inter-provincial trade protectionism, and re-skilling programs for workers affected by the tariffs.

National Post

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